Pandemic forces investment holding companies to mull selling businesses

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M&A prospects are attractive for firms in the R50m-R1bn turnover range, as that market is recovering

Many companies, large and small, may not survive the economic crisis. Some may need to sell off their “crown jewels”.

Being in this M&A niche reminds me of why I left the corporate sector — it imposes a myriad of non-negotiable requirements on the management who themselves no longer have any equity in the business. They are beholden to an investment company that in many instances adds no value to the underlying business.

While this is worse now than usual, the condition can exist at any time. An alternative we introduce to the scenario for the benefit of all parties is: would the holding company not be better off realising the capital of its prized investment, thereby unshackling the underlying management team?In a valuable IP business it is the management team that holds power even when wholly owned by a third party.

Sometimes the approach comes from the management of the holding company, who are themselves aware of the quantitative benefits.

 

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What does a postpandemic world look like for investors and business?Companies have to come to grips with new ways of conducting business amid investment and societal changes Some organizations I know have cancelled office space rental agreements as employees has been working from home for over a year now. So yes the real estate looks like will be hit hard more than other business sectors.
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What does a postpandemic world look like for investors and business?Companies have to come to grips with new ways of conducting business amid investment and societal changes
La source: BDliveSA - 🏆 12. / 63 Lire la suite »