You were making the necessary preparations to sell your company. What am I going to do now? 

Initially, of course, it depends on the motives why you were considering selling your business. If the reason is force majeure (eg illness, death), there is often little alternative than to continue with the sales process.

If the trigger is not family succession, age of pension, the will for change, … it might be useful to put the takeover on hold, however in some case quite the opposite.

The main consideration is: “Has my business been affected by the corona crisis?”

IIf your business has been affected for a maximum of one quarter, you can continue the takeover process in case you can determine that the business is actually recovering (meaning: back to the same level as before the crisis). You may also consider postponing the sales process until 2021.

IIf business has been subject to the crisis for more than one quarter, the sales process should be stopped. Rather focus on making your business resilient and once the figures are “back on track”, the sales process can resume.

If the business continues to run well. The figures remain stable or even show growth, you feature all indications to pursue the takeover. There are probably fewer takeover opportunities on the market and it could be that your company gets more attention. By demonstrating that your company persists even in times of crisis, it is possible that you can negotiate a good purchase price. We must not forget that there is still a lot of money in the market that is looking for investment opportunities.

 

But will there not be a major impact on acquisition prices?

The time span is currently too short to estimate this correctly. In most cases, inquiries are based on “expectations”.

A short poll organized by the Vlerick Business School during the presentation of the M&A Monitor 2020 indicates that 86% of the respondents (actors in the Belgian takeover market) expect prices to fall. 42% of the poll participants expect a drop between 10 and 20%. 

Within a few months it will be possible to determine whether this is actually the case. But if your company emerged from the crisis unscathed or even shows growth figures, it is certainly not excluded that the impact on the price will be nil. On the contrary…