Survey Responses: How COVID-19 Has Affected M&A Outlook

Alex Karlsen

On behalf of everyone at CAPTARGET, I hope if you’re reading this that both your family and your business are doing okay.  The COVID-19 pandemic has had unimaginable effects on our lives and we are all trying to manage it as best we can.  

As we’ve continued to (remotely) operate as a business, and serve the broader M&A market of professionals as our clients, the conversations have been relatively positive. 

In an effort to pass along as much information as possible to our industry, we asked your peers to send in some anecdotal insights into what they’ve seen in their business these past few weeks.

What Actions are M&A Firms Taking?

First and foremost, we want to note the overriding themes we heard about from our network.  Many of our conversations have moved quickly from "what have you been seeing?" to "what actions should I take inside my business?".

Begin (or enhance) your strategy for what your business will look like in 90 days. 

Start interviewing potential vendors about their value.  We can help you open up those lines of communication.

Start a dialogue with future clients.

M&A firms need to pivot to focus more on origination.  Business owners are going through a challenging time.  Make contact, and position yourself as an advisor on loans, cap raises and be a lifeline for owners. 

M&A Survey Results

Here’s what we learned.

Private equity is still actively looking for deals and transacting.

On both sides of the table, we’ve seen buyers with strong profiles reiterate that they are “open for business” and aggressively looking to make acquisitions.  M&A responders nearly across-the-board indicated that they’ve received contact from buyers indicating this in the past few weeks.

Deals are still being closed.  

Several groups responded to indicate they are “still going forward with deals” and two indicated that deals have closed during the past 4 weeks.  

Still, many deals have experienced so-far minor delays in closing.  Sellers of smaller companies seem more affected than larger companies.

Delays may also depend on geography, and industry.  Both buyers and sellers of companies in industries that are not experiencing negative effects on operations from Covid-19 were not surprisingly more likely to be moving forward.

M&A is still signing up new clients.  

Multiple groups indicated that they have signed new clients in the past month.  This is supported by our own work with clients here at CAPTARGET.  We have initiated several new campaigns to target buyers and deliver new prospects to M&A groups.

Sellers in general are concerned about 2020 performance and how it may affect their future valuation and/or sale.

Several professionals shared this feedback, that conversations with current sellers and those who are yet to go to market have included angst about what the drop in business will mean for future valuation. 

Thank you to all of you who responded to our outreach and participated.

Read more about our services for M&A firms here.

Stay up to date with our best practices in deal origination and more with CAPTARGET insights.

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