The current coronavirus crisis is having a significant impact on the M market. This is also reflected in the transactions for the second and third quarters of 2020. A significant decline can be seen – this also affects German SMEs. Some medium-sized companies have already decided to postpone their own company succession / sale until 2021 – but then be optimally prepared and with a very high process speed.

After the dip from mid-March, we are seeing a significant upswing in the M market again. This includes not only restructuring cases, but also healthy and very profitable companies. These outstanding companies can also be sold in the current challenging situation. The industries that are not only affected by the coronavirus crisis in the long term, including automotive suppliers and mechanical engineering, will have to adjust to a different world. There will be significant structural changes here. It is important to act quickly and decisively, otherwise you will be out of the picture in the long term.

Companies that are experiencing significant declines in sales and earnings due to the coronavirus crisis and are therefore feeling a significant impact on the transaction value must prepare much better if they intend to sell. If the monetary prospects brighten again at the beginning of 2021, it will also be possible to achieve a suitable transaction value. However, companies that are already under a high degree of pressure should turn to professionals for whom speed is not a foreign word. In particular, advisors experienced in distressed M know this pressure situation and can quickly achieve results.

Entrepreneurs who want to regulate their own company succession in 2021 should already be actively preparing. Review your 3-5 MA advisors and make a decision. Collect and prepare all relevant documents (annual financial statements, management accounts, business plan, etc.) – the commissioned MA consultancy will also be able to take a lot of work off your hands here. Have you already thought about how and when you want to communicate with your employees? What does your business plan look like in detail? What is your purchase price expectation and is this demonstrably justifiable (DCF company valuation / EBIT multiplier valuation)?

The better you use the time now, the more quality your preparation for the company sale will have in cooperation with the management consultant. Because selling your own company takes time!

Do you have any questions or need support on the topics of MA / company succession? We can be reached on 02150 7058 210, by e-mail at office@starkpartners.de or on the web at www.starkpartners.de.

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