CoAggregation® is a unique, eclectic and innovative business process evolved by 2iB Partners that aggregates companies offering all related services in a particular sector under the “super firm’ which is the holding company. 2iB Partners recommends, executes and implements CoAggregation® for companies that want explosive and exponential growth along with internationalization or increase in shareholder value.
Through the CoAggregation®, some obvious outcomes are traditional business transformation, innovation, market access, digitization, cost efficiencies re-investment (CER), vertical and lateral expansion.
For SMEs, CoAggregation® enables companies in a given sector / industry to scale up and internationalize as well as innovate and future-proof against disruption. Through the CoAggregation®, many services are provided with its team of experts. Some obvious outcomes through CoAggregation® are traditional business transformation, innovation, market access, digitization, cost efficiencies re-investment (CER), vertical and lateral expansion.
If you are an SME that would like to learn more about CoAggregation® and what this entails, talk to us now.
Reverse CoAggregation® for MNCs envisages the restructuring of an organization into highly efficient, functional and decentralized business units that are highly focused on their core competencies This will create a semi-decentralized system that is not laden with bureaucratic inefficiencies but combines the best of scale and nimbleness.
By introducing right technology into the entity and seamlessly fusing this with existing practices we are creating an entity of the future. From a shareholder perspective, this aims to enhance and maximize shareholder value.
If you are an MNC that would like to learn more about CoAggregation® and what this entails, talk to us now.
CoAggregation® is a sector-agnostic business process evolved by 2iB Partners that aggregates companies offering complementary services in a particular sector through a holding company. The holding company is owned by the individual specialist firms in different combinations of full ownership, joint venture or stake holding. It combines collaborative mergers & acquisitions (M&As) with organic growth. In a vertical, the holdco will offer to the client / customer a complete set of services by complementary companies (in the same industry) along with boutique services offered by the individual companies. This ensures future-proofing. The CoAggregatees continue to service their individual clients and gets new ones as a result of cross-referrals, customer journey extension and international market access.
The CoAggregation® takes place intranationally within a jurisdiction and collaborates with other countries where the international CoAggregations exist. Such collaboration within the sector fosters creativity and thus innovation.
CoAggregation® is based on 4 co-pillars
- Collaboration + Innovation
- Cost Savings Re-investment (CER)
- Cooperative functions
CoAggregation® future-proofs companies by making them the disruptors through innovation as well as ensuring survivability and sustainability.
Utilizing our research and collective years of experience, we innovate, customize and make proposals that take your business to the next level.
CoAggregation® is not a quick draw to success, it is a stringent fitness regime.
Utilizing our research and collective years of experience, we customize and make proposals that help you take your business to the next level.
CoAggregation® is not a quick draw to success, it is a stringent fitness regime.
How does CoAggregation® benefit companies?
From a company perspective, it provides several advantages, a few of which are:
- Scaling up and internationalization
- Innovation and disruption
- Risk mitigation, including ring-fencing, sharing responsibilities and profits
- Cost-efficiencies and reinvestments to grow the SME
- Being part of a global ecosystem of best in class SMEs in a true global shared economy
- Favourable financing options due to merits of scale
- Industry experts to propose synergies, bring in more networks and insights to build the business to the next level
- Effective succession plans
- Cooperative functions ensures seamless functioning of the companies and protects share value when listed
How does CoAggregation® benefit investors?
From an investor perspective, it provides several advantages, some are:
- Returns via publicly tradable shares or benefits of profits through Private CoAggregation
- Risk mitigation through revenue-generating, diversified, multi-jurisdictional and controlled portfolio
- Conglomerate discount v/s CoAggregate premium – Instead of an overly-diversified portfolio of companies which brings in the conglomerate discount, the CoAggregation vehicle provides a suite of pre-selected companies that function autonomously and remain focused on its core competencies
- Serial Investment and trade-sales rather than single company investments. Hedging and ring-fencing automatically provided. Investment in an index form via the holdco without the diversity and non-control of portfolio of securities
- Continued progression of CoAggregations multiplies the EBITDA of the holdco and therefore driving shareholder value exponentially
CoAggregation® is similar to infrastructure projects in that we are building industry and business infrastructures. Returns will be on a 5-10 year horizon, with most value being accrued towards the 10th year of the project.
WHAT IT IS NOT
A roll up: Traditional roll ups focus on fixed and quick time lines within predetermined horizons for returns. There is no passion for the business, cultural integration and non-engagement of frontline teams other than returns on investment.
2iB invests time and effort in the CoAggregation® by building a scalable enterprise, infrastructure and development of all aspects of the business. 2iB also undertakes actions to integrate the CoAggregatees in all forms including standardization of corporate culture, local culture, commonality of holdco approach, clear communications and transparency. 2iB is focused on cultivating systems, processes, culture and corporate support capabilities including finance and accounting, internal HR and payroll, marketing, coaching and pipeline building. The objective is on creating and delivering value to the client, employees, suppliers, vendors and shareholders.
A pure merger and acquisition model: Pure merger and acquisitions (M&A) aim for financial stability of a business and wealth maximization of shareholders. The potential problems of M&As such as ego issues, inflated books, time and misrepresentations hinder collaboration. M&As are financially driven and rarely takes a long-term view. It is the maximization of profits in the shortest time.
2iB implements CoAggregation® which brings in M&As with high collaborations and innovations, along with cost efficiencies + reinvestment (CER), value, returns and profitability. CER brings in managing and sharing of resources, centralization of corporate functions and systems, elimination of duplicate overheads, optimization of over-capability, shared networks, business optimization, managing financial risk, elimination of double incidence of taxation, shared technology and human resource reallocation. 2iB brings in diplomatic skills, EQ, empathy, motivational theory applications, change management and cultural integrations by the right professionals are pre-requisites for a successful M&A.
A consolidated conglomerate: A conglomerate targets a diverse set of companies under it and comprise of businesses ranging from construction to supermarkets to finance. A conglomerate’s ability to manage various and different businesses as well as do focused companies is too diversified and control becomes difficult. A stock market may attach a lower multiple to the earnings and cash flows of a conglomerate, creating a discount. Conglomerate discount is an economic concept where the whole is less than the sum of its parts whereas the CoAggregation®, due to its service and financial consolidation makes the whole greater than the sum of its parts. Conglomerates may lack common strategy and transparency. These may cause inefficiencies in internal and external resource allocation.
The CoAggregation® addresses this by its CER measures. Further, the CoAggregation® can be construed as a conglomerate, but with a focused diversification of business in the same or similar sector and not diversification in varied industries. There is a constant development, implementation and communication of a consistent approach towards holdco level value creation.
A CoAggregation® in a vertical will offer to the customer a complete set of services in a sector by a set of autonomous companies that are complementary to each other. The resultant entity as a result acquires the merits of scale of a large company with the benefits of small and independent agencies eliminating bureaucracy among other things. Such an entity is one which is best placed to serve and survive the market.
An exit model: Exit models focuses on returns to the business owner. It envisages the quickest way to sell out one’s business and make money. These may be achieved by ways of trade sale or an IPO. Further, in an IPO, exits may result in dumping or shorting of shares in the market causing high volatility. 2iB mitigates moral hazard amongst partners through its 4th pillar of Cooperative functions and through proper governance and compliance.
2iB helps build businesses via CoAggregation® and focuses strongly on collaborations between the companies. The objective is to strengthen the fundamentals and sustainability of the companies. CoAggregation is sector-agnostic, but implements different strategies depending upon the sector.