Reply To: How will Corona affect global M&A activities?

#110389

Paul Reed
Participant

Interesting topic Tobias, I’d like to hearing everyone’s opinion in this, and what they are seeing.

Personally, and just from my experience, I am seeing an increase in small-mid market owners inquiring of selling their business, or looking to partner with investors, and private equity firms are taking notice. As such, I believe small-mid market fragmented industries are ripe for roll-up acquisitions, and therefor will experience increased activity.

I feel the pandemic can be treated from other past crisis, such as the 2008 global recession, reason being, is that corporations may begin to work differently, and so from a more macro/global position, I believe we will also invariably see an increase in M&A.

This will be encouraged for the following reasons:

a. interest rates will encourage investment
b. overcapacity may be recognized in industries; and most importantly
c. acquirers will begin to identify non-essential costs in targets in what might be a new working normality and seek to capitalize on de-layering and reducing overheads to increase value and profitability

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