Impact of COVID-19 on Lower Middle Market M&A

As we approach the end of May 2020, the mergers and acquisitions market is in flux, and the number of closed transactions has dropped significantly. Just as the impact of the pandemic has varied significantly company to company, the impact on mergers and acquisitions will vary deal by deal. However, here are some general observations:

What should you do if you were considering an exit pre-pandemic, or need to consider selling now? Unsurprisingly, there is no one-size-fits-all answer.

As of end of May, we believe there may be opportunities to consider bringing certain businesses to market over the summer or in September, again assuming we do not see a resurgence in virus cases or receive poor economic news.  

But in every situation, the best way to keep control of your exit is to understand all your options and your priorities.

To decide on your best course of action, it can be helpful to map out all the short- and long-term exit options, and understand the types of buyers who may be interested in your business today and in the future, how their goals may have changed, how they might value the business today and moving forward, and what key levers you can adjust to improve value. Then overlay your personal goals and timelines, your tolerance for risk, and your financial requirements.

If you would like to discuss, please do reach out. We are happy to discuss or answer any questions, and discuss timing and the current changing market. We have helped many entrepreneurs navigate decisions on timing and planning for an exit. You can set up a confidential, no-cost consultation here.

*Data from Capital IQ

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