Acquiring Distressed Businesses in Ireland

Jon Moulton

• Ireland has lots of distressed companies. Fact.

• Irish Bank IPOs similar in frequency to distressed company acquisitions in Ireland. Also fact.

Total Insolvencies: Comparison from 2009 to 2011

Source: Insolvency Journal.(http://www.insolvencyjournal.ie/industrial_stats/11-09-01/Total_Insolvencies_Comparison_from_2009_to_2011.aspx)

Total Insolvencies by Industry: Comparison from 2009 to 2011

Source: Insolvency Journal. (http://www.insolvencyjournal.ie/industrial_stats.aspx?NewsCatID=7edd0572-1fa4-48df-bf06-9d64eedab7be)

Potential Targets• Good businesses, bad balance sheets

– debt for equity deals by banks• Silly legacy cost base – rents

- insolvency or law change • Poor operating result, lots of debt (usually)

- debt for equity- fresh equity- new management (mostly)(Our sort of deal)

• Poor businesses, bad balance sheets- liquidate and liberate people and assets

Owners• NAMA – National hotel, golf and

property conglomerate• Irish Government backs• NIB, Ulster, KBCR, other foreign

owned• International banks (Eircom)• Private and public “owners”

Why Sort it Out• Cons – Losses and job losses• Pros – Get economy going again,

restore reality to business• Redeploy economic resources to

economic activity• Issues – What’s a fair price???• Won’t solve bloated and happy public

sector I’m afraid

QUESTIONS