Winning in Turbulence

Pursue Game-changing Acquisitions and Partnerships

For many executives, doing a deal in a downturn seems risky and impractical. Credit markets aren’t functioning normally, so financing is expensive and hard to come by. Cash reserves need to be guarded as a safety net in case the economy stays bad. Equity markets are depressed, so acquirers and targets alike are wary of stock-based transactions. A major deal could distract management from strengthening the core business and bring unforeseen hazards.

Acquisitions are certainly more challenging in a downturn. The number and value of deals tend to drop dramatically during and immediately after a recession. The aggregate value of deals in 2002, for instance, right after the 2001 recession, came to ...