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Another COVID-19 Surprise A New Seller’s Market

Another COVID-19 Surprise A New Seller’s Market

“Energy and persistence conquer all things.” – Benjamin Franklin
The devastating Coronavirus Pandemic has precipitated an economic decline and slowed M&A transactions. While pundits compare the recent 2020 Coronavirus 2007-2008 Great Recession of 2007-2008, they are dissimilar.

The differences are important in a current business sale.

The Great Recession was a financial crisis that caused a near collapse of our banking system. When banks fail, the economy is not far behind. Before our economy shut down earlier this year, the USA was the envy of the globe, a shining star leading with economic growth, record low unemployment, and high private business valuations.

M&A deal activity was aggressive at the beginning of the crisis. Then our World changed. With the initial shutdown starting in March 2020, M&A transactions slowed to a crawl. That crawl has changed to a stampede.

Capital drives the world.
According to The Wall Street Journal in July, Private Equity Groups have $1.5 TRILLION in available capital for acquisitions. The Janas Team receives daily emails, newsletters, phone calls, and texts from well-funded buyers eager to compete for acquisitions.

So, what does this mean to you, the business owner?
Many Exit Strategy Plans are on hold in 2020. Owners whose businesses performed during the pandemic can attract upwards valuations. Companies that remained profitable, but profitability declined are also targets. Buyers are lined up to make competing offers.

Our point is simple. Despite the pandemic, an unprecedented abundance of investment capital is seeking to acquire your business. The time has come to Exit.

Next step? Give Janas a call.
To understand your alternatives, check your calendar, and we will set up a ZOOM call or phone chat.
We can tell you in minutes exactly what we see and hear.

Becoming Cash Rich In The Pandemic Age

Becoming Cash Rich In The Pandemic Age

Today’s markets have some of the same uncertainties as in the Great Recession of 2008-2009. The Great Recession:

  • Huge real estate bubble
  • Noncollectable mortgage paper that wasn’t going to cure itself
  • Precipitous economic decline

The current pandemic, though massively disruptive, is more transitory. Covid-19 will pass and the economy will get well. In the meantime, the United States Congress is progressing toward a $2.0 trillion Economic Stimulus Package. According to many economists, there will be a boom period to follow.

Businesses that are designated as essential services will be least affected including:

  • Logistics & Storage
  • Medical – Services and Products
  • Aerospace & Defense
  • Food and Agriculture
  • Government Services
  • Financial Services
  • Chemical, Energy, Public Works etc.

These companies may experience stronger demand for their products and services.

During 2019, Private Equity Groups raised record levels of capital that now needs to be invested. The coronavirus has significantly decreased acquisition closings. For operating companies:

Valuations are high with huge acquisition demand and dwindling supply.

At Janas, we are encouraging Companies and their Trusted Advisors to explore with us preparation to enter the market within the next 60-90 days. Our intent is for our clients to benefit from an ebullient market that is sure to follow the decline of Covid-19.