Angela Blake speaks with Financier Worldwide for a feature story on distressed mergers and acquisitions (M&A) transactions. She comments on the unique set of risks and opportunities these transactions present, including:
- the increase in distressed businesses creates significant opportunities for investors, particularly those that can see potential in current valuations and have capital to deploy;
- why the conditions that may compound adversity for businesses can also amplify the risks for potential acquirers;
- the current valuation gap may increase post-closing litigation risk for companies on the brink of insolvency;
- given the shortened timescale of a distressed deal, investors may be unable to conduct extensive due diligence on the company or assets they are acquiring;
- a company in the early stages of financial distress will have more optionality in the sale process—as their financial position deteriorates, speed to closing becomes increasingly important;
- when faced with a range of stakeholders with myriad and often conflicting interests, emotional intelligence and consensus building can be vital to getting a deal done; and
- regulatory scrutiny can also present complications for certain distressed deals.
The full story is available here.
Bennett Jones