Dealmakers Share Perspective on How Coronavirus Pandemic Is Impacting Their World
The coronavirus pandemic has brought our everyday routines to a grinding halt, including those in the business and dealmaking community. As the markets continue to veer up and down based on the news at that particular moment, Smart Business Dealmakers wanted to get a sense of how those typically on the frontlines of deal activity are reacting to what’s happening. We understand that news is changing by the minute, but given that reality, here is a sampling of what leaders and dealmakers across our readership had to say.
What is your immediate reaction to the coronavirus pandemic from a dealmaking perspective?
Louis Rappaport, partner, co-chair, Corporate, M&A and Securities Practice Group, Blank Rome LLP
“Transactions involving retail and food-related deals are slowing down, awaiting some guidance or visibility as to how long the current operating conditions will persist. To date, in what I have seen, there still remains a fair amount of optimism that businesses that are being most directly impacted by the current conditions (retail, food, travel, etc.) will see daylight again on the other side of the curve. The challenge is managing through this uncertain time. On the other hand, we see transactions kicking off in other industries that should be more immune to the social distancing-induced consumer slowdown currently in process.”
What impact has restricting travel had on deal activity?
Rappaport: “I have a deal with a foreign buyer right now that has negotiated for extended diligence and exclusivity periods in light of global travel restrictions and concerns about getting key diligence items completed. With technology, much of the deal process can occur remotely, but depending on the business involved, site visits and on-site diligence such as environmental inspections may be impacted.”
How does the rest of 2020 look as of right now, understanding that conditions could change completely at any time?
Rappaport: “I think it is too early to tell. With such market upheaval, strong, well-positioned businesses will weather the storm and weaker businesses may struggle to survive. For those who are strong today, I believe there is optimism that once the immediate challenges are navigated, there will be opportunity, including for growth by acquisition. For those that are struggling, they may not get to see the other side of the curve. In terms of deal flow, we remain optimistic that the appetite to do M&A transactions will persist after this short-term disruption.”
“Dealmakers Share Perspective On How Coronavirus Pandemic Is Impacting Their World,” by SBN Staff, was published in Smart Business Dealmakers on March 19, 2020.