The global economy has been impacted by Covid-19 causing an unprecedented economic crisis during the first half of 2020. Most economists are unsure how the pandemic is going to play out in global markets, as Governments have not had to deal with a global economic and health crisis on a scale such as Covid-19 before. With this uncertainty, many deals that were in progress have been cancelled or put on hold with many terms and offers in the pipeline being renegotiated.
Global M&A value in Q1 has declined by 39% and volume has declined by 25% with a much larger decline expected in Q2 2020. The IMF predicts that global real GDP will contract by 3% in 2020, while advanced economies are expected to see a sharper decline of 6.1%.
Much of what will happen next is still unknown as Governments around the world deal with their individual issues around balancing lockdown measures, the health of their citizens and getting people back to work to get the economy back up and running.
At a microeconomic level during the beginning of this global pandemic, Quinn M&A has seen a number of their current deals and business partners wanting to put deals on hold due to the uncertainty surrounding the global economy, but as the economy has slowly begun to open throughout May and June we have seen one of our largest upturns in enquiries regarding established businesses who were considering undertaking sales or acquisitions post Covid-19.
We have begun to advise clients that now is the time to begin looking into their M&A objectives and be ready to go when an opportunity may arise. Below we analyse 3 things clients should be doing right now if they are looking to undertake M&A activity in the next 6 months.
1. Understand What Your Business Wants To Achieve Through Undertaking M&A
What does your business currently do well and where do you see opportunities for your business to be able to grow and improve? Now is the time for some introspection into your business and to look to make changes to the activities you are undertaking, to fully understand which parts of your business are the largest contributors to revenue and which activities are actually costing you money and look create efficiencies. Consider outsourcing or understand where improvements could be made upstream or downstream to create efficiencies.
2. Know What You Need to do to Achieve Your M&A Goals
What is it you actually want to achieve? It may be that you want to sell of a particular part of your business so that you can focus on your core business objectives and what your business does well, or it may be that you need to undertake a restructure and look to purchase a complimentary business either upstream or downstream to create efficiencies and improve your business processes.
3. Know What Opportunities are Available in The Market
If you are considering undertaking M&A activity you should be up to date on what is happening in the market and keep your finger on the pulse with current deals that are being undertaken as well as opportunities that are coming onto the market on a weekly basis.
Find Out More
If you are considering undertaking M&A activity the experienced advisors at Quinn M&A will be able to assist you with understanding what it is you want to achieve, what is the best way to achieve these goals and assist you with knowing what opportunities are currently available in the market. Call on 1300 784 667 or submit an online enquiry today to arrange your free initial consultation with one of our Directors.
