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04/08/2011

Distressed deals continue to fall

Acquisitions of insolvent businesses in the UK have continued to fall in the first half of 2011, according to research by Experian Corpfin on behalf of the insolvency trade body R3.

The figures show that distressed deals now account for one in 19 of all mergers and acquisitions, compared to one in nine when activity peaked in 2009.

During the first half of 2011, 76 out of a total of 1,430 acquisitions (1 in 19) in the UK involved companies acquired out of administration or other formal insolvency procedures. This compares to 249 out of 3,139 acquisitions (1 in 13) during 2010 and 333 out of 3,042 (1 in 9) during 2009.

R3 President, Frances Coulson comments:

“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.

“However in recent months there have been fewer bargains and many investors are struggling to acquire credit to make a purchase.

“For those investors who have the money supply they should remain alert as we can expect to see a continued supply of decent investment opportunities in the run-up to recovery, despite the number of insolvent deals recently falling.”

 

For further information please contact:
Charlotte Towerton, R3 External Communications Officer
t: 020 7566 4203   m: 07918 161 219 e: charlotte.towerton@r3.org.uk


R3 Press Office

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.