Distressed businesses in one in ten deals - research
Acquisitions of distressed businesses continue to play a large role in the Midlands deals market, according to new research.
Trade body R3 said it found distressed companies were involved in one in ten Midlands acquisitions during the first half of 2011 - though the figures are down on two years ago. Experian Corpfin carried out the research on behalf of R3 which found 20 out of the period's 201 deals involved a business in administration or other formal insolvency procedure.
This was a similar proportion to 2010 when one in 11 acquisitions (40 out of 460) involved a distressed business. But it was lower than the peak of activity in 2009 when one in six acquisitions (76 out of 477) was a distressed deal, the research revealed.
R3 Midlands chairman Matthew Hammond, a partner at PwC in the Midlands, said: "Distressed acquisitions have become a key part of the deals landscape over the past three years.
"Investors have been taking the opportunity to acquire businesses and assets while values are low and we have seen the emergence of specialist turnaround investors.
"In recent months, however, there have been fewer corporate bargains and many investors are struggling to access credit to make a purchase.
"Investors who have the money supply should remain alert as we can expect to see a continued supply of decent investment opportunities in the months ahead, despite the recent fall in the number of insolvent deals."
