Is now, during the Covid-19 pandemic, the time to acquire? With many potential targets struggling and no clear end to the pandemic in site, buyers may instinctively shy away from acquisitions they otherwise would have pursued prior to the pandemic. A May 17, 2020 article published in the Harvard Business Review, “The Case for M & A in a Downturn” offers evidence that companies that acquire targets in a downturn outperform their competitors. The article includes statistics showing that, during the great recession of 2007-2009, while the number of mergers and deal values dipped, those companies which were active acquirers outperformed their rivals that were not. Of course, at any time, there must be convincing reasons to acquire a company, such as synergies, cultural fit and new market opportunities. However, perhaps Warren Buffet’s famous quote about investing -“be fearful when others are greedy, and greedy when others are fearful” is now apt in the M&A market.
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Glenn D. Solomon is a principal at Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years. He has extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress.
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