It’s been a funny year or so, especially in business. There aren’t many who can say their business hasn’t been impacted in some way or other. Either you were one of those essential services everyone suddenly needed, or you were catastrophically impacted through loss of business.
Most of us can safely say we operate in a new way now. The same is true when businesses are looking to merge, or acquire another business.
This year has brought post-pandemic trends lots of us won’t have seen coming. Perhaps you’ve incorporated them without knowing it, or maybe you need to, but you are unaware of the new way of doing things.
We can help. In this article, we’ll discuss what mergers and acquisitions look like after COVID-19.
M&A is on the increase
The main trend in mergers and acquisitions (M&A) is the frequency of mergers and acquisitions generally.
Things were so uncertain when the pandemic began, there was a massive drop in the number of mergers and acquisitions taking place. Now that things are stabilising, we’re seeing an upwards trend. More businesses than ever are considering how mergers can strengthen their companies and give their revenue a boost, and those who made money in the pandemic are considering acquisition as a good way to expand their reach and increase market share.
If you’re considering either, now is a good time to look into it. More businesses than ever are considering their position.
Customer centric changes
The pandemic made it clearer than ever how important customers are, and many businesses considering M&A are doing so in a way that will increase their capacity to give good customer service.
The pandemic left businesses both negatively and positively impacted with a desire to thrive, and the best way to thrive is to deliver customer focused service.
If you’re considering a merger or acquisition, you should only do it if your change will improve the service your customers receive.
Digital capabilities
The emergence of digital and our reliance on it was accelerated during the pandemic. Post-pandemic merger and acquisition trends are focused around digital capabilities, and how companies can improve the way they provide their services in a digital way. This is especially true for online retailers.
Lots of small and medium businesses who previously had locations found themselves with no option except to sell their services online during the COVID-19 pandemic, and many of them are now considering how they’re moving forward. Online servicing usually means less overheads and labour, and not having a premises means there are savings to be made on premises and utility bills.
So it isn’t surprising that mergers and acquisitions that offer an increase in digital capacity are extremely attractive right now.
Technology
Almost two-thirds of companies are reporting a planned increase in investment in technology and digital capabilities in the next few years. Almost half of those are considering doing that by acquiring another company, mainly tech-enabled competitor companies to help them enhance their own digital capabilities.
Buying abroad
The challenging global and geopolitical environment we’re facing means many companies are looking to expand their reach and services by merging with companies overseas. This isn’t easy, but it is sensible. We’ve had a terrible time as a global community, but most of us are aware that some countries are closer to coming out of this than others.
Investing somewhere already well on their way to economic growth is a sensible idea.
Investing in the planet
Existing global issues and trends have not evaporated, and many companies know that investing in merging with or acquiring a business that puts the environment close to the centre of its activities is a wise move. Sustainability is the future, and it is important you consider it in your strategy now, especially if you are thinking of growth.
Where are we now?
It’s already started. The second half of 2020 was the highest period on record for M&A. Anticipating a change in the way of the world – and thus the marketplace – many businesses got in early and started their mergers in advance. We understand not everyone was in a position to do this, but those who were mostly did.
If you’re looking to merge with or acquire another company, our advice would be not to wait. But be careful. Things are still a little unstable, and you don’t want to make the wrong decision, particularly if you’ve already seen a loss of profit because of the pandemic.
Yorkshire Change can help. Our dedicated team can advise you every step of the way, to make this major change in your business as smooth as it possibly can be.