Tax Update Blog

Preparing Your Business for Sale

There is never a wrong time to begin preparing for an eventual sale. The preparation stage is key to executing a successful sale process. In fact, value planning can lead to an optimal sale price for your business.

Our team can help you best position your business in the market. Together we’ll develop an action plan to help you make the most of areas of opportunity unique to your business. Our goal is your success.

Learn more about our mergers and acquisitions team.

The Impact of COVID-19 on Mergers and Acquisitions

The US mergers and acquisitions (M&A) market sustained tremendous momentum from the past several years with valuation levels and bank lending near record highs throughout 2019 and heading into 2020. Overall deal activity was highlighted by continued aggressive valuations from both strategic and financial buyers, with ample capital to deploy for pursuing acquisitions.

But disruptions related to COVID-19 led to a quick slowdown in the M&A market near the end of Q1 2020 which continued through Q2 2020, both in terms of overall dollar value and number of transactions closed. Significant uncertainty surrounding COVID-19 caused many financial and strategic buyers to pause existing deals, both to evaluate the cash flow situation within their own operations but also to assess any changes in the performance and financial well-being of acquisition targets.

On the lending side, which impacts M&A because many buyers require financing to complete transactions, banks largely paused in lending activity to analyze their current loan portfolios and renegotiate terms for existing clients. Nonetheless, an estimated 1,270 deals still occurred in Q2 of 2020 in the United States.

During Q3 2020, we began to see buying and bank lending activity resume for M&A as the economy opened, and companies better understand how to conduct business in this current marketplace. Economists continue to closely monitor the risk for new waves of COVID-19 and their potential impact, but for now, buyers are regaining high levels of interest in pursuing acquisitions to increase offerings/capabilities and opportunistically grow market share in this environment. We anticipate 2021 could bring a wave of acquisitions that will raise activity back to pre-COVID levels or even higher.

Why Choose Eide Bailly for Your Mergers and Acquisitions Activity

  • A highly experienced team of accredited professionals, including Certified Merger and Acquisitions Advisors (CM&AAs), Chartered Financial Analysts (CFAs), Accredited Senior Appraisers (ASAs), Certified Valuation Analysts (CVAs), and Accredited Business Valuation Analysts (ABVs) to help determine the value of your business for sale.
  • Trusted business advisors with over 25 years of experience
  • Over 100 deals ranging in size from $10M to $500M.
  • Backed by a Top 20 CPA and business advisory firm with services to holistically help you in all aspects of business.

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Mergers and acquisitions activity can be confusing and it’s hard to understand where to start. We’ll help you take confusion out of what to do next.

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