Bob Bartell, Global Head of Corporate Finance, was recently interviewed by International Financial Law Review on the impacts of Coronavirus on M&A.
"This situation is hitting people in the process of an M&A deal hard, especially sellers – 99.9% are definitely waiting until there is more clarity” said Bob. He continued that delays have already happened, regardless of whether there is a clock ticking on exclusivity. "Given the lack of travel and the lender community pause, there is really not much M&A happening. I would be shocked to read about a public company merger at the moment, unless it was a particularly weak asset."
Bob stated that companies may begin considering deal terms such as earnouts in light of the current situation. He further explained, "Previously, buyers proposing an earnout were usually discounted or disqualified. Now this will be seen as a creative tool used to bridge a gap between what is fair value and what is an asset. People will have to dust off their files."
Subscribers can access the full article on International Financial Law Review.
