Menghadapi tantangan dalam iklim bisnis saat ini, yang dipengaruhi oleh faktor makroekonomi seperti perubahan geopolitik, tingginya suku bunga, dan ketatnya likuiditas,perusahaan harus mampu beradaptasi dan fokus pada pertumbuhan yang berkelanjutan. Di tengah situasi yang menantang ini, strategi exit seperti Penawaran Umum Perdana (IPO) dan Merger & Akuisisi (M&A) menjadi pilihan penting bagi perusahaan yang ingin memaksimalkan nilai dan membangun ketahanan jangka panjang.
M&A tidak hanya menjadi langkah strategis untuk pertumbuhan, tetapi juga sering kali menjadi bagian penting dari perjalanan menuju IPO. M&A membantu perusahaan memperkuat posisi mereka sebelum go public. IPO sendiri merupakan peristiwa transformasional yang memerlukan pembuatan equity story yang menarik, penerapan tata kelola perusahaan yang baik, serta pengembangan sistem, proses, dan tim yang tepat untuk memenuhi ekspektasi pasar.”
M&A tidak hanya menjadi langkah strategis untuk pertumbuhan, tetapi juga sering kali menjadi bagian penting dari perjalanan menuju IPO. M&A membantu perusahaan memperkuat posisi mereka sebelum go public. IPO sendiri merupakan peristiwa transformasional yang memerlukan pembuatan equity story yang menarik, penerapan tata kelola perusahaan yang baik, serta pengembangan sistem, proses, dan tim yang tepat untuk memenuhi ekspektasi pasar.”
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TVTranscript
00:00In this program, we will be talking about the Indonesian economy.
00:16Hello viewers, from IDX channel Jakarta, I am Fajar Wayong,
00:20I am here in market review, a program that discusses the issues of the Indonesian economy.
00:24And don't forget, you can watch our live streaming at idxchannel.com
00:28And now, let's follow the full market review.
00:40Today, we will discuss an interesting topic,
00:43and it's not that far from the topic of IPO,
00:47how to prepare a company, and also exit strategies.
00:50And I will read the interview first,
00:54facing the complexities of today's business landscape marked by macroeconomic factors,
00:59such as geopolitical changes, high interest rates, and tight liquidity.
01:04Companies must adapt and focus on sustainable growth in this challenging environment.
01:08Exit strategies such as IPOs and M&As have become crucial considerations
01:13for business looking to unlock value and build long-term resilience.
01:17And M&As are not only strategic moves for growth,
01:20but are often an integral part of the IPO journey,
01:23helping companies strengthen their position before going public.
01:26An IPO is a transformational event.
01:29It requires crafting a compelling equity story,
01:32establishing good corporate governance, building robust systems,
01:35process, and having the right people to meet market expectations.
01:39And to explore deeper about this,
01:41we have Bapak Sahala Situmorang,
01:44Strategy, Risk, and Transaction Leader, Deloitte Indonesia.
01:47Good morning, Pak Sahala.
01:49And Jasmine Marnan, Capital Markets Advisor, Deloitte Indonesia.
01:53Good morning.
01:54Selamat pagi.
01:55Selamat pagi.
01:56Okay, for today's theme, exit strategies from IPO to M&A and beyond.
02:01Maybe before we explore deeper about this,
02:04our viewers are really curious about the background
02:08or maybe the specialization of both of you.
02:11Maybe I start from Jasmine.
02:12Could you tell our viewers what you do at Deloitte?
02:15Okay, thank you very much, Panjar.
02:17It's good to be back here again.
02:20My name is Jasmine, and people call me Jess.
02:23And at Deloitte, I help drive the end-to-end IPO solutions.
02:30So I work with different teams across different functions
02:35and also across different geographies in Southeast Asia,
02:38primarily to help companies prepare for their listing on the exchange,
02:44may it be in the Indonesian Stock Exchange or the U.S. and other regional markets.
02:49And that's how we help companies prepare for their life as a public company
02:55and also life after being listed.
02:59Okay, for the company and life after being listed.
03:03And Pak Sahala, what is your area of specialization?
03:06Okay, thank you, Pak Panjar.
03:08So I'm Sahala, Sahala Situ Morang.
03:11I am leading the SRT business unit.
03:15SRT stands for Strategy, Risk, and Transactions.
03:19So we are helping companies crafting their strategy
03:23and also help them managing the risk
03:26and also assist them in doing the transactions.
03:29So definitely M&A and IPO is part of the things that we are doing at the SRT division or business unit.
03:36So both of you work together to help a company to become IPO ready?
03:39Yes.
03:40Absolutely.
03:41So how about maybe a little flashback for the first half in Indonesia.
03:49Maybe you can share about us.
03:52What's the situation in Indonesia in the first half
03:55and the current state of the play of the Indonesia landscape, maybe from Jasmine.
03:59Yes, so more broadly, I'll talk about the Southeast Asia position.
04:04Then it is a subdued environment, right?
04:09So in terms of the number of IPOs, as well as the deal size and also the market capitalization,
04:16it was not as robust as you would have expected when you compare it to the prior period in the last year.
04:23Now, zooming in on Indonesia, among the Southeast Asian exchange,
04:28it appeared that Indonesia had the most significant drop or decline in terms of the deal value.
04:36There were no jumbo listings that we have seen back in 2023,
04:42but we are very confident that these will just be temporary.
04:47We also see that the energy, the consumer sectors, as well as the healthcare,
04:53they are still driving the trading volume as well as the value on the Indonesian stock exchange.
04:59And we feel that these sectors will remain robust
05:03and that there will be focused or renewed interest from investors,
05:10both from the public and private markets,
05:12particularly in the consumer healthcare and energy sectors.
05:16Okay, I read the data from Deloitte Indonesia from the presentation that you shared before.
05:21Indonesia IPO in the first half is slightly lower than last year.
05:25Yes.
05:26But how Deloitte sees it in the second half of 2024?
05:30Is Deloitte still optimistic on the IPO situation in this year?
05:36Definitely yes, Pak.
05:39Because based on historical performance,
05:44the second half is always better than the first half.
05:47That has always been the case for the last 5-10 years.
05:51So, zooming into Indonesia case, Pak,
05:55because currently you see that every time I talk to investors,
06:00they are very, very optimistic about Indonesia.
06:03Probably for the first half, because of the political condition, the election,
06:09people are still at the wait and see kind of condition.
06:12But I've been talking to a couple of players, a couple of investors,
06:16they are preparing for the IPO.
06:19So, definitely I'm very optimistic about the capital market in Indonesia for the second half, Pak.
06:26Okay, and Deloitte is there to help the companies to become IPO already.
06:30Certainly.
06:31Okay, Pasah Hala.
06:32What do you see in the M&A and investiture space?
06:35Is it common for a company to carry out these corporate actions prior to an IPO?
06:40Yes.
06:41Okay, that's interesting.
06:43I've been actually helping a lot of clients, Pak, doing a couple of,
06:49we call it corporate actions before the IPO.
06:52I can name three corporate actions, Pak.
06:56First is the M&A.
06:58Companies are doing M&A before the IPO.
07:02Actually, they are trying to grab new market.
07:05So, they are trying to increase market shares by doing certain M&A.
07:10So, they are acquiring company in order to get new market, increase their market shares.
07:17So, the revenue growth can be better in the perspective of the new investors when they are going IPO.
07:26Okay, the second thing, Pak, the divestiture.
07:30Certain companies are doing this actually to get rid of the non-performing assets.
07:37Probably, we can give the analogy of cutting out your fat before you are going for the IPO.
07:44So, you are slimmer, you are more efficient.
07:48So, that's the thing that companies are doing before they are going IPO.
07:55The third is actually the joint ventures.
08:00A couple of companies are trying to do a JV.
08:04They are trying to partner with another company to get more capital or to get new way of doing things.
08:15So, new technology, they can do that also.
08:18So, I have seen companies doing acquisition or M&A, doing divestiture and doing JV before doing the IPO.
08:29The main objective, Pak, is to be able to be more, to be in a better performance before they are going IPO.
08:37Because IPO is once in a lifetime kind of activities.
08:41So, they want to be very, very ready before going to the IPO.
08:46Okay.
08:47It's a long story, but a long answer, but hopefully answer your question.
08:51There are some steps that can be taken by the company.
08:53Yes.
08:54Because it's an IPO and IPO is a transformational event like I said before.
08:58So, they must be ready for it.
09:00And then I still have many questions for Pak Sahala and Jasmine, but we have to break first.
09:06Okay.
09:07And the judge will stay with us.
09:08Market Review will be back soon.
09:25And the judge is back with us in Market Review.
09:29And of course, the procedure is still the same as the previous segment related to exit strategies from IPO to M&A and beyond.
09:37And again, we continue our discussion with Mr. Sahala Sitomorang.
09:41Strategy, Risk and Transaction Leader, Deloitte Indonesia.
09:44And also Mrs. Jasmine Maranan, Capital Markets Advisor, Deloitte Indonesia.
09:49And I will go to Jasmine.
09:52We know that 2024 is a global election year.
09:55And there are macroeconomic challenge, macroeconomic headwinds.
09:59And high interest rate is maybe one of the biggest note in this year.
10:05How the companies navigate this market challenge?
10:08How must them navigate this?
10:10Yes.
10:11Thank you for that question.
10:12Very interesting.
10:14Well, companies are trying to refocus and adjust their sales, right?
10:19And trying to rebalance their portfolio and making sure that they have stronger balance sheets.
10:27And as Mr. Sahala mentioned, some companies would actually do some divestiture of non-core assets.
10:34And that's how they could bring cash to their balance sheet and really focus on even strengthening the position.
10:42And some companies can actually engage in mergers and acquisition.
10:48And based on companies that I talked to, they actually do some kind of roll-up acquisition
10:54where they will acquire small companies and then put them together.
10:59For as long as these businesses are right fit for their business, then they will capture the synergy.
11:06And as you mentioned, it is a quieter time now as compared to the prior year.
11:12Most of the companies and conversations that I have with owners and founders,
11:17they are really looking at preparing the company for these corporate actions, particularly the IPO.
11:25So that's when they are trying to strengthen their infrastructure, building their systems, their processes
11:32in order to actually be prepared when the market opens.
11:37Okay. Mr. Sahala, what about you?
11:41Okay. Interesting. I think, Pak, the market has always changed, right?
11:48And you cannot really change the market. You just have to follow the market.
11:56So in relation to this IPO or M&A, I think a lot of companies now doing the dual track.
12:05So dual track, Pak, is actually they are preparing for both M&A and also the IPO
12:13just to get ready when the market condition change.
12:17So actually, Pak, the dual track is not completely different.
12:23The preparation is almost the same. So as Jasmine mentioned, the preparation is pretty much the same.
12:30So you have to get your company ready for the new investors.
12:34But towards the end, it's a bit different. The M&A and then the IPO is slightly different.
12:40On the valuations, on the target investor that you are trying to approach, that is the difference.
12:49But I think this concept of dual track is very important, particularly when market conditions is like it is right now.
13:00Very difficult to predict. So that is actually, Pak, the way you are taking charge of your corporate actions.
13:09One way is actually doing this dual track.
13:12Okay. In the midst of these challenges, they still have to brave for those actions, M&A or maybe the other actions, including IPO.
13:23And then, Pak Sahala, you've done numerous M&A, both from the sell side and from the buy side.
13:29Could you kindly share what are the investors' key focus areas,
13:33which some of our viewers may be thinking about acquisition and divestments as part of their growth story?
13:40Okay. What are the investors looking at, Pak?
13:44Definitely, Pak, I see three things here.
13:50One is actually they are trying to see also the companies who has a very clear strategy.
13:57So this strategy has to involve also the growth strategy.
14:02Of course, the investors would like to see that the company is growing, of course, growing sustainably.
14:09The second thing is they wanted to see a reasonable forecast.
14:15Reasonable forecast meaning that this forecast is in line with the historical performance and also in line with the industry growth.
14:24The third thing that investors would like to see is how the company takes care of their risk also.
14:34How they manage their financials, how they manage the internal control, the governance.
14:39What's important for the investors.
14:42So those are the three things, Pak, that investors would like to see.
14:46Okay. Investors would like to see three things, as said by Pak Sahala.
14:49And Jasmine, you also have been involved in numerous IPOs in the past 20 years.
14:55How have the investors' preferences evolved? Have their taste buds changed?
15:02Absolutely. Their taste buds have changed.
15:04I've been doing IPOs for the last 20 years and I've seen the cycles go up and down.
15:09Prior to COVID, we've seen the traditional and conventional models.
15:15More established companies going out public.
15:18Now during the advent, and this is particularly true in 2020 and first half of 2022,
15:25you've got the new economy sectors coming in and therefore the investors have a more increased appetite in terms of risk.
15:33And they're focusing really on the top line and really exponential growth of these companies.
15:40But after the second half of 2022, there have been some dismal performances, especially from the technology sector.
15:50And therefore, what happened was the appetite of investors have changed and they are now going back into normalcy,
15:58looking at companies who are more established and still having a solid revenue growth.
16:05That's still very key.
16:07However, they are now also focused on the cost structure of these companies
16:12and also looking at something that's a very clear path to profitability.
16:18But most investors really prefer profitable companies now, as well as sustainable cash flows.
16:25So there's positive cash flows.
16:28And if I may add, especially now in this landscape, we've been talking about machine learning capabilities or what they say, Gen AI.
16:38So these things, to me at least, advanced technology could actually help companies in terms of boosting their top line.
16:47Where they could actually make customers be sticky to their products, the use of apps.
16:55And also, there's this increased interest for companies to demonstrate the sustainability practices.
17:03So the pillars of ESG.
17:06And therefore, these ESG, as well as advanced technology, can be embedded in the strategy for the long term.
17:14Of course, it may be investment and cost.
17:17But investors might have to really look at these things on a long term basis.
17:23Because they would definitely create, capture, and deliver value.
17:27Okay, the preferences only applied in Indonesia or globally or maybe in Southeast Asia is similar.
17:33Pasahala, Jasmine?
17:35They're definitely applicable on all fronts, on all regions.
17:40And it may be more pronounced and mature in some of the regions, say the European economy.
17:46But definitely, investors globally, regionally are looking at these things.
17:52Pasahala?
17:54I would agree.
17:56Because I think now it's very difficult for us to say Indonesian investors or regional investors.
18:03Because it's a...
18:04Mixed all.
18:05Yeah, it's a borderless world now.
18:08So global investors can invest anywhere.
18:13Okay, we got it.
18:15We take it as a note.
18:16And last week, Deloitte and IDX had a workshop with the theme, IPO readiness, taking control of your journey.
18:23So zooming in on the IPO readiness part, how long is the preparation time?
18:27But wait, we will continue the discussion after the break.
18:31Stay tuned with us.
18:32Market Review will be right back.
18:37Market Review
18:51And you are still with us in Market Review.
18:54And back, we discuss exit strategies from IPO to M&A and beyond.
18:59And of course, still with Mr. Sahalasi Tumorang, Strategy, Risk, and Transaction Leader at Deloitte Indonesia.
19:04And also Mrs. Jasmine Maranan, Capital Markets Advisor, Deloitte Indonesia.
19:08Jasmine, last week, Deloitte and IDX had a workshop with the theme, IPO readiness, taking control of your journey.
19:15So zooming in on the IPO readiness part, how long is the preparation time?
19:20Well, that varies from one company to another.
19:23Some companies are more mature than the others.
19:26But I would generally say that the preparation would normally take between 12 to 24 months.
19:32And that is because there's a lot of things that needs to be prepared.
19:37For example, some of these private companies, they don't have reporting cadence.
19:42And therefore, in terms of the financial reporting, they would actually prepare and close their books typically between 10 to 15 days.
19:50But these needs to be accelerated, which could probably result in 7 to 10 days.
19:56And best practice would actually say 5 to 7 days.
19:59Because as a public company, you would need to report to the Indonesian Stock Exchange as well as to the OJK in terms of their annual reports as well as the quarterly reports.
20:10And also there will be a preparation in terms of governance, internal controls, and really building the infrastructure.
20:17And also competencies and capabilities and having the right team to actually drive the process.
20:25Again, as you mentioned, it's a transformational event.
20:28It can't be delegated to only one department.
20:31Usually, there is a myth that this should just be done by the accounting and financial reporting teams.
20:37But actually, it's not.
20:38You will have the FP&A, the corporate strategy, corporate finance.
20:43And therefore, if I look at it and I do an analogy, an IPO is like a symphony, an orchestra.
20:51There is someone who will be conducting it, a strong IPO leader.
20:56But at the same time, the music needs to be in harmony.
21:00They will have to make sure that the tune is perfect and harmonious in order to reach a common goal.
21:08And as Sahala said, IPO is just once in a lifetime.
21:12You have to make it right the first time.
21:15So, Pak Sahala, what do companies need to prepare to be an IPO ready?
21:21In line also with my previous comment, what do investors look at?
21:29So, I think investors would like to look at the strategy.
21:35So, I think what companies need to prepare is actually a compelling equity story.
21:44Compelling equity story means a strategy which has to be different with your competitors.
21:52Because you don't want to be a company which has the strategy similar to the other.
21:59So, I think being different is very, very important.
22:03So, that's the first thing.
22:04Second thing, Pak, also in this creating an interesting equity story, Pak,
22:12is how you can put that also into the numbers.
22:15The financial projections have to be reasonable, but also clearly indicate a strong growth.
22:23That is very, very important.
22:27Again, I mentioned, as Jasmine mentioned, the third one is actually how your enablers
22:34are helping the company also for this IPO.
22:38So, we have to be able to indicate how the governance, how the internal control also
22:45ready to support the growth of the company.
22:48Because investor doesn't want to see a company where there could be a significant risk there.
22:54Hence, the implementation of this strategy is not very, very clear.
23:00So, with a strong internal control, strong governance, the investor can be confident
23:06that this strategy can be implemented well in the company.
23:12So, from your experience, Jasmine and Pak Sahara, what is the most challenging part
23:16in helping company to be IPO ready?
23:19Well, based on my experience, the time that really it takes for companies to get ready
23:26for the audits, that's the most challenging.
23:29So, normally, the auditor will sign off on the financials.
23:34And it takes a bit of time in order to get that signed off.
23:38And a few cases where the numbers and the book, the closing of the books are not really
23:46that fast.
23:47And therefore, that actually can derail the transaction timetable.
23:51And also, from a governance perspective, companies that I have seen, they are kind of like it
24:00takes time to get the right board of commissioners and directors and setting up the remuneration
24:07committee, the audit committee, and other committees that are required for a public
24:12company.
24:13So, that must start very much, a lot early in order to ensure a smooth timetable and
24:20meet the IPO transaction timetable.
24:23So, that's the most challenging part from Jasmine.
24:25It is.
24:26From my experience, Pak, if I can use Jasmine's analogy on the music.
24:35The symphony.
24:36The symphony.
24:37The difficult or the most challenging part, Pak, is actually how to make sure that everybody
24:44is going in the same direction, at the same direction, same time.
24:50So, timing is important also, Pak.
24:53Because, for example, like the brass section or the other section, they are going at the
24:58different time or it will be very, very bad.
25:02So, the objective is actually how to create a symphony of music that can be easy to listen,
25:11nice to listen for the investors.
25:14So, we have to have this all parts of the company going to the same direction, following
25:23the leader, if you like.
25:25That is the most difficult or challenging part, Pak.
25:28Okay.
25:29That's the most challenging part from the experience of Jasmine and Pasahala.
25:31So, we already know what must be prepared by the company, how long the preparation time
25:37for the IPO.
25:38So, what are the key factors of a successful IPO?
25:42Okay.
25:43Let me start.
25:44So, key success factors will really be to have the IPO readiness assessment start that
25:52early.
25:54And then, I would say, second will be clearly a good project management in order to ensure
26:02that everyone is up to date with what's happening in terms of the IPO objective.
26:09And also, communication.
26:11That's very important.
26:12In any relationships, in any events, in any undertaking, strong communication skills.
26:20That would be very important.
26:22So, that would be my top three in order to have a successful IPO.
26:25To make a successful IPO from Jasmine and Pasahala.
26:28I also answered the same questions, Pak, on our event last week.
26:35So, I also have three things for the successful IPO, Pak.
26:41One is preparation, Pak.
26:43Second is preparation.
26:44And the third is also preparation.
26:48Because I cannot stress more on this preparation.
26:55Because some companies take it too lightly, I would say.
26:59Based on experience, actually, the key is actually preparation to have a successful IPO.
27:05To have a successful IPO.
27:07So, preparation is the most important thing.
27:10And I'm sure that our viewers are really curious, want to know about the IPO and what after the IPO.
27:17But unfortunately, our time is limited.
27:19Pasahala, thank you.
27:20Jasmine, thank you so much for joining us.
27:23We will dig deeper in the next opportunity.
27:27Jasmine, thank you.
27:28Pasahala and Pemirsa, stay with us.
27:30Market Review will be right back.
27:47Market Review