Distressed deals continue to fall

BUY-OUTS of insolvent businesses in the North West have continued to fall in the first half of 2011, according to research by Experian Corpfin.

The research, carried out on behalf of insolvency trade body R3, shows that distressed deals account for 10% of all mergers and acquisitions – down from a peak of 20% in late 2009.

During the period, a total of 229 acquisitions were carried out in the  North West – 23 of which were businesses bought out of administration or receivership.

This compares with 32 out of 230 acquisitions (1 in 7) during the second half of 2010 and 22 out of 117 (1 in 5) in the final quarter of 2009.

Jeremy Oddie, North West regional chair of R3 and head of recoveries at Mitchell Charlesworth, said: “Distressed acquisitions have become a key part of the regional 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.

“While the number of insolvent deals has been falling, investors should remain alert as we can expect to see a continued supply of decent investment opportunities in the run-up to recovery.”