Crisis brings opportunity

Tomorrow’s competitive landscape is being shaped today

Like so many business activities, dealmaking is facing its share of pandemic-related challenges. But that’s not every dealmaker’s reality.

We just wrapped up three major dealmaking conferences in three markets — Detroit, Cleveland and Columbus. Our panels and audience were packed with expert professionals and experienced buyers and sellers. And while they certainly attested to the difficulties facing M&A at the moment, the stories they shared made it clear that regardless of market conditions, people find a way to achieve their goals.

One of the clearest messages from the conferences was that deals are still getting done. Sure, diligence might look different — done via teleconference rather than in person — but digital diligence created efficiencies and saved time and money on travel. Now, calendars are filled with Zoom meetings to talk with prospects and negotiate deals. And, if a meeting falls through, no one is stuck wasting time waiting for a return flight. Dealmakers have taken a perceived loss and transformed it into gains in efficiency.

COVID’s gut-punch to companies has been felt in their bottom lines. Revenues have shrunk as customer spending evaporated, and supply chains have been shaken. But what the dealmaking professionals at our conferences consistently pointed out was how important management has been in guiding companies at a time like this. Rather than focusing solely on the numbers, buyers want to see how owners and operators have responded to the crisis and how they’ve kept their companies going despite the unprecedented challenges.

Dealmakers, owners and operators have all shown that while the M&A category has dimmed, there are bright spots. Some companies — for example, Merry Korn’s Pearl Interactive Network — have gotten significant new business because of how the virus has impacted the market. Other companies that have retrenched and stabilized their business are seeing opportunities to capture market share in areas where competitors have fallen off. And some industries, largely by the luck of their nature, are doing extremely well in this environment — health care and technology companies, for instance, are making a lot of money. That’s translating to higher valuations, putting their owners in a position for a big payday.

As it was said multiple times and across cities at each of our Dealmakers conferences, crisis brings opportunity. Now is a time when strong leadership, quick thinking and a willingness to take risks can translate to big successes, not just now, but in the future. Tomorrow’s competitive landscape is being shaped today.

Fred Koury is president and CEO of Smart Business Network Inc.