29 Jul Around the Web: A Week in Summary
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A recent article from Axial entitled “Consumer M&A: Acquiring the Competition” discusses several types of acquisitions and the value that each can deliver. As seen in the 2008-2009 economic downturn, times of crisis can lead to opportunity in the M&A space.
Types of acquisitions explored include:
- Acquiring the Competition – This deal type involves acquiring potential challengers to your business.
- Established Brands – This deal type involves acquiring larger, more established brands in your industry.
- Horizontal Expansion – This deal type involves expanding into adjacent businesses.
A recent article from Bloomberg Tax entitled “INSIGHT: Impact of Covid-19 on Middle-Market Private Equity M&A” discusses the ramifications of the COVID-19 shutdown on middle-market private equity mergers and acquisitions.
The shutdown has presented challenges including:
- Many sellers have put their sale plans on hold or at least have slowed things down
- Buyers are struggling to complete due diligence as in-person activities have been limited
- Access to debt markets is tighter
- Risk allocation and valuation have become key issues
Despite these challenges, buyers are seeing favorable deal terms and valuation gaps are being bridged through a variety of deal features. And with challenges comes opportunity.
A recent blog post from Exit Strategies Group entitled “M&A Advisor Tip: COVID-19 Era Due Diligence Part 1” explores potential questions that may come up during due diligence regarding staffing in relation to COVID-19.
The workplace as we know it has changed and business operations have had to adapt to survive COVID-19 challenges. This will likely come up during the due diligence phase of selling a business. Questions may arise regarding layoffs, key employee retention, compliance, health and wellness considerations, safety plans, and remote working.