Beyond COVID-19: Deal considerations in a COVID-19 world

Considerations when quantifying and explaining the impact of COVID-19 to key stakeholders

Companies that made deals during uncertain times may outperform their industry peers

The view that companies should pursue acquisitions in a downturn is contrary to traditional thinking. But it’s shaped by an understanding of what propelled past M&A cycles—the historical relationship between M&A and various economic and financial drivers—and what’s different today.

Never more so is robust diligence required to establish and understand the financials of the target business. Different industries, sectors and geographies will have been impacted in varying ways. 

The importance of robust due diligence is critical when navigating financial reporting complexities arising from COVID-19

How companies quantify and explain the impact of COVID-19 to key stakeholders is important

Factors to pay attention to when approaching deals in the COVID-19 world

 

When normalising earnings for COVID-19 related items, adjustments need to be supported

Current trading trends is critical to assess a range of potential future performance scenarios

It is likely that companies may have taken on an increased debt burden to manage short term liquidity issues

COVID-19 is likely to have a significant impact (temporary or permanent) on net working capital and cash flows

Expect a general shift in mechanisms and SPA terms that reflect a Buyers’ market

The impact from any subsequent waves may look different than from the first

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Ong Tiong Hooi

Partner, Deals Services, PwC Vietnam

Tel: +8493 869 9691

Trinh Thanh Loan

Director, Transaction Services, PwC Vietnam

Tel: +8498 604 9292

Le Minh Tuan

Director, Transaction Services, PwC Vietnam

Tel: +8490 977 2724

Nguyen Dinh Phat

Director, Transaction Services, PwC Vietnam

Tel: +8490 873 7574

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