Here is what a pandemic can do to your M&A activity

Key Takeaways

  • Delays resulting from the unsettled state of capital markets, economies being locked down and companies being forced to scale back operations,
    posing the risk of M&A transactions not being closed on time/being restructured
  • As multiples are likely to be priced lower due to weak top-line and earnings forecasts, some buyers may try to exploit the situation to achieve more favourable pricing
  • With capital markets stabilising, M&A transactions are likely to increase from the second half of 2020. Many transactions were kept on hold rather than cancelled and are expected to be reviewed once conditions normalise
  • Markets are likely to be disrupted until the number of COVID-19 infections starts decreasing and the M&A market adjusts to the new normal in both the medium and long term
  • Private equity firms sitting on substantial amounts of dry powder and watching for the right opportunities are likely to drive positive sentiment towards the recovery of the M&A market

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Acuity Knowledge Partners

Acuity Knowledge Partners

57 Followers

We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/