Winning the new financial era

Chapter 313 The Three-Year Covenant
"Yida, you should focus more on companies like Ruixiang and Huimin Travel.

The pet market is dying, and at most a company worth tens of billions of dollars will be born. "

Zhang Sanshi continued to persuade Zhang Yida, "A person's energy is always limited, and you should focus your limited energy on things with greater significance."

"Then why don't we make a three-year agreement, and the two parties will merge after three years, and the share will depend on the pet industry assets controlled by both parties and the company's valuation."

Both Zhang Yida and Zhang Sanshi have a strong desire to control. Seeing that Zhang Yida couldn't convince the latter, he came up with a new plan.

"Yida, are you sure?"

Zhang Sanshi felt that this plan obviously had the upper hand.He does not believe that Ruixiang or Patenet will integrate industries faster than Gaoling Capital.

Because Gaoling Capital specializes in PE, it has also prepared a pet industry investment M&A fund of more than US$10 billion.

Although the sharp to the third phase of the industry fund raised 25 billion US dollars, it can only invest [-] to [-] million US dollars in the field of pet industry.

In terms of capital, Rui Xiang was no match for Gao Ling.

As for the professionalism in the pet market, Pate.com is a professional website, but Gaoling also employs experts and scholars in the field of pet industry.

"Sure!"

Zhang Yida really wanted to "gamble" with Zhang Sanshi to see who had a better investment vision, himself or Zhang Sanshi.

"Okay, then we can start to prepare. Not limited to pet food, pet e-commerce, hospitals, any pet-related industry can be counted.

Starting in June 16 and ending in June 6.As soon as the three-year period expires, we will ask a third-party agency to do an asset appraisal. "

After speaking, Zhang Sanshi looked at Zhang Yida, waiting for his reply.

"No problem, just do it!"

Zhang Sanshi also became interested, and said with a smile: "When the time comes, you can't go back on your word if you lose!"

"It's okay to sign an agreement."

Zhang Sanshi waved his hand, "That's not necessary. Your character is still trustworthy."

"By the way, we have to add an upper limit. The total investment within three years will not exceed 10 billion US dollars."

Zhang Yida remembered that there is still such a loophole. If the three-year agreement is approaching, the assets of petnet will exceed the pet industry controlled by Gao Ling.

At this time, if Gao Ling spends billions of dollars on you to buy a bunch of pet companies to recharge, then Petnet will lose.

"Don't worry! Gao Ling won't be so bad. If we lose to Patenet after investing 10 billion US dollars, that will only explain one problem."

Zhang Sanshi added: "It shows that Patenet's capital utilization rate is higher, and it is better at capital operation. In this case, we will abdicate to let the talents."

"Okay, then it's settled!"

Zhang Yida clearly remembers that in his previous life, Gaoling Capital took three years to acquire and integrate 700 pet hospitals across the country, and then merged with more than 400 pet hospitals of Ruipeng Group, directly expanding into a "pet hospital" with thousands of national chain pet hospitals. medical aircraft carrier".

This acquisition battle is really a bit scary.Money is so capricious.

This kind of acquisition is not a random acquisition, even if there is a premium, it is also based on China's fast-growing pet market.

For Petnet, the competitors do not come from online, but from thousands of pet hospitals under the Gaoling Group.

Just like Ari killed offline retail, offline pet hospitals might kill online Pete.com.

In addition to treating cats and dogs, these pet hospitals also sell a variety of cat food, dog food, and pet supplies.

Declining Zhang Sanshi's invitation to lunch, Zhang Yida came to Petnet and called Lan Lan from Rui Xiang.

"What, Mr. Zhang, you...you and Zhang Sanshi made a three-year merger agreement?"

After Lu Fenghai heard Zhang Yida finish the series of conversations he and Zhang Sanshi had met today, his expression was very serious, as if he was worried.

"Yes, I'll come back and discuss it with you."

It was only now that Zhang Yida remembered that he forgot to discuss with Lu Fenghai, who was also the co-founder of the company anyway.

"Why merge with them? The big deal is that their market share is high, and our market share is small. It's not like we can't survive."

Zhang Yida shook his head, "Your thinking is wrong. Their purpose is to rule the entire market.

You open a pet hospital in a community in Rongcheng, and Gaoling also opens a pet hospital next to you, and the medical expenses are cheaper than yours. "

"What does that matter? Let's start a price war." Lu Fenghai still looked a little unconvinced.

"For example, out of 1000 hospitals, 500 will compete with us on price, and the other 500 will make money.

We lost a lot of money, and other people's revenue was balanced.We crash first.That's the benefit of being large. "

Lu Fenghai was still a little unconvinced, "What if we have more hospitals?"

"That's the best! We annexed them."

Zhang Yida explained: "Gao Ling is determined to enter this industry, and sooner or later we will have conflicts with them.

According to the nature of unicorn mergers in recent years, if we want to enter a healthy and profitable state, we can only merge with them. "

"Gao Ling has prepared a pet investment fund of US$10 billion, how much do we have?"

Zhang Yida looked at Lan Lan, who smiled wryly, "Boss Zhang, you spend money so fast.

We spent US$5 million on the investment in Douvision, and a little over US$3 million on the acquisition of Bilibili.

Tell me, how much do we vote for Pete.com? "

Zhang Yida waved his hand, "Let's not talk about this first. Let's discuss how to defeat Gaoling first!"

Turning to look at Lu Fenghai, "Fenghai, tell me what you think!"

"Invest, build a hospital, buy a hospital. Or buy a pet food factory.

Anyway, let Petnet assets or valuations inflate as quickly as possible. "

Lan Lan raised an objection, "With all due respect, blind and disorderly expansion will lead to a big setback."

Zhang Yida commented: "Both of you are right. It is necessary to expand and maintain internal stability. Therefore, the next task is very heavy and arduous!"

"In the pet market, the two most important segments, pet food accounts for about 40% of the industry's total consumption, and pet medical care accounts for 25% of the market.

For pet food, we have Dogford, and for pet medical care, we have Pet Hospital.

Therefore, next we will continue to invest funds and resources in these two brands.

On Dogford's side, I'll go and convince my dad to let Dogford join us. "

Zhang Yida paused, "This refers to the domestic market.

The largest foreign pet market is the United States, with 1.84 million pets, and the industry scale is 667 billion US dollars, which is more than three times that of the Chinese market.

Therefore, I decided to invest in pet companies in the United States under the name of Petnet. "

"Mr. Zhang, the pet market in the United States is relatively mature, and the chances of high-quality start-up companies appearing are not high, right?"

Zhang Yida looked at Lan Lan, "The fact is exactly the opposite of what you said, because the market is big, and there are more opportunities."

"The penetration rate of pets in American households is as high as 68%. On average, each household has 1.9 cats or 1.6 dogs. Is it scary to ask you?
Know why there are so many zombie dogs in American zombie movies!Because they keep dogs, keeping cats is as common as raising poultry in rural households in our country. "

Lan Lan was quite surprised when she heard this. She has never been in the pet-related industry, so she really doesn't know the relevant data.

The number of cats and dogs reported by Zhang Yida is more than half of the population of the United States.

"During the financial crisis in 2008, despite the economic downturn in the United States, the growth rate of the pet industry market was still ahead of other retail industries.

Do you know why? "

Zhang Yida explained with a smile: “Because Laomei regards pets as family members, pet-related products have become “necessities”.

Even in an economic downturn, pet owners are more willing to cut other personal consumption to ensure the life of their pets.

This kind of stickiness in the pet emotional economy enables the pet industry to remain relatively strong during the economic downturn.

Working in the pet-related industry in the United States is a "safe-haven industry", as strong as gold, and there is no need to consider unemployment. "

"It's true that pets are regarded as treasures. I think our country also has this trend. Some young people treat cats and dogs better than their own parents." Lan Lan commented sharply.

"Haha," Lu Fenghai said with a smile, "I think this has something to do with the increasing pressure of modern society, and all our emotions are pinned on pets."

"Not exactly," Zhang Yida put forward his point of view, "It has more to do with family institutions, the aging population, singles and DINKs. These are the three main reasons."

"The pet food industry is currently showing an oligopoly market structure.

Nestle and Mars accounted for half of the U.S. pet food market in 2015, according to Euromonitor International.

Among them, Nestlé accounted for 30%, Mars accounted for 20%, and the top five companies accounted for 72%.

From the perspective of the global market structure, Mars ranks first, accounting for 25%, followed by Nestle with a 22% share, and the top five companies account for 58%.

Therefore, you don’t even need to look at pet food. They are all big companies and cannot afford to invest. "

Lan Lan was aroused by Zhang Yida to invest in the pet market, and asked, "What about pet medical treatment?"

"There are 26000 pet hospitals in the United States, and the top four hospital chains each have a number ranging from a few hundred to more than 1000.

And they are all large hospitals, which together account for 40% of the industry. "

"Then the market structure has been formed, what else can we invest in?" Lan Lan lost interest in investing in an instant when she heard that pet medical care was out of the question.

"We invest in pet e-commerce, and there are still some opportunities in this segmented industry."

"Peter's colleagues?" Lan Lan asked.

"Yes, I have already found the target, there is an American pet e-commerce company Chewy, I think it is not bad.

There's also Vet First Choice, a company that offers online pharmacies and home delivery services for veterinarians, and could invest in it too. "

Zhang Yida was engaged in this business in his previous life, so he is very clear about these two companies that went public in 19. The former has a market capitalization of up to US$140 billion, and the latter has a market value of US$45 billion.

Ruixiang invested in Patenet, and Patenet took the money to invest in these two companies, bringing its own valuation.

Zhang Yida couldn't believe it anymore. Compared with investment, he could still lose to Gaoling Capital?
Both companies, however, are valued higher than Patenet at this time.This round of Patenet's financing is not large, and it really can't afford to invest in these two companies.

"Okay, I'll look for information about these two companies later on."

Lan Lan asked again: "Then, should we talk about the valuation and financing of Petnet?"

Zhang Yida snorted, "Feng Hai, report the financial and operational data to Mr. Lan."

(End of this chapter)