Finding value in consumer deals after COVID-19

How to evaluate consumer businesses early in the deal process based on the impact of the recession and the “new reality” of consumer behavior.

Sean Stephens

Sean Stephens

Advisory Managing Director, Strategy, KPMG US

+1 212-954-6722

Private-equity investors who went in early and focused on consumer businesses racked up exceptional returns after the 2008-09 recession. But as investors start looking for opportunities in the consumer sector this time, it is critical to understand how the COVID-19 lockdown has changed consumer behavior and how this recession differs from previous downturns. Picking winners this time will require a deeper, more analytical commercial diligence that goes beyond the normal market and competitive assessments to understand how a prospective acquisition may be impacted in the post COVID-19 “new reality.” Understanding the true implications of COVID-19 to the target earlier in the deal process will allow investors to make more informed decisions as to whether to continue further with diligence or walk away from a potentially bad investment.