E&Y: Seeing the deal through

When Ernst & Young got the mandate from Vodafone late last week to carry out a due diligence on Hutchison-Essar Ltd, it was another feather in the cap for Rajiv Memani, the head of the professional services firm. It was a prestigious assignment and Memani was able to breast the tape ahead of his rivals.

Getting the Vodafone account may not have been difficult for Memani -- while one of its arch rivals was Vodafone's auditor and was thus effectively out of the race, another rival was in an advanced stage of negotiations with Reliance Communications. It was a cakewalk for the top Ernst & Young team that had flown to London for the purpose.

Ernst & Young completed its due diligence on Hutchison-Essar this week, and now it is the turn of others to carry out a similar exercise. Whoever finally bags the deal, one thing is certain: Memani's list of business partners will read much stronger hereafter.

Things weren't so comfortable when Memani took over from his father on April 1, 2004. In 2002, Ernst & Young had taken over Arthur Andersen and the integration of the two teams was far from over. Sceptics had called it a cultural mismatch. It was for Memani to make the merger work. To make matters worse for him, eight key partners of the firm quit soon after he took over. It was natural for people to doubt if Memani had it in him to deliver the goods.

Proving all his detractors wrong, he has grown the business steadily since then and is now firmly in control. "We have grown close to 40 per cent in 2005-06 (around 20 per cent in 2004-05)," he had told Business Standard in an interaction some time back. In 2005, Ernst & Young had 65 partners. By the end of 2006, the number has risen to 90. The firm has partners on deputation in several foreign countries. Memani leads a young team at Ernst & Young -- the average age of the firm is just 27. In his late-30s, Memani worsens the average, but only marginally.

He has been associated with several high profile transactions in the last couple of years. Ernst & Young is the Indian government's advisor in the Iran-Pakistan-India gas pipeline. It advised ONGC on its Sudanese foray and Indian Oil on its plans to acquire the prestigious Tupras refinery in Turkey.

He also did the $400-million "takeout financing" (this involves replacing old debt with new, while placing some equity with the lenders) for Sanghi Cement, one of the country's largest such deals. He was the advisor to Fortis Healthcare in its acquisition of the Escorts Heart Institute from Escorts Ltd. He was also the Sahara Group's advisor on its proposed sale of Air Sahara to Jet Airways.

But the deal fell through. It was one bargain Memani could not pull off.