Partner Article

Falling levels of distressed acquisitions in the North East

Acquisitions involving insolvent businesses accounted for just one in 22 of all deals in the North East in 2011, according to new research.

This figure represents a massive reduction from the peak in activity in 2009, when one in six of all acquisitions and mergers involved insolvent businesses.

However, Linda Farish, North East regional chair of insolvency trade body R3 attributes this change to a lack of credit, and the fact that fewer bargains are available for purchase.

She commented: “Distressed acquisitions have become a key part of the deal landscape over the past three years.

“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.”

Just two out of 45 acquisitions in the first half of the year in the North East involved companies in administration, in comparison to 15 our of 131 in 2010, and 21 out of 117 during 2009.

This was posted in Bdaily's Members' News section by Ruth Mitchell .