Dealmakers expect their organizations to change their business strategy, including cost reductions in the near term and possible layoffs in the next 12 months, as they prepare for a lengthy downturn, according to survey results from a Datasite Advisory Community poll of global M&A professionals. The Datasite Advisory Community is part of Datasite®, formerly known as Merrill Corporation, the leading SaaS technology provider for the mergers and acquisitions (M&A) industry.
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According to the poll, which included over 100 respondents across the Americas and Europe, the Middle East and Africa (EMEA), dealmakers, on average, rated the intensity of the economic downturn as an eight on a scale from one to 10 with 10 being the worst, with 87% seeing the decline as a seven or higher. Fifty-nine percent said they expect the drop to last longer than seven months. Additionally, 80% of respondents said that the global economic decline is already causing, or likely to cause, significant adjustments to their company’s strategy in the near future, with more than 55% expecting to switch from a strategy of growth to a strategy of maintenance or restructuring.
“In the immediate term, organizations are focused on remote operating resilience and ensuring they have enough liquidity,” said Rusty Wiley, CEO of Datasite. “Right now, when examining data from our platform, we are seeing more companies move to a deal-ready state, in preparation for post COVID-19 activity. In addition, we are also seeing an increase in fundraising, restructuring and distressed asset sales.”
Additional survey findings reveal that dealmakers expect their organizations to take up several financial activities in the next six months to conserve cash. The top actions respondents said their organizations are taking or planned to take in the next six months included travel restrictions or bans (88%), followed by cost reductions (85%), hiring freezes (72%), and delaying new capital purchases (44%). Over the next 12 months, respondents cited employee layoffs or furloughs as a top option at 45%, followed by distressed asset purchases (39%), and delaying new capital purchases (31%).
Results show that dealmakers are also overwhelmingly (97%) working from home and are utilizing video conferencing and email as the primary tools to help them complete their work. Still, they are facing challenges. About 50% are uncertain how remote work will impact their client-advisor relationships, while 50% are equally concerned about a loss of productivity and collaboration.
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Datasite, formerly known as Merrill Corporation, is a leading SaaS provider for the M&A industry, empowering dealmakers around the world with the tools they need to succeed across the entire deal lifecycle. For more information, visit www.datasite.com
About the Datasite Advisory Community
The Datasite Advisory Community is a research panel and community designed to identify the issues, trends, and technology needs of today’s capital markets professional across investment banking, private equity, venture capital, corporate development and affiliated advisors. For more information, visit https://datasite.questionpro.com