Covid Pandemic = Quantative Easing = Bargain M&A Y/N?

This topic contains 2 replies, has 3 voices, and was last updated by  Connie Howe 5 months, 1 week ago.

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  • #109548

    Paul Gray, MBA
    Participant

    Central banks and governments all around the world have commenced an unprecedented level of quantitative easing to ensure that their economies are enabled to respond to the devastating impact of the Covid 19 pandemic. It is therefore believed that for most businesses, access to credit may not be an issue, provided they meet the lending criteria. This will undoubtedly should help moderate any sharp upswing in financing rates in the medium term and be a catalyst to jumpstart economies as soon as economic activities resume. That said, to what extent do you believe the abnormal interest rate environment (due to deliberate actions by CB’s) will be supportive or detrimental to any potential M&A activities? Will it result in considerable mispricing of transactions? Or is it the ideal time to shop for bargains?

    #109973

    Jay
    Participant

    Definitely a good time to shop for bargains. I was on the sell side Private Company to a Fortune 50 in late 2008/early 2009. The Fortune 50 had come in with an offer then through using due diligence and the current economic climate was able to drive the price down. Just not sure on integration / real estate planning for something like COVID once obtaining the bargain.

    #110159

    Connie Howe
    Participant

    I was discussing this with a friend the other day. It appears a good time for bargains. But also risky due to valuation and financing issues, as well as heightened uncertainty over business models.

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