Does Government Support Change the Acquisition Thesis?
In India, we're seeing a specific acquisition pattern: buyers aren't just acquiring good businesses - they're acquiring businesses that happen to sit inside a government scheme.
PLI incentives, state capex subsidies, export incentive schemes, once a manufacturer qualifies for one of these, it becomes a target in its own right. The logic is straightforward: acquiring the business gets you the subsidy, the qualified-supplier status, and the capacity that's already been built out to meet the scheme's conditions, all faster and cheaper than trying to qualify for the scheme yourself from scratch.
In other words, the scheme isn't just helping the business grow. It's becoming a reason to buy the business.
Which made us wonder: does the same thing happen in the U.S.?
There's no direct PLI equivalent, but there's no shortage of policy-linked incentives, Opportunity Zones, IRA clean-energy credits, CHIPS Act funding, state-level manufacturing incentives, historic tax credits. Do buyers there actually acquire because a target sits inside one of these programs - the way we're seeing happen in India? Or does it work differently, is it more that the credit sweetens an economics case that already existed, rather than being the reason the deal gets done in the first place?
Genuinely asking the U.S. searchers/sponsors here - is "buy the business because it qualifies for the incentive" a real strategy in your market, or is that more of an India/emerging-market pattern that doesn't really translate?
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