The coronavirus pandemic and the resultant economic crisis affected mergers and acquisitions (M&A) globally and significantly. With the pandemic, hundreds of thousands of businesses on a massive scale and in a very short time had to stop either most or all of their activities. Millions of workers were laid off or on 'mandatory' leave, consumer spending and purchase power drastically went down. Supply chains have been disrupted. Demand for energy resources, especially oil, decreased.
Due to the impact of the coronavirus pandemic, M&A activity on a global scale decreased significantly and even came to a near standstill by the end of March 2020. The level of M&A activity in the United States (US) fell more than 50 percent in the first quarter of 2020 compared to 2019, to $253 billion.
M&A has endured and recovered from many past economic crises, including the bursting of the dot-com bubble, which was felt strongly between 2000-2002, and the 2008 world financial crisis, which particularly marked the period between 2007 and 2009.
As with the financial and economic crises in the past, the uncertainties in the business and capital markets, which took effect with the coronavirus epidemic, caused buyers to restrict their purchasing activities and postpone their purchasing plans. This time around, however, the situation is different: The pandemic has had a negative impact not only on the financial system in general, sellers' valuation, and buyers' appetite for short-term deals but also on many other factors that influence M&A deals.
Among these factors are the changing terms of the agreement, the mistakes made in making sense of the 'new situation' that emerged after the pandemic, and interpreting the crisis conditions that came with it. In addition to these, the applicability of steps taken after due diligence, question marks regarding the regulations including pricing and the determination of the terms of the agreement, and the prolongation of the time required to obtain the approval of the parties to make a deal are among the factors that negatively affected the M&A agreements during the pandemic.
Moreover, unlike the past crises that affected the activities of M&A companies, due to the pandemic, significant changes occurred in the negotiation and realization of M&A transactions. With the majority of the industry's main actors starting to work from home, it has become undeniably important for buyers, sellers, merger and acquisition companies, and legal and financial advisory service providers to use new technologies and creative collaboration tools effectively, in short, to adapt to changing conditions.
MergersCorp International is one of the companies that carry out acquisitions and mergers (M&A) activities on a global scale and stands out in this sector, and continues its activities despite the coronavirus epidemic. The company has an extensive network of M&A Advisors who handle mergers and acquisitions for businesses with annual revenues ranging from $500,000 to $250 million in technology, construction, banking, manufacturing, healthcare, services, distribution, engineering, education, transportation, and more.
“Get connected with the right buyers for your business and sell for more.” With this motto, MergersCorp offers business owners the support they need. The company names strategic insight, expertise in economics and specifically in M&A, and the most up-to-date technological tools among the qualities needed by top-notch business brokerage today.
Stefano Endrizzi, a senior entrepreneur, investor, business and M&A consultant, and founder of MergersCorp International, shares the five golden rules of mergers and acquisitions activities based on his more than fifteen-year-long experience in the field: 1) Make sure you define your reasons for selling the business clearly, 2) Carefully review your situations, your terms, and timing, 3) Take your time and pay attention when deciding on pricing and valuation, 4) Examine the necessary documents with a hawk-like eye during the sales process, 5) Make sure you choose the right buyer.
MergersCorp M&A International assists their provides services in 16 more countries, from the United States, to China, Russia, South Korea to Canada, Russia, Australia, and more.