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The COVID-19 Valuation Conundrum -The Risks of Inaction



By now most of us have seen this picture countless times on LinkedIn and in other media. It is probably destined to become a symbol of this moment in time. It says it all. EBITDAC, takes the ubiquitous term that drives so many discussions of value and adds the unknown coronavirus impact “C”.

First, “C” is not always a negative.


A national poll of businesses last week found that 32 percent report no change or an increase in sales vs. last year. Yes, many are not so fortunate. As you might expect, there is a large variance by industry sector. Regardless of whether “C” is a plus or a minus, it must be factored into value. Buyers and investors still hold large amounts of capital and many continue to want to deploy it. We reached out last week to some of these active buyers and investors to get their take on the “C” factor. Whether these buyers and investors are interested in making acquisitions, equity investments or loans, there is one common denominator they all want to see now more than ever: forward visibility.


When seeking capital, it is important to update your projections and link pre “C” performance to post “C” performance. Look at various timelines and run multiple scenarios to show performance until post “C” and thereafter. Be prepared to speak to demand drivers, customer needs, durability and concentrations, supply chain vulnerabilities, delivery times, employee productivity and other key factors relevant to your performance. Your ability to articulate and defend forward visibility will greatly improve your chances of success. If you are seeking a buyer, equity investor or lender, remember, there are active sources in the market.


If your needs are urgent and may not be fully met by government programs or your bank, a private capital source may be able to help. It is wise to explore multiple sources simultaneously. Applications and negotiations take time. Private capital sources each have a unique focus and criteria. Bringing multiple sources into play will likely increase options and generate negotiating leverage. Inaction or relying on a single option can lead to disappointment or worse. 



Blackrock is capable of providing assistance along the entire spectrum Internationally. We have a number of partner firms within Fundraising and advisory services with 30 offices throughout Europe, the Americas and Asia all with broad expertise in a number of industry verticals.

Please get in touch if you think we might be able to help you.

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