Thirty percent of Ukrainian businesses will sell their assets over the next 6-12 months, according to a recent study.
Although this might appear connected to the COVID-19 pandemic, only 20% of these businesses are planning to sell out because of it, according to research by Ukrainian law firm Avellum, which surveyed 56 companies working in Ukraine.
Thirty-four percent of the surveyed companies have up to 50 employees, 48% have 50-500 employees and 18% have more than 500 staffers.
The study shows that the majority of big companies have “successfully withstood the coronavirus crisis.”
Another 40% of the surveyed companies, meanwhile, are ready to buy new assets at a reduced price, and those who are going to sell are ready to offer big discounts.
“We can expect active discounting of asset prices,” the study reads, “but the prices will go up again later if there is no next crisis.”
However, there’s a risk to buying assets during the crisis, as over 60% of respondents who are selling believe that a seller doesn’t need external advice from lawyers when selling something at a discount.
Mykola Stetsenko, managing partner at Avellum, told the Kyiv Post that, as a rule, businesses are sold at a discount only when they have hidden financial problems, and significantly more companies like that have appeared during the pandemic, especially in the service industry.
This goes against the buyers’ expectations. They want more guarantees insured by the lawyers hired to handle the purchase, who conduct financial and legal audits of the enterprises. In fact, nearly 80% of the responding buyers believe that merger-and-acquisition agreements (M&As) can’t be done without lawyers during the crisis.
Most of these M&As are actually part of the companies’ long-term planning — 60% of potential buyers had planned to buy new assets before the pandemic even started.
“They continue to believe in the attractiveness of the Ukrainian market and see profits in expanding their market share,” the study reads.
