The pandemic halted the bulk of M&As in their tracks in March of this year. But it has also paved the way for innovation and progress in strategic deal making that the industry has been crying out for.
Here are three tips to aid strategic deal making during the pandemic:
Due Diligence is Critical, but Risk Appetite is Key
The uncertainty surrounding demand, supply chains, product costs, operational strategies – essentially the entire global economic ecosystem – heightens the importance of due diligence. The additional unknowns mean that deals may require a greater leap of faith, so companies should carefully reconsider their forecasting processes and appetite for risk and make deals accordingly.
Bridging the Valuation Gap
We’re seeing companies get creative in their bridging of the valuation gap in the current market.
Sellers and buyers should consider the value to be drawn from talent retention, growth incentives, deal structuring, and operational processes (including those related to the increased cyber security risk from WFH arrangements), as well as the difference between market conditions and short term increases in operating costs resulting from COVID-19.
Business Relationship Development
Companies that effectively and coherently outline their business position, including the aspects that have been impacted by COVID, and their strategic direction are seeing more success in their acquisitions.
Your company’s ability to build business relationships by leveraging both coherent strategy and interpersonal rapport plays a huge role in your success. Yet, clients are reporting that developing rapport via Zoom poses new businesses challenges. Read this INC Guide to learn about building rapport during online meetings.
Reach out for any assistance with business and legal strategy during the pandemic. We’re here to help!
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