This is a question we have been getting a lot from business owners in the last several months. Many owners believe that they need to sit on the sidelines and FULLY recover before they can achieve a successful transaction, and the reality is that this is not necessarily the case.
While many “would-be” acquirers are looking inward and focused on operational challenges in this market, there is still a healthy pool of financial investors and strategic buyers out there looking to acquire businesses in this market. We have seen it on the five deals we closed here at UHY in the past 60 days, with some of these deals closing at pre-pandemic valuation levels while the companies were completely shut down by the pandemic. And we continue to see strong buyer interest and momentum on deals we have launched over the past few weeks.
All that being said, navigating this M&A market brings about new challenges that must be successfully navigated. More so now than ever before, (i) doing the upfront legwork of identifying the “right buyers” to target, (ii) preparing a monthly financial forecast to illustrate what the eventual path to recovery looks like, and (iii) positioning your company’s core strengths and competitive advantages is critical in achieving an optimal outcome in a sale transaction.
COVID-19 is not an issue with YOUR COMPANY, it’s not even an issue with YOUR INDUSTRY, it’s a global issue impacting every company worldwide. This means that buyers with a long-term outlook are willing to look past your near-term challenges, but it is incredibly important (and OUR JOB) to get them comfortable with these challenges and get them focused on your company’s core strengths.
It may be more challenging in today’s M&A market, but deals are getting done!