The Great Recession brought uncertainty and delay to businesses. Many businesses cut back or reduce their acquisition plans significantly, says David Grigsby, founding partner of TBS Falcon and chairman and CEO of Gas It Up, that market disruption. The pandemic, he says, has brought a sea change that’s affected every aspect of businesses.
“None have been left out of the mix,” Grigsby says. “Millions and millions of businesses have shuttered or have cut back their operations significantly as a result of what's happening here.”
What's happening now with the COVID-19 pandemic, Grigsby says is much different than the Great Recession. Buyers now should expect an extended due diligence because there have been tremendous adverse consequences to businesses so far as a result of the pandemic, and it’s uncertain when conditions will improve.
“Sellers will, no doubt, if they're in an M&A transaction, probably want to try to close as quickly on that transaction as they can,” he says. “Buyers, on the other hand, will probably want to extend that timeline and certainly for new transactions that will be the order of the day because you don't have, as you had in 2008, the ability to sit down face-to-face and negotiate the transactions, negotiate the capital aspects of third-party participation.”
Grigsby offered his take on the deal market — how deals for troubled companies might shape up, and who the major M&A players are — in the Smart Business Dealmakers Podcast.
Listen to the podcast