Reply To: The impacts of Covid on current earnings

#38727
Pawankumar Sharda
Participant

The Acquirer would not rely only on the pandemic year to assess the target company. Along with Covid year, last 5 years financial performances of the target company, Earnings quality, abnormalities, one-off transactions, management working style, commercial, operational and many other DD would be considered. So just one year performance would not significantly be a decision-maker. However, if the company is on the verge of bankruptcy or has a going concern, for instance, many chain restaurants businesses severely affected by COVID, in that case, terms of M&A will be based more on the future viability of the business and commercial DD (market/business model) will have more weightage.

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