Recent discussions with German M&A firms show that the number of SME deals have significantly dropped in the last few months. A survey in May showed that 85% got stalled or stopped. Partially because business plans have turned havoc with Corona, partially because price expectations have diverged. Any other reason also works for an explanation.
Yet, prices on average have not changed much. Stock market value is the same as in February. One advisor told me that a buyer has dropped his offer by 30% and the seller still accepted it. Another advisor told me that they have even manged to increase the price for a deal during Corona. While on average it may not have changed much, it has become a lot more polarized. Buyers in sectors such as automotive, travel and catering are paying less for the same EBITDA. Healthcare, agriculture, medical and SAAS businesses seem to have increased in value. Of course, not every automotive supplier has got worse to the same extend. Some have not suffered at all. While the overall sector has lost appeal, it may be worth having a closer look at some of the fallen angels in our listing on opportunities below. Certainly the next months are going to be offering companies at a discount to pre-corona levels.