The COVID-19 pandemic taught us quite a few lessons for keeping a business surviving and thriving in unchartered territories. Now is the time to be forward-thinking. There are ways that you, as a business owner, can utilize mergers and acquisitions (M&A) as an effective strategy to accelerate your company’s recovery from the lingering impacts of the pandemic from both a defensive and offensive perspective.

OFFENSE:

Accelerate Your Business Model

Inorganic Growth
Emerging from a pandemic is not the time for organic growth strategies for most businesses. This is especially true for sectors that have experienced irreparable impacts, such as retail, hospitality, tourism, and live entertainment. However, M&A can accelerate growth within a business model is otherwise not feasible or accessible ways. Whether it’s accessing new supply chains or acquiring a competitor’s talent, M&A is an effective tool that can open up several possibilities for growth and success.

Disruptive M&A
Technology and innovation have become more imperative than ever because of the need for rapid digitalization during the pandemic. When remote working and online conferencing became the norm, disruptive tech was put on an epic fast track. Everyone wants what is hot, and they want it ASAP. Otherwise, they risk falling behind the competition. As a result, these technologies offer significant M&A opportunities for companies in many sectors, such as cloud computing and artificial intelligence.

Boosting Supply Chains
Supply chains have taken a significant hit due to the pandemic, with some sectors experiencing worse disruptions than others (such as automotive, energy, and manufacturing). As a result, these sectors are being forced to reboot and find ways to alter their supply chains to get what they need. This is where M&A can be a real game-changer, helping companies gain access to alternative supply chains and keeping operations on track.

Alliances and Joint Ventures
Because of the pandemic, consumer behaviors and spending patterns have changed. Welcome to the new normal. This means that businesses will need to look to new strategic alliances to be more agile in catering to new customer habits, and M&A can help make these joint ventures a reality.

DEFENSE:

Protect Your Future

Integration and Value Creation
Now more than ever, many companies need to cut costs, free up working capital, and do it quickly. M&A is one of the more timely ways to make this happen. Also, planning on ways to create value today can protect your business in the future. By turning to M&A, you can both integrate and develop.

Divestitures and Separations
As economic pressures persist, many businesses need to divest non-essential assets. At the same time, they may also need to unload any highly sought-after assets for financial reasons. There are also opportunities due to sustainable investing becoming much more popular. In addition, environmental, social, and governance (ESG) initiatives lead to rebalancing portfolios, which could mean actionable assets for divestiture. In any case, sellers should enlist professional M&A advisement to ensure that they avoid getting into asset fire sales. Learn more about the value of hiring an M&A advisor here.

End-to-End Distressed M&A
2021 was a record year for M&A, and a great deal of opportunity still exists. Many types of investors, including private equity, activist, and corporate investors, have strong balance sheets. They are sitting on plenty of cash and are in the position to move quickly on acquisitions of distressed businesses.

Let’s Get Started
If you think M&A strategies could benefit your company, our experts at Benchmark International would love to hear from you so that we can discuss your options and help you make the most of your success.

First off, I’m using the term “post-covid” gingerly, since, as I am writing this article, we are going through a surge of the Omicron variant. This article is intended to shed light on deal structures that we saw in 2021 and compare them to pre-covid years, as well as surmise future structures.