November 2020 Newsletter

Monthly Edit: Onward & Upward in the Face of Uncertainty

Instead of focusing on the undeniable strain that COVID-19 has put on the global economy and its businesses since March of this year, we want to take a moment to share some positive observations as we enter the fourth quarter.

First, let’s highlight those sectors that benefited from the changes in day-to-day life caused by the realities of the pandemic. One example is food delivery services, which have seen an unparalleled level of demand since March. This boom in business includes uncommonly high second quarter revenue increases. Take for instance these Q2 stats: Postmates’ 125% increase, UberEats 110% increase, and Grubhub’s 41% increase. These outsized performances have led to buzz in the M&A world. The jury’s still out (FTC, SEC, DOJ), but Uber is positioned to acquire Postmates in a $2.65 billion deal, and Grubhub is prepared to merge with Netherlands-based Just Eat Takeaway.com in a deal valued at $7.3 billion.1

Another industry primed to benefit from our new at-home world is communications. One great example is Zoom. Usage of Zoom has increased 1900% since December of 2019 as a direct result of workplaces, schools, and general communication going remote. In this time period, the value of Zoom shares has risen 355%.2 Some other examples of technology helping us bridge the gap during these socially distant times include Facebook-owned Instagram’s recent introduction of a call feature and the recently renamed browser extension, Teleparty, which allows users to watch Netflix, Disney Plus, Hulu, and HBO in sync with friends. This is a natural segue into a brief note on the expansive success of streaming services since March. Netflix added nearly 16 million new subscribers during the first quarter of 2020. Disney+, which has gained over 60.5 million members in just ten months since launch, is part of Disney’s larger plan to expand its direct-to-consumer business, as per CEO Bob Chapek’s announcement earlier this month. Then we have WarnerMedia’s HBOMax coming in at a trot, ever-popular YouTube and Hulu, and the list goes on.3

While 2020 has not been a boom year for M&A, the sector has seen some impressively successful transactions despite unfavorable circumstances. Healthcare has seen some impressive, high-value transactions announced since the beginning of the year, according to the Global S&P ratings. This Includes Teladoc and Livongo’s announced merger, valued at $18.3 billion; Siemens Healthineers’ acquisition of Varian Medical Systems, valued at $16.4 billion; Gilead Sciences’ acquisition of Forty Seven, valued at $4.1 billion; Sanofi’s acquisition of Principia Biosciences, valued at $3.4 billion; and Novo Nordisk’s acquisition of Corvidia Therapeutics, valued at $2.1 billion.4 These transactions highlight how, even the midst of a global pandemic, healthcare is still an industry of scale with long-term strategic initiatives at the forefront of business-minded stakeholders; it’s an ongoing goal of leaders in the healthcare sector to assess current care models and opportunities for transformational change. The pandemic is showing something we’ve understood and operated on for years: assessing and improving models is good not only for business, but also for people.

As we’ve all seen in the recent news, Pfizer’s COVID-19 vaccine is proving 90% effective in their most recent trials and the company is seeking FDA approval by the end of November.5 While Pfizer’s vaccine will not be ready for rollout to the general public until sometime next year, this is a good sign for many industries, oil & gas included. Goldman Sachs Group Inc. wrote in a report this week that crude markets are likely to see sharply higher prices next summer as the demand outlook improves, and JPMorgan Chase & Co. anticipates global oil demand will surpass its pre-pandemic levels by December next year.6

All the above is proof that even when things seem most grim, there is still opportunity for positive change in all aspects of life, perhaps especially in business. Sometimes though, the path towards success and enduring growth can seem tricky to navigate. That’s where we come in. SLKone’s expert team can help guide your company through processes to not only assess and improve your existing business practices, but also come up with new strategies that will ensure lasting success. Whatever the problem, SLKone has a bespoke solution for you.

1US SEC; Bloomberg News 2Business Insider 3Bloomberg News; The Wall Street Journal 4S&P Global Market Intelligence 5The Wall Street Journal 6World Oil


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