Aier Ophthalmology Research On M&A Risk Based On “PE+ Listed Company” Fund Model

From 2009 to 2018,the total transaction volume of China's M&A market reached 85,511.34 billion yuan.More and more enterprises choose to use M&A funds to conduct investment mergers and acquisitions.The “PE+ listed company” M&A fund gradually enters the capital market.This innovative M&A fund model enables listed companies to gain an advantage in fierce market competition,accelerate the industrial transformation of enterprises,and enrich the exit channels of private equity investment funds.However,this model is still in the early stage of development and can be successfully applied.The number is still very small,and relevant companies in the market should rationally view the drivers and operational mechanisms generated by the model.It is important to analyze the risks that may exist in the specific operational process in combination with specific cases.This article selects Aier Ophthalmology as the case study object.As the first IPO listed medical institution,its investment M&A behavior has certain reference value.Firstly,the specific process of Aer Eye Department's joint establishment of M&A funds with PE institutions was introduced.Since 2014,the M&A Fund was first established for industrial integration.By 2018,Aier Ophthalmology has been involved in the establishment of six M&A funds for strategic investment.Secondly,it analyzes the motivation of Aier Ophthalmology to participate in the establishment of M&A funds.In the context of the rapid development of the medical and health industry,the establishment of the “PE+ listed company” M&A fund of Aier Ophthalmology can alleviate the financial pressure of direct mergers and acquisitions,and the M&A fund,as an industrial investment platform of Aier Ophthalmology,can lock in the quality of the M&A target in advance.Speed up the pace of hospital expansion.Finally,the risks in the specific business process of the M&A fund are analyzed.Listed companies face the risk of improper selection of PE institutions.The qualifications and capabilities of PE institutions seriously affect the investment progress of M&A funds.Under the asymmetry of information agency,the investment objectives of listed companies and PE institutions are different.The purpose of Aier Ophthalmology is to achieve rapid expansion of enterprise scale with less M&A costs,and the main focus of PE institutions is to realize investment projects.The value-added income of the PE institution,as a general partner of the M&A fund,is responsible for the day-to-day operation and management of the partnership,and there is a certain risk of conflict of interest with other investors.There is a risk of wrong project selection during the operation stage of the M&A fund.Due to the complexity of the market,there may be insufficient investigation or misjudgment of information,resulting in improper decision-making,or the growth ability of some investment projects may not meet expectations.The listed company has the preferential acquisition right under the same conditions for the investment projects of the M&A fund.In the process of incorporating the investment target into the listed company,there may be exit risk of the M&A fund,which mainly includes the valuation risk and exit of the target company involved in the equity transfer.The risk of improper timing.In addition,there may be risks in the integration process between the investment project and the listed company.On the basis of studying the domestic and foreign literatures related to the “PE+ listed company” M&A funds,combining the specific case analysis of its operation mode and risk,it can take the risk of the enterprise to adopt the model,aiming at the existence of the case.Risks propose risk prevention measures for “PE+ listed companies” M&A funds,mainly including careful selection of PE institutions,improve cooperation standards;strengthen institutional constraints,improve reward and punishment mechanisms;clarify strategic objectives,and strictly select projects;rational acquisitions,lower estimates Value risk;integrate targets in advance to enhance synergies.Relevant enterprises must rationally consider the risks arising in the operation of the M&A fund and take timely and effective control measures.The research in this paper can provide reference for the same type of enterprises using this model.