Property360Digest E-MAGAZINE Property360Digest Issue 9 | Page 51

Property360Digest e-magazine Issue # 9 - 2021
“ Despite the ongoing pandemic , lately we ’ ve seen a slight increase in bigger companies acquiring smaller companies especially within the same industry sector and this is predominant in joint ventures and acquisition of shares as part of M & A transactions . It is not uncommon for business owners to sell equity in their company , either in part or in whole , in return for investments during this difficult time . It is also a time when bigger companies may take advantage of the opportunity to acquire smaller companies for a lower purchase price .” - Raymond Mah , Managing Partner of MahWengKwai & Associates .
In an increasingly competitive and financially constrained environment like we are in now , corporate leadership must identify and pursue growth opportunities that will strengthen their organizations ’ market position and financial performance . Growth strategies that include developing new service lines or markets , expanding existing service offerings and markets served , entering into joint ventures to develop or expand services / markets , are outweighed by the advantages of merging with or acquiring existing operations from competitors , or other providers .
Acquisitions can quickly and dramatically shift an organization ’ s position by improving accessibility to clients in new attractive markets as well as enhancing access in existing markets , fundamentally changing the market position by moving the organization from a subordinate position to a more dominant position , creating barriers that preclude the competitive entry into a market , facilitating reorganized service distribution and operations to significantly reduce the cost of delivering services as well as providing operational capacity for services at a lower cost in a better timeframe than would be required to create such capacity without an acquisition or merger .
Many organisations have also reported that an M & A move has enhanced their organization ’ s financial performance and credit rating , thereby improving access to capital and lowering the cost of capital .
To comprehend these strategic and financial benefits , businesses will need to assess their current ability to pursue M & As , and commit the time and resources needed to develop such capabilities , if currently limited or absent . Hence , connecting with legal experts who specialize in Merger & Acquisition deals would be a smart move for businesses , regardless of small or big , to secure a brighter and more sustainable future post-Covid-19 .