Appetite remains for M&A investments in Vietnam

Simon Vandekerckove at M&A Vietnam Forum 2022. Photo: Hong Nhung

Simon Vandekerckove

I'm in logistics which you could say is a sector of interest in Vietnam, especially when these activities are connected to e-commerce. So it's interesting for me to attend the M&A Forum 2022. I want to know where is the need and interest. I know from our clients, but from the industry players, I think it's nice to hear.

Generally speaking, I want to understand the condition for next year in terms of investments because it's a good indication of how the economy will go. Especially what kind of sector will be of interest and what will be the focus of investors. It also helps me decide where I can focus my own activity.

In my position, I experience merger and acquisitions at the senior management level, so usually, I don't decide on the acquisition, but after that, I take part in implementing the merger on the global level.

So usually, we take over a local company, and we have to put this local company under the standard and norms of our company. It is important that we secure the value added out of it.

Dato' Sri Larry Liew, president of Ageson Berhad (Malaysia). Photo: Hong Nhung

Dato' Sri Larry Liew, president of Ageson Berhad (Malaysia)

We are looking for connections to get us a joint-venture company and acquisitions opportunities in manufacturing services. We can see that Vietnam is up-and-coming, we can see that Gamuda is here. Vietnam is very near for us. We have not yet been able to find what we are looking for, but we are searching and hope to enter the Vietnam market soon. We would like to acquire at least 45 per cent.

Peter Chi Lok Woo, chairman of BOD, MAA Capital. Photo: Hong Nhung

Peter Chi Lok Woo, chairman of BOD, MAA Capital

I find M&A Vietnam Forum 2022 very exciting. I didn't expect so many people to turn up, and it has a very international feel.

Of course, we like to have updated information about M&A in Vietnam. And, there are so many different kinds of professionals here. We have lawyers, and capital funding people, financial accounting, so they give different opinions so that it represents the whole market. So it's a one-stop place to get all the information about the market.

The forecast for the market next year is not as good as we wish it could be, but I think it is still a very interesting place where M&A deals can happen, and I believe it is still a very positive market.

I'm interested in the real estate market, or residential properties to be more specific. We have investors coming in from Hongkong, China, and Singapore.

If you look at the GDP figures, it's very promising, but of course we have to consider the market size compared to other markets. But I think it is still very good in terms of quality and room to grow.

In terms of business challenges, when we enter the Vietnamese market, the first issue is language because we are a foreign company. Then it's the different working culture, working time, and pace.

I used to work in Hong Kong, so the pace of work is really fast compared to Vietnam.

And Vietnam is a very young market, so we have a lot of young people on our team. With younger people, the thinking is slightly different to a more mature group. So it takes a little bit more training and patience.

Actually, I'm here to listen to the professionals who talk about the forecast, but it will not be as good as the previous year, and we know that. So we will try to consolidate our resources in the tougher market. You have to get your best performance to get the deal.

Tran Minh Tri, senior investment analyst, Asia Strategic Holdings. Photo: Hong Nhung

Tran Minh Tri, senior investment analyst, Asia Strategic Holdings

I'm interested in the education sector, but as the forum's speakers said, because the M&A activities have been down, among the big deals in today's conference, there is not one from the education sector. However, recently there was a big M&A transaction for a K-12 educational group that was valued at around $1 billion.

Mainly, I want to see how the M&A market has progressed in the past year and build my network with key players in this industry in Vietnam.

With foundations in Myanmar and listed on the London Stock Exchange, our company is looking for targets in Vietnam to invest in and wants to enter the market in full ownership or a controlling part of the company.

The main criteria for selection is that the company has good governance, especially financial management, abundant cash flow, and is among the growing trending industries in Vietnam.

Usually, for most Vietnamese companies, in the initial appraisal stage, before entering the in-depth appraisal, the information is not very accurate.

The type of report based on two or three books makes it very difficult for investors to do their due diligence. In addition, many founders do not know the company's financials thoroughly, leading to many conversations that deviate from each other's expectations, which our job quite a difficult search because makes of unclear information and a lack of professionalism.

Previously, I participated in deals worth about $10 to 20 million in the previous period. For individual companies, there can also be a smaller size of about $1 to 5 million , depending on the case.

Matthew Lourey, managing partner, Acclime Vietnam

Matthew Lourey, managing partner, Acclime Vietnam

Foreign investors/funds have the capital they need to deploy for returns, and Vietnam provides a significant opportunity versus many other markets. Some sectors are globally depressed, so they remain unattractive regardless of where they are.

However, there is still an appetite for firms that can show solid growth and for innovative businesses, on top of the regional consolidation opportunities that we are seeing across Asia (which Vietnam is benefiting from). We have seen quite a few smaller deals, such as those that bolt on to existing regional operations, small funds looking for tech or early stage opportunities, and service sector consolidation. We haven't seen many big deals, though. Change in the market is likely this year and going into 2023.

M&A Vietnam Forum 2022: 'Igniting new opportunities' The 14th Vietnam M&A Forum 2022 organized by Vietnam Investment Review under the auspices of the Ministry of Planning and Investment took place in Ho Chi Minh City on November 23.

M&A opportunities in a volatile market The consumer, industrial, real estate, energy, and utilities sectors were the most sought-after targets in 2022-2023 when split by industry.

Honoring M&A deals and consulting firms in 2021-2022 With the theme "Igniting new opportunities," the M&A Forum 2022 honored 10 outstanding M&A deals in 2021-2022 and 12 outsanding M&A consulting firms. The winning deals were in a range of business fields, including banking and finance, F&B, retail, manufacturing, heathcare, e-commerce, and real estate.