How Covid-19 is shaping the future of corporate transactions

As with the rest of the UK on March 23 last year the brakes were put on the corporate world, with many deals immediately being put on hold while we waited to see what the new way of life looked like.

At Forbes the corporate team noticed a dip in work during March and April whilst everyone got used to the “new normal” of business at home. However, a lot of businesses soon realised that they could not sit this out and wait. Since then things have started moving again and we have not seen the same pause on transactions during this latest lockdown.

While the pandemic has forced a new way of remote working on us, removing the geographical restraints which a lot of firms were historically subject to and opening up a new client base, it has also meant that we have had to adapt and consider the specific effects of Covid-19 as part of M&A transactions.

Buyers now need to be investigating the short and long term effects of Covid-19 as part of their due diligence. And they need to be considering the associated risks, on top of the usual “pre-Covid” enquiries and requesting appropriate warranties and indemnities. The new risks are also impacting things such as funding, with lenders having a stricter approach including additional security requirements.

Practically, remote working has had its own hurdles. We have experienced some significant delays from third parties whilst they try to adapt which has had a knock-on effect on transactions. Whether it is collating information to disclose, dealing with third parties in relation to funding, formalities surrounding completion and post-completion filings, additional time should be factored into deals.

However, we are finding that clients are embracing the new way of working and expect it is here to stay, with remote working making deals much more streamlined and efficient in the long term.

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