Making the best out of distressed M&A

11 February 2020

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Mergermarket is pleased to present Making the best out of distressed M&A, published in association with Imprima. After several buoyant years of growth, the global economy is slowing down, and with it comes the rising likelihood of distressed M&A transactions. Whilst this can generate challenges, an increase in distressed situations could also present an opportunity. Already, strategics and PEs are capitalising on this form of investment.

Exploring these trends, Mergermarket, on behalf of Imprima, spoke with six experts from the fields of investment banking, law, consultancy and academia to share their insights into the drivers, opportunities and pitfalls of distressed dealmaking.

Points of discussion include:

  • Opportunities in distressed M&A are set to increase further. The uncertain global environment means that the upward trend of M&A transactions involving distressed assets is set to continue throughout 2020. While all sectors might be exposed, some are more vulnerable than others, with retail providing some of the most significant opportunities. 
  • The distressed M&A process comes with challenges. Deals are usually met with an accelerated timetable which can cause problems if there is not enough time to value assets and conduct adequate due diligence. Buyers must, therefore, be on alert for such pitfalls.
  • Dealmakers need to be prepared to avoid post-merger issues. M&A strategies often fail to deliver their promised benefits because post-merger integration is poorly executed. The consequences of these failures can be even worse in distressed situations. New technology, like AI, may help with this process.