Market Movement: April 2020

Murphy Business remains committed to the health of our employees, clients, and communities. As a result, we are open for business and working remotely, using “Distance Dealmaking,” to help with the containment of the coronavirus. We are a cloud-based, digital business brokerage and M&A firm, by leveraging technology, we remain fully operational and dedicated to business owners across Eastern North Carolina and across the United States.

From pre-listing all the way through to due diligence, we have implemented and using “Distance Dealmaking” for several years now, many of the processes have already been streamlined and are being done electronically – such as performing valuations, using electronic signature systems to execute agreements, using virtual data rooms for due diligence, tele and video conferenceing – but now all of that technology is going to be put to the test like never before, and we are ready.

As far as closing deals remotely, that is also an area we are experienced with. There has been, and likely always will be, a desire for element of “Dealmaking” to be face-to-face. Additionally, in order to conduct complete due diligence, one must be able to go on site and visit the businesses’ facilities. We are committed to facilitating this necessary step while maintaining “Social Distancing”.

The coronavirus effect, our outlook:

By the middle of March, concerns about the impact of the coronavirus on the global economy have plunged the Dow Jones Industrial Average 9,000 points from the previous month, some of which was recovered in the last part of the month. U.S. States are instructing citizens to shelter in place, and the White House has recently signed an emergency stimulus package, the likes of which have never been seen before.

The coronavirus is a game changer; however, I am still optimistic for both main-street acquisitions and the lower tier M&A market in the short term. I would expect significant disruption given market events until we see the number of coronavirus cases peak and we get on the backside of the pandemic, meaning the number of new cases announced each day decreases. Once that happens, I am bullish as there is still a tremendous amount of dry powder that needs to be deployed, record high valuations will likely decrease some (to varying degrees by industry, some resetting of expectations will be required), we will continue to have a very favorable low interest rate environment and access to financing and other certain underlying dynamics which have been driving business acquisitions to this point will continue. Market chaos breeds opportunity.

If you are thinking of selling your business now or in the near future, please call us at 252-337-4888