A Message from Robert Hild, ACT’s CEO, Concerning Covid-19 and the Outlook for M&A

Dear Colleagues and Clients:

The last several weeks have been anxiety-producing for families, businesses, and communities as we grapple with the impact of the COVID-19 novel coronavirus. We want to tell you what ACT Capital Advisors is doing to mitigate the outbreak’s effects on our team members, clients, and community; and provide our current outlook on the economy in general and on the M&A market in particular.

First, like many other businesses we have implemented aggressive social distancing policies firm-wide. While our offices remain open, team members have been encouraged to work from home where possible. Those who need to come into the office have been instructed to follow current CDC guidelines with respect to social distancing, minimizing physical contact, and hygiene practices. Our paramount concern is the health of our team members and their families, our clients, and our communities. Fortunately, we already frequently use video conferencing and other technology to communicate with clients and deal teams – so the impact on our day-to-day ability to service clients is minimal.

Second, we are continuously communicating about the impact of this evolving situation on our clients and prospective clients. Our deal teams around the country are sharing information in real time about policy changes, regional and industry-specific impacts, and emerging issues to ensure that we can provide you up-to-date assessments of the M&A market. We are working as an integrated team to give you the visibility you need to make very best decisions possible and to keep your deals on track.

This is an unprecedented time; but there are some bright spots on the horizon. Although COVID-19 and the public health response has injected uncertainty in the financial markets and may inflict short-term financial damage, overall economic fundamentals are strong. Levels of “dry powder” at private equity firms are at an all-time high, corporate balance sheets remain healthy, and recent moves by the Federal Reserve have only increased the amount of low-cost cash available for acquisitions. No doubt, there will be some short-term slowing in the economy as businesses are impacted by policy and behavioral restrictions. But once those restrictions lessen, we expect that economic growth will resume and M&A market activity – spurred by increased cash availability – will continue to be strong.

For those who may be considering a sale of their business, we offer a few thoughts: First, it is never too early to begin preparing for a sale. Even if you are currently experiencing a drop off in business performance, it is likely that by the time you are ready to sell, normal economic activity will have resumed. The timeline to complete a typical M&A transaction is 6 – 12 months, well beyond the window of uncertainty we are currently in. Second, it is a great time to begin developing the story you want to tell. How did you respond to this crisis? What did you do to insulate yourself against future downturns? How have you ensured your employees, customers, and suppliers remained committed to help you drive your business in the future?

Our team at ACT Capital Advisors brings decades of experience and insight to help you navigate this period of uncertainty, tell an authentic and compelling story, and build toward an optimal outcome. We want you to know that you are important to us, and we are working hard to keep your goals and objectives on track. We are confident that our clients, team members, and ACT will weather this unique storm successfully and together.

Sincerely,

Robert L. Hild

Chief Executive Officer

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