DISTRESSED M&A IN UKRAINE: BUYING OUTPACES SELLING

AVELLUM researched how the coronavirus outbreak affected the plans of businesses to purchase or sell assets or companies in the next 6 to 12 months. We conducted the survey among owners, top managers, and heads of legal departments of Ukrainian and international companies in June 2020.

Key findings from the report:

• Almost 30% of companies plan to sell their business in the next 6 to 12 months. Only 1 out of 5 companies plan to do so because of the crisis.
• More than 60% of the companies for sale prepared to offer a price discount. The majority of buyers expect a discount since weak businesses will be primarily on sale.
• There are quite a few potential buyers – 50%, and their number significantly exceeds supply. It may eventually cause an increase in the price of a target.
• Over 60% of potential buyers have not changed their intentions to purchase assets in Ukraine due to the coronavirus crisis. They continue to view the Ukrainian market as an attractive one and believe that it would be profitable to increase their market share.
• Over 60% of respondents believe that the seller in a distressed M&A deal should provide full warranties to the buyer to cover the asset.
• Over 74% are confident that the due diligence of the target is necessary for a distressed M&A deal. We believe that such expectations will change soon following the increased competition for attractive companies that are sold at a discount.
• Almost 80% believe that an external advisor should be engaged in a distressed M&A deal by the buyer or by both parties.

Please SEE FULL REPORT for more information and findings. 

The conclusions are based on analysis of the answers of the respondents and AVELLUM’s extensive M&A expertise in various sectors of the Ukrainian economy during 11 years of AVELLUM’s presence in the market, in particular during the previous economic crises.

Please feel free to contact our partners, Mykola Stetsenko and Yuriy Nechayev, our counsel Andriy Romanchuk, or send an e-mail to info@avellum.com to share fеedback or ask questions.