Crude Observations

Covid-19 and Stormont

Or as I like to call it, Office Cat Week 1.


Another abbreviated blog this week, which of course is weird seeing as how I have so much time on my hands what with being housebound for the past week and how verbose I can be. But as luck would have it, my message this week is intentionally brief and to the point and is focused on what we are doing in the short term to manage through this COVID-19 crisis.


Like most companies, our business has felt immediate impacts from the Coronavirus pandemic and we have taken a number of steps to address these on behalf of our clients.


First order of business, Stormont remains open and is actively engaged on a variety of mandates that we hope will continue to move forward as this crisis passes.


As a consulting and advisory business, we need to be mobile and portable.


For this reason we went to a fully cloud-based business model a number of years ago. This allowed us last week to simply switch off the lights at the office, grab our laptops, go home and be fully functional* once plugged into the internet.


*A slight exaggeration on my part as I forgot both my mouse and keyboard and had to go in to pick them up, and I still managed to forget the Bluetooth receiver for my keyboard. On the plus side, I poured out the cream in the fridge and tossed an old lunch that was in there as well.


As per instructions, we are practicing social distancing and plan to work out of our respective home offices until we are told it is safe and appropriate to go back to the office. Until that time we will continue to communicate via email, videoconference and mobile phone. On the plus side for me is that I am now able to have an “Office Cat”. Downside is that he isn’t productive at all.


M&A advisory and capital raising is traditionally a very person-oriented business, involving many meetings amongst multiple stakeholders, typically in person, with parties that often come from across the continent.


While much of our business comes from referrals, typically the “deal” is never signed up without the proverbial in person meeting.


Clearly this is no longer the case for the foreseeable future so our continuing ability to execute on behalf of our clients and other stakeholders (buyers, lenders, private equity funds and sellers) is going to be very much dependent on our ability to leverage technology, referral and reputation.


We are fortunate to have a community of stakeholders who support us and a variety of vehicles, including this blog, that allow us to communicate effectively with them.


It would be reasonable to expect that over the next few months we will utilize this forum to communicate more pro-actively with our expanding network.


We are mindful as well that many of our clients are operating in a new business paradigm and are experiencing unprecedented levels of uncertainty and volatility in their business as they deal with such a fluid environment.


We would like to emphasize that we are here to help where we can. If you or any business colleague are looking for advice on how to weather this storm, please do not hesitate to reach out to us directly. Phone and video calls are easy to make and if you are lucky, “Office Cat” may make an appearance.


Businesses require capital to survive and prosper and it is likely that many lenders will see their people and resources stretched like never before as we dig out of this.


If you need access to capital, we can help you figure out what those exact needs are and help navigate into those providers who have that type of capital and are in a position to act quickly.


Like many owner-managed and self-financed businesses, we fall outside the general collection of safety nets that exist for other businesses. We get the issues because we live them every day in our own business.


As I am not a healthcare worker, I am not even going to opine on what may or may not happen on the health side of the ledger as this crisis runs its course. I have read so many articles with varying scenarios that it will make your head spin proving of course that NO ONE KNOWS. What I do know is that if self-isolating and maintaining physical or social distance seems inconvenient, let’s keep in mind how “inconvenient” the alternative might be.


The above qualification aside, I do work in the economic world and I think it is safe to say that I can comment on that.


The economic fallout from this disease and the global response is going to be massive. Q2 GDP in North America and other impacted countries could contract anywhere from 5% to 15%. While much of this will be short term with a snap back in the subsequent quarters, a lot of the damage to businesses and business models may ultimately prove permanent.


It is in this context that the next round of triage and work will begin – trying to stitch the economy back together.


In the post pandemic world, it will be the sources of capital (lenders and equity investors) and the people who connect everyone together who will have to work collectively to repair the damage and clean up the fall out. Governments provide the liquidity and mobilize the public policy response to these emergencies, but it’s the private sector that has to get the economy moving again.


If you want to discuss the issues, the possibilities and the opportunities, please do not hesitate to reach out to us.


Stay safe everyone. Wash your hands. Be kind.


Stuart and Dave

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