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COVER STORY
Breakthrough deals
Between them they’ve closed thousands of deals worth billions of
pounds. Our panel of M&A heavy-hitters give their top tips on
dealmaking through the credit freeze and avoiding the pitfalls
Do distressed deals
JON MOULTON – MANAGING PARTNER,
✯
ALCHEMY PARTNERS
Debt finance is now only obtainable on slow of sector, usually we are pretty agnostic.
and nasty terms – and not much fun, so we are You shouldn’t miss the opportunity of
really looking at unleveraged deals, smaller doing acquisitions of distressed competitors.
public-to-privates and businesses at the difficult It is risky and difficult, but those who
end of life. There is plenty of it coming in. actually succeed in doing so will look
We’ve always focused on difficult deals and awfully clever in two or three years’ time.
turnarounds, so our strategy more or less plays The ideal foundation for a successful
itself at the moment. There are lots of turnaround is a decent-to-good business. It
turnarounds and we’ve seen increased forced should be one that has survivability, growth and
selling: virtually anything can get into trouble. ultimately some value – in other words, not a
We also have a distressed debt fund, which is Woolworths. We also look for a tight-to-terrible
of course very much the form of activity that balance sheet, one that allows us to put in
you want in these markets – that’s not buying money in order to take control through the
companies but investing in their debt. equity. The management might be anything
For the most part, I would say that we from truly appalling to very good. If the
are not receptive to doing deals in retail, management team is good, it should have
which are mostly ending up in pre-pack arrived recently, otherwise we will be a bit short
administrations rather than private-equity of a turnaround plan. At the moment, I would
backed turnarounds. We are finding it tough say that’s what we’re looking for. A great
to do deals in construction-related activities business with good management generally isn’t
because of the massive uncertainties. In terms an easy combination to deal with.
“The ideal foundation for a successful turnaround is a decent-to-good business.
It should be one that has ‘survivability’, growth and ultimately some value –
in other words, not a Woolworths. We also look for a tight-to-terrible balance sheet”
18 Mergers & Acquisitions
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