Research On The Impact Of Industrial M&a Funds On Enterprise Value Creation

With China’s economic transformation and upgrading,the M&A market is gradually becoming active and more and more companies are developing their business through industrial M&A.The government also actively encourages enterprises to promote the optimization and upgrading of industrial structure through M&A.This provides a great opportunity for the development of industrial M&A funds.Industrial M&A funds are funds focusing on industry or industry chain M&A integration,which are established by listed companies and PEs.Its operation mode is that the M&A fund acquires the target around the development strategy of the listed company.Then the M&A fund cultivates it with the listed company.When the target is cultivated to maturity,the listed company makes secondary acquisition of it.Since2011,industrial M&A funds have flourished,with the annual number of funds established increasing from 4 to 482 in 2022.Industrial M&A funds have gradually developed into the mainstream mode of M&A funds with the advantages of being able to reduce M&A risks and having clear exit channels.However,there is still controversy about whether industrial M&A funds can have a positive impact on corporate value due to the late start and the lack of abundant related research.This paper takes Aier Eye Hospital as the research object to analyze the relationship between industrial M&A funds and enterprise value creation deeply with relevant theories.Firstly,the value creation path of industrial M&A funds is analyzed in detail from five stages that is based on the fund operation process,from establishment,fund raising,investment,management and exit.Then,using the event study method,non-financial indicators,financial indicators and EVA indicator method,this paper analyzes the value creation effect of Aier Eye’s industrial M&A funds in short-term and long-term in order to determine whether industrial M&A funds have a positive impact on corporate value.The results of this paper show that: Firstly,industrial M&A funds can create value for enterprises.The establishment of industrial M&A funds can bring short-term market effects to enterprises.The overall market reaction to the establishment of an industrial M&A fund by Aier Eye is positive.In the long term,after establishing industrial M&A funds,the non-financial indicators,financial indicators and EVA of Aier Eye have improved significantly,which is reflected in the soaring number of hospitals,growing talent team,increasing business scale,and market share,enhancing profitability,operation capacity and growth capacity.Secondly,the value creation of industrial M&A funds is carried out throughout the operation process.At the stage of establishment,fund raising,investment,management and exit,industrial M&A funds reduce agency costs and enhance synergistic effects;bring leverage advantages and reduce financing pressure;have information advantages and enhance M&A efficiency;integrate targets in advance and reduce M&A risks;and merge into targets in time and reduce M&A costs.Finally,suggestions are made for companies that desire to set up industrial M&A funds in view of the success of this case.Companies are supposed to choose high-quality PE in the industry,pay attention to post-investment management,merge in the target when it is at the break-even point,and choose a reasonable payment method.