Case Analysis on Hayleys PLC Acquisition of Singer Sri Lanka

                It is important to note down some key observations from the case so that after identifying the relevant issues, considerable recommendations can be made to Hayleys PLC that how they can get things back on track and how they can recover from any strategic losses, which they have experienced due to this strategic decision of acquiring Singer Sri Lanka. The fact of the matter is that company was following an aggressive growth strategy so that they can achieve higher growth and progress in the future achieving their target of 1billion revenue. The target was certainly realistic for the company as they have been one of the major forces in many sectors of Sri Lankan business landscape. Their diversity and variety of business has made them one of the giants in the business, and working across the borders has also been an important factor to make them such huge corporation. But all these facts cannot keep companies stay away from wrong strategic decisions or wrong strategy, which can dent the business in so many ways. The decision of acquiring Singer Sri Lanka proved a wrong one, because Hayleys PLC have to take loans, and borrow so much money for this acquisition, knowing the fact that Singer Sri Lanka is not doing well in their business. So, this decision put them under lot of debt and financial performance started to get lower. Here are some recommendations for Hayleys PLC to consider for getting out of this trouble and make things better for the future. These recommendations can be further explored by the company as these have been general in terms after looking at the issues:

        First of all, the acquisition of Singer Sri Lanka was a bad decision as Hayleys PLC was already involved in so many business portfolios, so entering into another business portfolio was not a right thing. This increased their financial burden in shape of so much debt. So, it is recommended to Hayleys PLC that they should look to sell some shares or even complete shares of Singer Sri Lanka in the market. They should look to sell the company shares to any other company, and if they get a handsome offer, which may not recover their whole loss, but still, it can recover majority of losses, then they should go for it. Moving forward with a business, which is lower in performance, and incurring so much debt, it is not wise to continue with Singer Sri Lanka, because it can effecting their other businesses as well. So, it is recommended that they should sell Singer Sri Lanka shares to other companies or investors, and when they are done with it, pay back debt of banks with that money so that debt ratio can quickly go down and they can breathe smoothly again.

            The other fact is that they also made few other investments as well like they went invested in hotel business etc. The tourism and hotel industry is a huge industry and it has so many aspects to look at. So it was again a bad decision by entering into a huge industry with less planning and preparation. It is recommended to Hayleys PLC that they should also get their selves out of this business too, and sale their shares or complete hotels to other industry leaders. Try to find out a balanced deal, so that they can quickly acquire more money to pay their debt and recover their financial losses. It would allow them to focus more on their primary successful business portfolios, and they can later expand into other business portfolios, when they are completely out of debt.

            It is also recommended to Hayleys PLC that they should make growth decisions very carefully every time when they go for any growth and expansion into existing businesses or looking to enter into any new market. They must assess all the relevant factors, and make a proper projection that what future outcomes could be for any particular decisions. The above two recommendations are extremely important for them to consider as they will not only get out of the businesses, which are not profitable, but they will also have some money to use for paying back debt and boosting their major business portfolios.

        It was also observed that Hayleys PLC acquisition of Singer as well as expansion into various other businesses driven the focus as well as time of management away from its core businesses. It means that all the time and efforts were being wasted into those businesses, which are non-profitable and core profitable businesses were suffering due to lack of focus. So, it is recommended that Hayleys PLC should get their focus back on their core business portfolios, and leave other sectors businesses at this troubling time. When things will get better, they can go for this aggressive growth strategy, as goals set by this strategy are not proving beneficial for the company.