March saw 34 bankruptcy-related M&A deals get done for a value of $698 million. This is the highest volume seen since August of 2004. Needless-to-say, look for those numbers to rise!
Fourteen banks failed in the US over the course of the first seven weeks of this year, which would put the pace at 100 for the year. However, distressed investors think the pace is going to pick up with 200 banks failing over the next twelve month, and total bank takeovers ultimately exceeding 1,000. With Option ARM loans set to come due, things are just getting started!
I’ll try and get some numbers for Europe, but the failure rate should be lower if previous trends hold up.
While many in the distressed investing community were forced to play the part of a wall-flower over the past few years as their counterparts in the buyout business made deal after deal after deal, they’re now finding it’s their turn to dance. Here’s KPS Capital Partners LP‘s David Shapiro, one of the panelists’ at The Deal’s recent Distressed Investing Conference, discussing how now is the time to invest in distressed companies: