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Peer-to-Peer Equation Coronavirus Webinar - Part Three

June 10, 2020

By: Dennis Ensing, Executive Director, SWO Angels

Our third Equation Angels (#bepartoftheequation) coronavirus pandemic-focussed Peer-to-Peer webinar for members and portfolio ventures was held last Wednesday June 3. Participants from all four member chapters – GTAN, AngelOne, SWOAngels, and WECAN (Windsor) – joined and contributed with active Q&A on two topics. 
 
Our sincere appreciation to the Equation chapter sponsors who contributed their time and expertise to the content and discussion:
 
1. Mergers & Acquisitions as a growth strategy during these times of uncertainty
KPMG - Don McKinnon, Senior Vice President Corporate Finance
Miller Thomson - Dwayne Kuiper, Partner
 
Bain & Company frames M&A moves at this stage within the following context: “Play offense, not just defense – define how you will outperform competitors and take share through and beyond the crisis.” (“A CEO Plan for Coronavirus – Actions To Take Now – More Detail,” Bain & Company, March 13, 2020)

With this in mind, Don & Dwayne walked us through these key topics:
• Deal activity levels
• Cash matters (tie back to First Order)
• Addressing valuation challenges
• Due diligence implications (remote / Zoom)
• Cross border considerations
• How about distressed deals?
 
More than ever, in a market where your cash reserves give you the ability to leverage your position for better terms, when valuations are buyer-friendly, and there will be a host of distressed sellers unable to control their own destiny, you need to be prepared to address opportunities efficiently and effectively.
 
2. Tax Planning - why you should freeze or refreeze now!
BDO - Paul Walker, Partner in the Tax Advisory Services, and Alexandra Hardy, Partner
 
2020 is an ideal time to freeze or refreeze tax valuations of your angel, operating company or general portfolios as market valuations are down significantly. The possibility of significant tax changes also makes this a time-sensitive topic. Significant concern has been voiced, driven by the need for governments to repay COVID-related spending, about the income inclusion rate of capital gains and the amount – or even removal – of a capital gains exemption.
 
Paul reviewed the (currently) accepted means of addressing these opportunities and concerns, as well as the pitfalls to avoid. He also reminded us to always seek professional advice to implement the tax planning measures to our specific circumstances.
 
A recording of the full webinar (about 2 hours) is available here:
https://drive.google.com/open?id=1wYgRaqYuOEcD9fHlgzjGq6C43zzZLLDQ
 
The presentations provided by our panelists are included below.

Our next Equation Angels Peer-to-Peer event on the Economy and Moving Past Stabilization is scheduled for Wednesday, June 24, starting again at 4:30 - mark your calendars!
 
Resources
Why you should freeze or refreeze now (PPT)
M&A during Covid-19 (PPT)