Why does Brazil only start after Carnival?
Because Carnival simply generates engagement, which generates visibility, which generates money, and it is not little!
The National Confederation of Commerce of Goods, Services and Tourism (CNC) estimates that the 2023 Carnival will move R$ 8.18 billion. The amount is 26.9% higher than last year, but 3.3% below that recorded in 2020, the last before the covid-19 pandemic. According to CNC president José Roberto Tadros, the main obstacle to restoring revenues to pre-pandemic levels is the current, less favorable economic context.
About 85% of the revenue should be generated by three segments: bars and restaurants (with expected turnover of R$ 3.63 billion), passenger transportation (R$ 2.35 billion), and hotel and lodging services (R$ 890 million). The remaining 15% comprises services provided by leisure and culture companies (R$ 780 million) and other segments, such as car rentals and travel agencies (R$ 530 million).
They are really good numbers that can surprise!
And what does “M&A” have to do with it?
First, that Carnival is the largest popular festival on the planet and in several aspects has a lot to teach the corporate world.
Second, that just like Carnival, the M&A process goes through rigorous evaluations and commitment from everyone involved.
Let’s make this fun comparison and see what score M&A will get on the avenue this year:
The art of planning
It is not new that samba schools and Carnival blocks are considered true examples of organization; after all, to achieve an event of such magnitude, a lot of management and structuring is required.
Just like every M&A process, which needs to be well planned and structured. After all, we are talking about a company’s entire history and all the study and analysis behind it. As with any other process, you should not jump straight to the end looking for quick results. The process must start from the beginning, and that beginning is “planning”.
Samba schools and M&A advisory firms are companies that have innovative cycles every year.
Harmony and Due Diligence
In Carnival, one of the extremely important aspects is harmony, whether on the avenue or on the street. Everyone involved must be in sync.
The same happens with companies. The processes of reviewing the information provided by the partners and their team, of a company that is for sale, by the buyer, before actually completing the purchase of the company, must be in harmony.
Following the trio of processes
During the passage of the trios elétricos (sound trucks), everyone stays attentive to the route. Everyone involved must follow the rhythm. When there are mismatches, whether in the streets or in companies, the progress of the processes can be harmed.
Since all agents know all the information and numbers, a stage of tax and corporate structuring of the operation is always prudent, aiming at the best move to minimize taxes and duties that the transaction will entail.
The motivation of the closing
The motivation of samba school members and of those wearing abadás in the street blocks is truly incredible. In the corporate world, there is no greater motivation than believing in a project and doing the possible and the impossible to make it happen.
Heading toward the long-awaited end of the avenue or the closing of the deal, it is time to put all the commercial, financial, and legal aspects into the contract, because in the end it all comes down to a story of value.
And since the year only starts after Carnival, Happy New Year!