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

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