One in ten business negotiations involves an insolvent firm
Expert claims both sides can profit from deal
Nearly one in ten UK business negotiations involves an insolvent
firm, according to a new report.
Experian Corpfin found that 9.4 per cent of UK mergers and
acquisitions in the first half of 2010 involved companies purchased
out of administration or another formal insolvency procedure.
The firm, who carried out the research on behalf of insolvency
trade body R3, revealed distressed companies were concerned with
141 out of 1,491 deals.
Steven Law, R3 president, expressed his belief that both sides
can benefit from any potential deal.
He said: "For buyers with access to funding, there is the
opportunity to extend their portfolio while values remain subdued.
For the businesses themselves, an acquisition represents a fresh
start and a chance to secure the jobs of the workforce."
Since 2008, the number of distressed deals has more than doubled
when one in twenty five deals involved an insolvent company.