Updated: Jul 7
The health officials are responsibly instructing us to remain vigilant but it's difficult to ignore the downward-curve-bending headlines around the world, (even if the Woolworths shelves are still looking a bit Sovietesque). We will soon have an economic crisis to turn our minds to.
There's little doubt Australia is headed for a recession (the IMF thinks it will be 6.7% this quarter), more than double the decline rate of the world economy.
History may not repeat, but it has a way of rhyming, in my opinion.
This 2010 Deloitte report suggests that JV activity surges right after a downturn. Downturns are usually accompanied by liquidity squeezes which has a nasty effect of killing off certain planned business acquisitions. JVs surge because they are not dependent on liquid financing conditions.
It's thematic. Business sales go out of vogue, and alternatives come in.*
ESOPs are similar to JVs in that respect. They can be implemented without reliance on buoyant financing conditions, and in all honesty, represent a bit of an opportunity for employees while valuation multiples are dampened. They also have a nice bonus of making companies more competitive, resilient and ultimately desirable to buyers in the future when conditions return to normal.
I've marshalled together 50 stories on the topic of Employee Ownership from around the world.
My aim here is to add to some of the optimism people are beginning to feel and to shine a light on some ammo we still have to call upon to beat this thing.
Without further ado: