Last week, Equiteq held a webinar ‘Does your firm meet the criteria to realize value now?’, attended by business owners from all sectors of the knowledge economy.
The webinar was hosted by David Jorgenson, our CEO; Jerome Glynn Smith, a Managing Director in our M&A practice, and Paul Dondos who runs our origination and buyside efforts globally. We expanded on the rationale for why C-19 may create a unique window to realize equity value, covering the latest on what buyers and sellers are saying and doing, and providing a framework to assess whether your firm has the characteristics to take advantage.
The recording and some key take-aways below. You can contact us directly on info@equiteq.com if you’d like a copy of the materials, or would like to talk through the details and how they relate to your business
Some key take-aways:
- Clearly C-19 has caused disruptions, but some market strength has developed and in certain circumstances the current market is favourable for sellers to achieve very attractive deals
- Liquidity is at an all-time high with financial investors in the private markets
- Evolving competitive landscapes (and the requirement to stay relevant to B2B and B2C customers) will drive growth plans for strategic buyers that systematically involve M&A – Equiteq has close to 20 projects ongoing at the moment with these drivers at the core of strategic interest
- The pandemic has provided a strong test of resilience, which will drive demand for well-performing business
- Market sentiment will improve as visibility increases, fast
- There is already a scarcity of sellers vs. buyers in the market, in particular for assets of quality. Businesses that are pre-prepared to engage with investors and acquirers will benefit
- We are seeing some changes in the way transactions are progressing towards closure, including:
- Exceptional treatment of FY20 in the structuring of earn-outs
- COVID normalisations
- Creative dealmaking to get things across the line
- Time may not be on your side to conclude a deal – with potential risks including removal of favourable tax treatment for entrepreneurs, second spike of the virus, geopolitical uncertainty, shareholder misalignment