Case Study On Aier Ophthalmology’s Expansion With The Help Of Industrial M&A Funds

As enterprise develops to a certain stage,it tends to choose an expansion strategy for reasons such as enhancing its core competitiveness and exerting its advantages of scale.Under normal circumstances,there are three ways that companies can choose to achieve their own expansion,including their own funds,equity financing and debt financing.In 2014,the model of industrial M&A funds was used by more and more listed companies as a means of financing to support their own development.This paper selects Aier Ophthalmology as the research object,and uses the method of case analysis to analyze the motivation,benefits and problems of Aier Ophthalmology’s expansion with the help of industrial M&A funds,for the purpose of offering experience for other listed companies to refer to.This paper begins by introducing the related concepts and theoretical basis.Secondly,it introduces the general situation of AIER Ophthalmology,Industry M&A Fund,and the expansion of Aier Eye with the help of the industry buyout fund.Thirdly,in the case analysis part,the motivation of Aier Ophthalmology’s expansion is firstly analyzed,including including improving market share,core competitiveness and optimizing the company’s internal management.Then it analyzes the benefits of Aier Ophthalmology’s expansion.The benefits of the expansion showed that the profitability and internal value of Aier Ophthalmology were also improved during the expansion process,which was ultimately reflected in the stock price to a certain extent,boosting the company’s stock price.Finally,it analyzes the problems brought about by the expansion: the rapid expansion brings the risk of excessive goodwill to the company,and also increases the overall management difficulty of the company.Finally,there is a issue of brand risk.Through analysis,this paper draws the relevant enlightenment for enterprises to expand with the help of industrial M&A funds: 1.Capital leverage is temporary,and companies still need to plan ahead of time for the funds to be incorporated into the project in the later stage.2.The investment direction of the industrial M&A fund needs to satisfy the company’s business and exert synergistic benefits.3.Prior choice is professional expansion,relate to the company’s core competitiveness,and reduce project risks.Finally,this paper draws the following conclusions: Compared with the traditional financing mode,the financing of the industrial M&A fund model has the advantages of capital efficiency,risk control and cultivation period guarantee.It is reflected in the improvement of internal value,revenue capability and stock price.At the same time,Aier Ophthalmology is also facing the pressure of excessive goodwill and management ability,as well as brand risk.