On the topic of“Complexity of company valuation and M&A in Corona times: How is the crisis affecting current deals and purchase prices?” creditshelf AG hosted the last “Finanztalk digital” of the past year for the time being on December 10, 2020. It was particularly pleasing that the event was able to reach a particularly large audience of over 100 participants at the end of the year. This showed one thing above all: the topic is highly relevant and moves the M&A industry.
The focus was on the following questions, particularly in the SME sector: Is now the right time for an external successor? Is the crisis having a negative impact on the potential purchase price? And is it changing the valuation methods that are used? These and other relevant questions were answered in an exciting panel discussion with proven experts. In addition to Marc-Oliver Knobloch as moderator and Stephan Schneider as speaker from creditshelf AG, other speakers included Carsten Häming from CF-MB, Heinrich Mittag from Maturus Finance and Marcel Krieb, CVA from Pretium Associates. The meeting allowed for an interesting discussion, which, in addition to the obvious questions on current multiples, was also able to answer the influence of the current economic downturn on the use of DCF models in medium-sized transactions. Other questions, such as liquidation valuations or the current structures of transaction financing, were also openly discussed.
The main findings on the current situation were as follows:
- The methods of valuation are not changing even during the crisis, although the effects – both positive and negative – are being felt. This is due to the disruptive and trend-accelerating nature of the current situation, which is having a positive impact on some sectors and a negative one on others.
- Even in distressed or even liquidation situations, there are financing models that enable a turnaround or regulated company transfer even in a crisis.
- Earn-out structures are being used more frequently and are more accepted by sellers in the SME sector than before the crisis.
- After a brief shock and the associated rise in interest rates at the beginning of the pandemic, the price level for acquisition financing has largely returned to pre-crisis levels.
The many questions from the auditorium ensured a lively and exciting exchange. This was well received not only by the speakers, but above all by the audience, so that nothing stands in the way of a follow-up event this year. Because one thing is certain: M&A is an important, multi-layered topic in every economic phase and especially now – in an exceptional economic situation – the exchange is extremely valuable for everyone involved!
From Stephan Schneider
