Christopher Voolaid’s Post

💼 Distressed Investing M&A is a complex strategy for acquiring and revitalizing struggling assets and companies: 🏛 What is Distressed Investing M&A? Distressed Investing M&A involves the acquisition of companies or assets that are struggling financially, often characterized by negative cash flow and high leverage. These transactions aim to restructure and revitalize distressed entities, turning potential losses into profitable ventures. 📈 Purpose of Distressed Investing The primary goal is to acquire distressed assets at attractive valuations, restructure their operations or balance sheets, and eventually realize significant returns. This approach allows investors to capitalize on market inefficiencies and distressed situations, providing opportunities for substantial gains. 🗒 Structure of Distressed Investing Transactions Distressed investing transactions typically include several key components: - Financial Analysis: Involves evaluating cash flow, leverage, and overall financial health to identify distressed opportunities. - Due Diligence: Comprehensive investigation into the distressed entity's operations, assets, liabilities, and potential legal issues. - Restructuring Plans: Strategies to improve financial health, which may include debt restructuring, asset sales, or operational improvements. - Valuation: Determining the fair market value of distressed assets to negotiate favorable purchase terms. 💼 Why Should I Master Distressed Investing M&A? - Maximizing Returns: Understanding distressed investing allows investors to acquire valuable assets at lower prices and realize significant returns through strategic restructuring. - Navigating Market Uncertainties: Mastery in distressed investing equips investors to capitalize on market downturns and economic uncertainties. - Mitigating Risks: Proper analysis and due diligence help in identifying and mitigating potential risks associated with distressed assets. 👨💼 Key Components to Focus On: - Negative Cash Flow: A primary indicator of distress; focus on the entity’s ability to generate positive cash flow post-restructuring. - Leverage Signals: High leverage often indicates distress; analyze the debt structure and refinancing possibilities. - Operational Improvements: Identify areas for operational enhancements that can improve profitability. Asset Valuation: Accurately value the distressed assets to negotiate favorable purchase terms and anticipate potential returns. Credit: Schulte Roth & Zabel LLP The Dealmaker #PrivateEquity #Investments #Investment #FinancialServices #InvestmentBanking #Finance Take a look at our AI prep partner software 👇 ---------------------------------------------------- 💡 https://lnkd.in/d6f2H6Ay 💡 ---------------------------------------------------- J.P. Morgan Morgan Stanley Goldman Sachs Citi HSBC Deutsche Bank Barclays UBS KKR Blackstone

Distressed debt players say restructuring processes are undergoing a shift, one that might take investors away from a scenario where they operate individually, to where cooperation among creditors is key. PitchBook LCD’s Jack Hersch has more on co-op agreements in his latest Distressed Deep Dive, as well as a look at where managers see opportunity, and potential pitfalls, in the quarters ahead. https://lnkd.in/eAY-dVQB PitchBook Jack Hersch #distresseddebt #PrivateEquity

All asset values fluctuate over time reflective of industry-wide factors as well as financial market dynamics. When the acquisition financing spigot is turned on and capital is flowing indiscriminately, M&A valuations tend to be high. Click to learn more on acquisition financing and asset value cycles. #AcquisitionFinance #MergersAndAcquisitions #PrivateEquity #CorporateFinance #DealMaking #Finance #Business #InvestmentBanking #PrivateEquityDeals #DebtFinancing

All asset values fluctuate over time reflective of industry-wide factors as well as financial market dynamics. When the acquisition financing spigot is turned on and capital is flowing indiscriminately, M&A valuations tend to be high. Click to learn more on acquisition financing and asset value cycles. #AcquisitionFinance #MergersAndAcquisitions #PrivateEquity #CorporateFinance #DealMaking #Finance #Business #InvestmentBanking #PrivateEquityDeals #DebtFinancing

𝗜𝗻 𝘁𝗵𝗲 #𝗔𝗘𝗖𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝘆, 𝗿𝗶𝘀𝗸 𝗮𝘃𝗲𝗿𝘀𝗶𝗼𝗻 𝗶𝘀 𝗸𝗲𝘆.🔑 However, while cash-only acquisitions minimize risk, they can also limit shareholder returns. 𝗘𝗻𝘁𝗲𝗿 𝘁𝗵𝗲 #𝗣𝗿𝗶𝘃𝗮𝘁𝗲𝗘𝗾𝘂𝗶𝘁𝘆 𝗽𝗹𝗮𝘆𝗯𝗼𝗼𝗸: Leverage debt to boost growth and returns. Despite high interest rates, debt is cheaper than equity, offers tax benefits, and refinancing opportunities. Explore how strategic debt management can transform your M&A strategy in this week’s blog by Hobson Hogan. #AEC #MergersAndAcquisitions #FinancialStrategy #Growth

As the leveraged loan market experiences a historic surge, private equity firms are increasingly capitalizing on opportunities to extract dividends from their portfolio companies. With $28 billion issued in leveraged loans for dividend purposes this year alone, the demand for strategic financial guidance is more crucial than ever. At Hauser, we recognize the intricacies and challenges PE firms face in maximizing returns, especially when traditional exit strategies are less viable. Here’s how we can support your objectives: 1.M&A Expertise: Hauser’s nationally recognized M&A Transaction Advisory and Brokerage firm supports Middle Market and Lower Middle Market Private equity firms to buy, build and exit successful investments. 2. Insurance Solutions: Help our equity clients take control of insurance spend at the portfolio level by putting risk management decision making back into the hands of the private equity sponsor. 3. Strategic Insights: identify inefficiencies to deliver accretive savings and drive enterprise value. As we navigate this period of stalled exits and dynamic financial landscapes, partnering with Hauser ensures you are well-equipped to manage and capitalize on the complexities of the current market. Our team of private equity, insurance, and employee benefits professionals helps investors understand their transaction risks, manage their exposures, and capture superior portfolio returns. Together, we can turn today’s challenges into tomorrow’s successes. Connect with us today to see how we can help you maximize the potential of your investment strategy in these turbulent times. #PrivateEquity #LeveragedLoans #MergersAndAcquisitions #RiskManagement #FinancialServices #Hauser https://lnkd.in/g8a6JkZz

Although distressed investors generally believe 2024’s back half won’t be much different than the first half – even with a looming presidential election and economic warning signs – the process of distressed investing is changing significantly. Cooperation agreements – “co-ops” – are becoming crucial in restructurings as creditors join forces to battle liability management exercises – LMEs - concocted by companies, their sponsors and advisors. I wrote about distressed Investors’ views of the rest of 2024 and discussed the value of co-ops in this new story for PitchBook LCD.

HMC Capital (ASX: HMC) is pleased to announce the 100% acquisition of Private Credit fund manager, Payton Capital, has now reached financial close. Payton is a highly scalable business with $1.5bn of Commercial Real Estate loans and is well positioned to organically grow beyond $2-3bn over the medium-term having recently received up to an aggregate of $500m credit approved terms for new fund financing facilities. Payton represents the first major step in establishing a $5bn+ diversified Private Credit asset management platform over the medium-term under the leadership of Matt Lancaster as Chair of HMC’s Private Credit platform. HMC Capital Chair of Private Credit, Matt Lancaster, said: “We are focused on building Australia’s leading private credit platform with a broad-based focus and capability. The private credit market in Australia is still at a very nascent stage of development with significant parallels to what I experienced in the United States over a decade ago. The Payton acquisition provides a strong growth platform in real estate credit and we are now focused on expanding our capability to take advantage of the significant opportunity in corporate credit.” For additional information or to view the full announcement, please visit the investor centres: https://bitly.cx/kuJdF

Private credit is playing an increasingly vital role in financing M&A deals within the private equity space. In fact, the global private credit market has reached over $1.5 trillion, driven by its flexibility and ability to provide tailored financing solutions.

In recent years, private credit has emerged as a dominant force in the private equity (PE) space, particularly in the realm of mergers and acquisitions (M&A). As traditional banks pull back from higher-risk lending, private credit funds are stepping in to provide the capital necessary for leveraged buyouts and other acquisition strategies. In 2024, private equity deals financed by private credit are gaining momentum, and several trends are defining this shift. #PrivateCredit #PrivateEquity #MergersandAcquisitions #Banking #Money #Investments