The number of insolvent businesses being acquired in the UK fell in the first half of 2011, according to new research.
The number of insolvent businesses being acquired in the UK fell in the first half of 2011, according to new research.
Distressed deals accounted for one in 19 of all mergers and acquisitions in the first six months of the year, compared to one in nine when activity peaked in 2009.
The study, conducted by browser-based deals database Experian CorpFin on behalf of insolvency trade body R3, shows that the market for distressed deals continues to decline.
In the first half, 76 out of a total of 1,430 acquisitions in the UK involved companies acquired out of administration or other formal insolvency procedures.
During 2010, distressed deals accounted for 249 out of 3,139 acquisitions, or one in 13, while in 2009, the figures were 333 out of 3,042, or one in nine.
R3 president Frances Coulson believes that 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.’
Coulson adds, ‘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.’
