Covid-19 Insights: International M&A, Private Equity, and Deal Structuring (Part 2)

Raj R. Mahale, Partner, KPPB LAW

International M&A, Private Equity, and Deal Structuring

View the initial Insight into this topic (May 14, 2020).

• Status Update: The C-19 outbreak is now causing an even more significant drop off in the amount of international M&A and deal structuring for the foreseeable future. Some of the sectors that are most negatively impacted are real estate, retail, supply chains, travel & logistics, and hospitality. We are seeing a significant opportunity in the healthcare (tele-health, medical devices and life sciences), technology and distressed assets spaces, however. We are also tracking increasing deals by foreign investors that are starting to invest in these sectors as they look to acquire more distressed assets.
• Noteworthy Developments: We are still seeing an uptick in international interest in U.S. distressed assets and potential new funds being formed for these acquisitions as stated above. We are also seeing a major resurgence in SPACS (Special Purpose Acquisition Companies). We are seeing increased litigation between overseas manufacturing companies and U.S. retailers and more and more are seeking bankruptcy protection.
• Important Variables: We are still closely monitoring the various federal government bailout packages for individuals and small businesses. We have hosted several webinars on the various legislative measures impacting individuals and small to medium-sized companies. We are also tracking new bailout legislation in the various sectors offering more financial aid for individuals and families.
• Emerging Players or Themes: We are seeing more and more technology-based companies providing innovative solutions in the healthcare sector, data protection/privacy and data storage, video enabled services, web based educational resources, etc.
• On the Horizon: On May 15, the House passed the Heroes’ Act, the Democrats’ $3 trillion proposal as the next stimulus package. The bill serves as an important marker for Democrats’ key priorities as lawmakers weigh how to address the economic fallout from the COVID-19 pandemic. The legislation, which includes over $900 billion in federal funding for states and cities, as well as another round of stimulus checks and an extension for expanded unemployment insurance, passed the House 208–199 predominately on party lines. The Republican controlled Senate is signaling that it will not approve the current version of the bill.
• Useful Sources: We are also tracking other useful legislation at the state and federal level using COVID-19 tracking sites for federal legislation and state responses.
• Personal Note: I have not been in our NYC office in the last two and a half months. Fortunately the firm is completely cloud-enabled but there are always challenges, especially with technology.