Successful deal execution hinges on robust diligence

The COVID-19 pandemic brought economies around the world to a halt. Continuing efforts to combat the various waves of the pandemic have resulted in disruptions in business operations with drastically reduced revenue and cash flows, and profitability in many cases wiped out.

It is an uncertain time for buyers and sellers in the world of Mergers and Acquisitions (M&A) with both being forced to rethink new and immediate deal issues in light of COVID-19, as well as the long-term recovery to whatever ‘normal’ may ensue.

All of the usual metrics buyers use to value a company – market landscapes, macroeconomic factors, growth drivers, projected cash flows, etc., are becoming unreliable and out of date.

The extent of the impact has been felt in varying degrees across different industries. This paper aims to highlight key focus areas and the importance of robust diligence in understanding target businesses in the COVID-19 world.

 

In the publication:

  • Why Differentiated Diligence is of utmost importance in doing a Deal during COVID-19
  • Understanding the ‘New normal’ key business drivers is key in assessing underlying, sustainable performance
  • New-normal changes should be reflected in working capital level and funding requirements
  • Understanding risks arisen from tax and legal perspective will be crucial
  • Ongoing COVID uncertainty can give rise to a more robust SPA terms that Buyers seek as protection

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