February is a busy month for many businesses, especially those tying up their financial year-end. It's an excellent time to tidy up the balance sheet, given that this will stay on the audited financial statement for the next 12 months. It is the period to make key decisions around the financial aspects of your business, such as dividends, how much cash you want on your balance sheet, and the working capital required for the forthcoming year. Therefore, it's important to talk to your financial adviser or accountant about how you want your business to look through the next 12 months, particularly if you're planning to sell or bring in investors.
February is typically a busy month for Deal Leaders, too, as it's a time of high activity for acquirers and businesses interested in selling and eager to get to market as soon as they've wrapped up their February financial year-end. Early entry into the market after the close of the fiscal year is advantageous, as it provides a long forecast runway and a solid foundation to build upon.
Latest DLI Activity
Solar Industry Booming
The current state of affairs at Eskom has stirred up much activity in the solar sector. There's increased demand, given the high load shedding. As a result, installers, Engineering, Procurement and Construction (EPC) companies, and Independent Power Producers (IPPs) are experiencing a boom. The challenge IPP start-ups face is capital. Getting debt funding for an installation that has yet to be built is tough. Banks are far happier lending for a revenue stream than lending for assets. Therefore, we are seeing a demand for solar and renewable investors and a spike in discussions with organisations in this sector.
Buoyant Packaging and Labelling Sector
Packaging and related products and services have always been a high-demand sector where we are seeing continued interest from acquirers. However, it is also true that any business looking to sell and fetch a premium price needs a unique selling proposition – so we are always on the lookout, not just for good businesses, but those with something unique in their product offering, which increases barriers to entry and an element of scarcity when compared to other players in their industry.
February Feature Article: Turning Crisis into Opportunity
By Andrea Reinecke, Deal Associate at Deal Leaders
Albert Einstein is famously remembered for saying, "In the midst of every crisis lies great opportunity." It may be worth remembering Albert Einstein's wise words during this energy crisis and reviewing how they can be applied in navigating our businesses through these troubling times. Read this month's feature article by DLI Deal Associate Andrea Reinecke as she shares her insights into navigating a crisis and turning it into an opportunity: Turning Crisis into Opportunity
In the Media
Business Leaders have Mixed Reaction to Proposed State of Disaster
Eskom and the energy crisis took centre stage in the media this month. Read what Deal Leaders Corporate & Advisory CEO Andrew Bahlmann and other business leaders think of the latest attempt to end the energy crisis with the decision by the ANC government to declare a national state of disaster at Eskom.
Read Article: Business leaders have mixed reaction to proposed state of disaster
Edify Enoch with a Pre-budget Wishlist for Dealmakers
Andrew was on Due Diligence again this month, talking to host Michael Avery about his wishlist for the finance minister pre the budget speech. Listen to the episode by clicking on the image below.
M&A as a Growth Strategy
Read Andrew's latest article on how mid-sized businesses can use acquisition in innovative ways to implement their growth strategy.
Also published in the February/March issue of Business Brief.
Deal Leaders Book Club
Review of The Mind Explained
By Matthew Diepenbroek, Senior Business Analyst at Deal Leaders
In a break from the usual book of the month, the DLI team chose to discuss season one of The Mind Explained on Netflix. Each episode offers some interesting insights from the latest scientific studies done on the roughly 1.3 kg of grey matter in our heads. For thoroughly practical topics, like giving your brain the best chance at remembering important information, there was something unexpected, like how we actually rewrite our memories over time.
Image source: Netflix.
In particular, the episode on anxiety garnered much discussion - unsurprising, seeing as it is now the world's most common mental illness. The practical advice for dealing with a panic attack (try and focus your concentration on the things immediately around you, try and describe every detail of your surroundings) to the chemical workings of an amygdala evolved to help us remain vigilant for potential danger (which now comes in the form of utility bills and News24 notifications). The series provides some helpful suggestions, and the final episode on mindfulness is one with plenty of interesting habits and methods to help us better understand our minds and deal with life's everyday stresses. All in all, informative and interesting and left us wanting to know more.
For those winding up the financial year-end, we hope it goes smoothly. Please feel free to reach out if you need any advice or a chat over a cup of coffee.
Rick, Andrew & the Deal Leaders team