Partner Article

North East distressed deals on the rise

‘DISTRESSED DEALS’ involving North East businesses has increased by more than a third since 2008, according to new research conducted by Experian Corpfin.

One in nine (11%) of the regional mergers and acquisitions completed in the first half of 2010 involved distressed businesses, compared to just eight per cent in 2008.

And Linda Farish, chairman of the North East arm of insolvency trade body R3 and director of Recovery & Insolvency at Newcastle-based accountants RMT, expects the trend to continue for the foreseeable future.

She said: “Insolvent companies have naturally become part of a greater number of north east deals during the recession, and whilst this may now have officially ended, distressed businesses and assets are continuing to regularly come onto the market.

“Distressed deals have always been part of the north east’s corporate landscape, and we fully expect them to be more prevalent than usual over the next few years, as the regional economy battles its way back to health.”

Nationally, almost one in ten (9.4%) of the mergers and acquisitions completed between January and June this year involved distressed businesses, with 141 deals involving companies that were acquired out of administration or other formal insolvency proceedings.

The total value of all these deals amounted to over £518m.

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