The impacts of COVID-19 on the merger market are going to emerge behind what we're already seeing in the public markets, and the the full negative impact has not even come close to manifesting.
PE shops are hunkering down for the next ~6 months. Their portfolio companies are saddled with debt that they may be unable to pay, and sitting in credit markets with rapidly diminishing investor appetite. Strategics are doing the same thing and still just assessing where they fall on the spectrum of 'screwed' to 'extremely screwed'.
The likelihood of this being the single worst economic period for merger activity is far greater than 0%. I am at a prevalent boutique and just received word my pay is being reduced, candidly I would be surprised if the news gets better soon (within a month) and we're able to avoid lay-offs.
The deals that are going to get done in this period are either post-LOI or the opportunistic types that rarely have advisor involvement.
Outside of the opportunistic or necessity-driven deals where a banker is less likely to be involved (or to add value), why on earth would you buy a company right now? Why on earth would you sell yours?
Why would you buy? - You could pick up divisions of publicly traded companies for pennies on the dollar. Find the publicly traded companies that need cash. Call corp. dev. about divestitures. Offer to close in 30 days and use rep. & warranty insurance. Publicly traded companies are notorious for having orphaned divisions that they will virtually give away because they are viewed as a liability.
Why would you sell? - Imagine you are 65-75 year old business owner. No one knows where the bottom of the market is and your 401k is shitting the bed. You have had a 10+ year bull run. Do you want to sell now, albeit at a lower value, or wait indefinitely (2yrs, 5yrs, more?)? You also wonder if you could even sell your business in the next 12+ months. I think a lot of business owners are still willing to sell due to the fear of the unknown. Fear is a hell of a marketer.
Wow man go crawl under a rock because you seem like a scared little bitch. There are companies that sit on massive piles of cash that will vacuum this market up at ridiculous discounts. Sorry your boutique is fucked but thats what happens when you work with smaller firms. Better luck next time
Incoming analyst coming in hot...