Business-Minded Legal Solutions

Creatively managing business acquisitions during a pandemic

Owners and CEOs involved in buying and selling companies have had to learn new strategies during the COVID-19 pandemic compared to how they have done business for years.

At least temporarily, all but gone is the freedom to fly across the country and the globe to meet in person to discuss mergers and acquisitions or share business strategies.

The advent of “Zoom courtships”

The CEOs of two large marketing firms, Dave Mering, who founded his own California agency, and Rick Milenthal, who runs The Shipyard in Ohio, would often travel at the drop of a hat to catch up on recent trends or strategize.

COVID changed all that. So, the two started with a video call last spring, and by summer, they had logged hours upon hours discussing the futures of their respective businesses. Eventually, those Zoom meetings resulted in Milenthal’s parent company, TSY Enterprises, buying Mering’s firm.

Once the offer was on the table, the two looped in executives and organized virtual calls for managers and department heads. With innovation and patience, the companies largely avoided what had always been a costly and time-consuming process. That was important in a year of travel restrictions, work-from-home orders and scaled-back budgets and revenue. The deal was announced in December.

It is not all about the Zoom for some

Even before the pandemic began, many large businesses exploring new opportunities were successfully conducting much of their due diligence online, including sharing financial information. Still, others were only comfortable completing a deal through face-to-face negotiations.

When COVID-19 hit the globe, U.S.-based web and mobile agency Basic was already in acquisition talks with Europe’s largest digital company, Dept. But, travel restrictions and other safety protocols slowed down the process.

Later in the summer, the companies rented a mansion in Ireland where executives from both companies could meet for several days without dealing with a mandatory 14-day quarantine. All parties took COVID tests before leaving in August, and put social distancing rules in place.

With spotty internet coverage, the groups ended up taking hikes, sharing meals and other social events resulting in a friendly atmosphere for discussing a potential merger. One of the participants described it as the “craziest date ever.”

While many expect to return to some of the old-fashioned practices, they believe the lessons they have learned from the pandemic will be part of a new playbook. Namely, that most of the work can be done through Zoom and other technology, with a more personalized approach to close the deal.