Our BTF NOW | Western Edition Host Shares What He is Looking Forward at This Year’s Conference
Business Transitions Forum
Axel Christiansen is the Chair/MC of the BTF NOW | Western Edition conference and originally helped to launch the Business Transition Forum brand five years ago. With over 25 years of mergers and acquisitions and corporate finance experience, Axel focuses on serving small to mid-market BC companies across a wide range of industries and is routinely sought out by entrepreneurs who want to successfully transition their businesses. He is a Senior Vice President with Renaissance Mergers and Acquisitions.
I believe this is the best transition forum in the country, whether it is online or a traditional event format. It brings together all resources that buyers or sellers need in one place and features the best people in the business.
In our interview with Axel, we got his opinion on current trends and opportunities when it comes to mergers and acquisitions, as well as what he is most looking forward to at this year’s new virtual BTF NOW | Western Edition conference.
Q: You’ve had a long and impressive career in mergers and acquisitions. Have you ever seen a year like 2020?
AC: No, what we are seeing is unlike anything the markets and world economy have seen before. The world economy is taking a hard stop and entrepreneurs have to plan. Mergers and acquisitions are very cyclical and will rise and fall with capital. This year, markets have seen a 70% decrease in M&A activity, whereas the worst we’ve seen before was about 50%.
There were several reasons for the decline, such as:
- Private equity groups were experiencing challenges with the companies they already own and not looking to acquire new companies;
- Bankers were reluctant to offer any new loans when they didn’t have a read on where the economy was going; and
- Companies, whether they are buyers or sellers, were focused on dealing with the internal issues COVID presented to their operations.
It’s important to note that the overall impact of the global conditions vary by industry. For example, those in retail, hospitality, travel and tourism are seeing devastating impacts, while those in the right segments of medical, food, janitorial and education are doing well.
Q: How are entrepreneurs responding?
AC: Entrepreneurs are very resilient. One of the things I most enjoy about working with them is to see how they respond to really challenging times. Those that respond positively are moving into different products and services, becoming more efficient, managing safety issues and embracing technology.
Q: What is the outlook for companies wanting to sell?
AC: Volume is picking up. There is increased activity and more transactions taking place, including some very large deals. Companies that are outperforming can command pre-COVID valuation multiples, while those that are underperforming should expect to take a valuation discount. These companies need to look at how they get ready for sale by building out their data story and improving operations.
The outlook is generally becoming more positive and as we get closer to a vaccine, there is the acknowledgement that our current conditions won’t last forever. There may be a one- to two-year impact, and then we will see a trend to more normal circumstances. People are adjusting and that is creating a more favourable outlook.
Q: What is the outlook for buyers?
AC: There is a lot more interest from companies looking to acquire. The valuations are becoming more attractive, although those companies that have been impacted negatively will need to be willing to transact at a lower valuation.
We are also seeing Baby Boomers, now in their early seventies, who want to get out of business and retire. Buyers who are acquiring on this basis are doing quite well.
However, buyers are also cautious as there is more risk all around in making a purchase today. They don’t want to “catch a falling knife” and will demand an extra layer of diligence with customers and key suppliers to ensure the business is stable.
Q: You’ve been involved in BTF since the beginning. What are you looking forward to at this year’s conference?
AC: I believe this is the best transition forum in the country, whether it is online or a traditional event format. It brings together all resources that buyers or sellers need in one place and features the best people in the business. Attendees receive top tier information. For entrepreneurs, BTF will highlight all of the different topics they need to be aware of, as well as connects them with the right people.
This year’s Forum will cover issues that might be heightened in this environment and will answer important questions like “is it the right time to sell?” and “what is your business worth”. Expect to learn more about how deals are being structured and the risks in today’s business environment.
People will have a chance to learn from entrepreneurs like Jason Zanatta, President & CEO of Novo Textiles Co., who has pivoted his business of making dog beds and pillows to being the first Canadian company to make N95 masks.
For more information or to register, visit the Business Transitions website.