COVID-19 has thrown a monkey wrench into the mergers and acquisitions area. Companies looking for buy opportunities may find that the current environment provides opportunities that would not have been realistic before the pandemic. In some instances, the pandemic may have increased the seller’s resolve to sell due to the stress and anxiety of operating the business during these difficult times. Strategic buyers with cash and industry expertise may look for sellers that provide existing business volumes in the buyer’s area of business. Or, buyers may look for sellers that provide a new product, service, management talent, skilled employees, or some combination of these attributes. It does appear that the pandemic has lowered many sellers’ valuation expectations thereby motivating sellers to be more flexible than they may have been several months ago. This may make it easier to structure a transaction that makes sense for both sellers and buyers. On the other hand, as the impact of the pandemic on a seller’s business may be hard to quantify, it puts a greater burden on buyers to accurately value a seller and complete the due diligence process. If you have any questions about business transactions or need any assistance, please do not hesitate to contact our business attorneys.
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