Distressed M&A

A company with (potential) continuity problems will want, or be forced, to sell (part of) its operations in time. Obviously, such a sale has a completely different force field than a sale of a healthy company. A so-called distressed M&A process requires a completely different approach, experience, expertise and network than a regular transaction process. The differences are significant due to different circumstances, parallel necessary actions, time pressure, pricing, emotions, risks and types of parties.

Especially in special situations, you are not only looking for a corporate finance advisor, but also for a ‘trusted advisor’. As part of Kruger, we are uniquely placed to manage these types of complex and challenging processes and to be there for you, partly because of our extensive experience in this area.

Successful ‘distressed’ M&A processes start with confidence in a healthy future for the company among all stakeholders. A well-founded recovery plan, based on a well-thought-out business model is an important basis for gaining that confidence, in addition to, of course, belief in management and people.

What may be required for a restructuring:

  • additional or new capital
  • venture capital and/or loan capital
  • sale / parts / assets
  • drastic debt reduction or ‘freezing’ (whether or not via a WHOA trajectory)
  • buy-out of (co-)shareholder(s)

Usually, a combination of measures, with the cooperation of several creditors (read: stakeholders), together constitute the solution. Searching for win-win solutions (or limiting ‘lose’) ultimately offers more potential for everyone.

In the most adverse situations, Kruger's insolvency experience, know-how and associated network is essential.