Every business is feeling the blows of corona. Where some companies see their sales shrivel up, those of others pop into the sky. So it makes sense that the crisis is having an effect on the acquisition market. 

We go back in time for a moment eight weeks. It's mid-February, it's business as usual. The economy is sunny, unchanged. There is a growing problem in China, though, where production is stalled due to the outbreak of an unknown disease, now known as covid-19. 

Vendor Market

In Europe, everything goes on. Takeovers are in full swing, buyers are lining up for well-run businesses. Sellers have them to choose from, the price can be driven up and terms are mostly in the seller's favor. It is a seller's market. 

However, the rebounding economy also offers advantages for buyers: borrowing from the bank is easy and investors are willing to invest in promising projects.

Europe gets hit

But then it becomes March. Markets are reacting to developments of the virus that has now reached Europe. Italy is having major problems getting it under control. And other European countries are also reporting their first infections. Every day it seems to get worse.

That corona is having an effect on the economy is obvious. The markets are collapsing. There is great uncertainty and no one sees any light at the end of the tunnel. 

Effect corona of on mergers and acquisitions

This obviously has a major impact on mergers and acquisitions. Negotiations are put on hold and the number of potential buyers is down to virtually zero.

In negotiations that do continue, the buyer haggles heavily over the price. We see many examples of this in practice. A buyer demanding a discount of 60 percent compared to before the corona crisis is no exception.

But are there any positives that seem to come out of this unprecedented crisis? There are. Where previously there was more demand than supply, the wind has now turned. It's a buyer's market. That also presents opportunities, reports Business Insider.

1. The investor goes home with the profits

Those with money can sow well in advance now to reap later. Companies will have the greatest difficulty finding buyers or investors in the coming months. In addition, the crisis is depressing acquisition prices. 

Those who invest now can get great returns for little money. After all, it can be predicted that the economy will mainly grow from now on, even if slowly and dosed. 

2. Better conditions

Because there are fewer hijackers on the coast, the buyer gets more control. Think lower price and better terms.

3. Unique businesses on sale

Many bankruptcies are expected to be filed in the coming year. And maybe also that one business or property you have had your eye on for a long time. Such opportunities may only happen once. Take advantage of them.

4. Management buy-ins 

Buying yourself into a company is getting a lot easier. Where it was difficult for many candidates because of the high prices, the chances of success will now be a lot higher. Moreover, banks are still willing to finance. 

5. Unexpected winners

Corona also produced unexpected winners. Where tech companies grew faster than before, there are also companies that are suddenly making much higher profits than usual. Think of online stores (hobby, supermarkets, hardware stores), medical device manufacturers and companies with telecommuting solutions.

These companies will start to benefit from the changed market during and after the crisis.

Getting started now?

In short: the world of mergers and acquisitions is also upside down. But there are also opportunities. For example, do you want to invest? The advisors of Bedrijfsovernamehulp have a wide network in the Apeldoorn, Zwolle and Deventer region.  

We can also support sellers. Are you, for example, stuck in negotiations? Then we'll get on board and help you get the best out of the sale after all.

Contact us with no obligation. The first telephone consultation is free of charge.