[Book Review] The GPS Paradigm: For Successful Mergers, Acquisitions & Joint Ventures by Nitin Potdar

India continues to be an M&A hotspot even during these tough times. Businesses have projected the ability to remain viable and industries have shown potential to adopt modern day technology to function and provide services remotely.

The book The GPS Paradigm: For Successful Mergers, Acquisitions & Joint Ventures by M&A Partner at J Sagar Associates Nitin Potdar is an enlightening read for those interested in understanding the know-how of mergers, acquisitions and joint ventures. It tries to convey essential information pertinent to the current phase of M&A and prescribes what possibly is the way ahead. Every chapter of the book offers an interesting view into corporate restructuring and provides a detailed understanding of the purposes and mindset of companies while indulging in such transactions.

The term 'GPS paradigm' is a combination of three different crucial stages involved in any M&A transaction. G stands for ground intelligence, P stands for partnerships rooted in unconventionality and S stands for strategic solutions. Combined, it is a Global Positioning System with an objective of assisting companies with landscape navigation, astute collaboration and sustainable progression.

Owing its origins to military parlance, ground intelligence refers to the ground level research a company needs to delve into to develop a holistic understanding and analysis of the ground realities involving social, political, legal and environmental aspects pertaining to a transaction. Needless to say, the study and research must be pertinent to contemporary research across the globe with zero limitation to local geographies. Unconventional partnerships refers to the need for companies to face unconventionality in partnerships in order to reach their desired destination. It may involve a boutique law firm looking to expand partnering with an IT start-up to deliver 24x7 customer connectivity. Strategic solutions imply the plan of action devised to reach a particular goal in the most efficient manner. It is essential as projected in the book for these components to work in unison and not in isolation.

The book goes back to the evolution of revolutions, and seeks to provide a comparison between the industrial revolution and the digital revolution. It substantiates the point that both revolutions heavily experienced unprecedented change in both technological or organisational structures. The effect of modern-day technology is heavily accounted for in the book, and it answers the question of how exactly technology has impacted the outlook of companies when it comes to corporate restructuring. It also provides a fool-proof strategy to help companies counter the threat and address the challenges of disruptive technology. It explains the fundamental differences in various structures of M&A and points out that choosing a particular model for collaborative growth is not a black and white decision and warrants an incredibly careful study of the similarities and differences between the variants, depending on the needs of the business and the contemporary business market.

It details different types of structures and the legal systems surrounding them. It also enlists the various purposes behind any acquisition which may or may not involve the need to improve performance, weed out duplication and redundancy, acquire know-how, achieve economies of scale, scout for seed stage prospects, create value, consolidate operation, achieve business acceleration or profit from speculation. While explaining the purposes behind such transactions, the author gives a practical example by detailing a real-life transaction that he undertook and oversaw. This gives a behind the scenes understanding of what goes into a merger/acquisition transaction.

In addition to legal processes, due diligence is described as an extremely important step for any M&A and merits serious consideration for all stakeholders. According to the author, whilst any transaction requires detailed due diligence, he believes that even vendors should engage consultants (legal and tax) to conduct at least a limited variant of due diligence.

As a book by a lawyer on corporate restructuring and M&A transactions, it does not fail to meet the expectations of its readers. It provides not only theoretical aspects of any transaction covered by other texts available on the subject, but also enlists a handful of practical things that need to be borne in mind while conducting due diligence. It deals with essential Indian legal jurisprudence on key and critical components of M&A and studies the judicial stance and approach/treatment under broad heads like single window clearance, consent of members/creditors, scrutiny of schemes, mathematical precision of valuations, employee protection and potential flaws.

The author advocates for institutionalising M&A capabilities and provides a conclusive approach as to why in his experience as an M&A lawyer, multi-national companies (MNCs) and large family-owned companies engaged M&A focused teams. The author unequivocally expresses the importance of professionalisation of the M&A process and why a dedicated team is absolutely necessary to ensure adequate planning to provide an integration plan, as also to identify and eliminate redundancies in a company’s workforce. It not only reveals the aspects that a company needs to focus on, but in the most lucid way details the pointers and characteristics to be adopted for any M&A team working on a transaction. He brings our notice to the most important aspect, which is leadership at the helm managed by competent accountants, investment bankers, tax attorneys and HR experts. A trusted advisor at the top is really pivotal for a company and the team to smoothly effect a transaction, the book states.

It further goes on to deal with successful M&As and major examples in the history of exemplary business strategies - how companies like Disney, Google, IBM and Cintas have become history’s greatest proponents of M&A by believing in correct business strategy and strong M&A teams. Further, the book analyses the completion law aspect and how the purview of consumer welfare is yet to convincingly accommodate the tech issues of consumer data preferences. Citing an interesting case of M&A between two public companies, the author gives a peculiar insight into his experience on valuation. According to him, valuation is not merely a mathematical or scientific calculation, but an analysis, a market assessment.

In its later part, the book deals with insights into Joint Ventures and how for the survival of any business with the advent of future technologies and breakthrough innovation, the essentials of the GPS paradigm become veritable. The fundamental differences between M&A and JV are explained in a crystal clear format. A study on the different forms of JV is provided. The thing that makes it absorbing is the real world examples associated with every form. Since this book has come out in the period of the COVID-19 crisis, it covers the pertinent example of Pfizer-BioNTech joint venture. According to the author, it was one of the best models of a complementary and timely Joint Venture that saved millions of lives. One impressive thing to see was the timeline of all the case studies, which depicts not only the latest, but also the most relevant ones to explain any kind of JV or M&A exercise.

The last segment of the book contains engrossing stories from the personal and professional life of the author. The author gives a detailed background of his working in the area of M&A, JV, foreign investment and business restructuring. He gives an intriguing tryst of how he started working at th erstwhile Amarchand Mangaldas & Suresh A. Shroff & Co. after having received a call from Cyril Shroff. The author, while referring to the times when Shroff was criticised for his autocratic functioning, quoted his reply,

“I am a benevolent dictator, and I do not want my firm to become a debating society.”

Subsequently, the author talks about his journey of how he joined J Sagar Associates and how much he loves the truly-merit based and democratic nature of the firm. This, he says, has helped him in pursuing his interests and areas of practice in a more liberal sense. He goes on to describe how the firm is based on the models of the West by having an elected managing committee, the unique approach of not taking any of the family members on board, and enforcing a compulsory retirement age of 65.

Being a law student, this book has given me invaluable insights into the M&A world, and as pointed out by Chartered Accountant Shailesh Haribhakti in the foreword, the author has given the global M&A community an invaluable gift in book-form, a must-have for every library!

The author is a fourth year law student.