Distressed Mergers & Acquisitions
JD Ford has extensive experience in transactions involving a change of control, asset sales and other M&A activities for distressed middle-market companies. These situations may involve asset divestitures, or selling a company or its assets quickly under extremely distressed circumstances – often in contested or litigious settings – in or out of bankruptcy. We focus on preserving the company’s value as a going-concern, and avoiding value-eroding piecemeal liquidations.
While we often serve as the sell-side investment banker in these transactions, soliciting and negotiating the sale transaction, the firm has advised other transaction participants in a variety of roles in the distressed M&A context. The firm specializes in advising middle-market companies where a disposition strategy depends on running a prompt, concerted, sophisticated M&A process. Our extensive experience in M&A provides us with the know-how and contacts to get the job done efficiently and under the most favorable terms possible.
It is our experience that many distressed M&A candidates experience similar challenges, including: changing industry conditions; deteriorating cash flow and operating performance; liquidity constraints and restricted access to capital from current lenders; debt exceeding enterprise value; access to new capital is limited by deteriorating balance sheet; debt payment defaults or expected defaults; and over-extended payables. The diverse group of professionals that comprise the JD Ford Special Situations Group have the experience and qualifications necessary to address all of these challenges and their interrelationships to structure and execute the most favorable distressed M&A transaction possible.
Distressed M&A vs. Healthy M&A
Over the years JD Ford has gained an in-depth understanding of distressed M&A, which differs significantly from healthy M&A. A successful distressed M&A advisor must have the unique experience and qualifications to successfully structure and execute a distressed M&A deal in what is often an abbreviated timeframe. Because many distressed M&A transactions are consummated during or under the threat of bankruptcy when a company’s going-concern value is less than the company’s liabilities, the advisor must have a strong understanding of the many complexities of the bankruptcy process to help ensure the best outcome for the client, as well as its debtors, creditors and investors. In addition to a thorough understanding of the bankruptcy process, the successful execution of a distressed M&A transaction requires the advisor to have many distinctive qualifications, including:
- A strong understanding of the art of distressed business valuation;
- Proven negotiating expertise;
- Experience and relationships with distressed investors;
- Thorough understanding of the distressed company’s market and industry;
- The ability to facilitate a transaction with speed in order to preserve going-concern value;
- Ability to effectively manage relationships among a variety of professionals including: bankruptcy lawyers, workout groups, bondholders, and distressed investors;
- A professional demeanor that can bring clarity and focus to tumultuous situations.
At JD Ford our Special Situations Group possesses all of these qualifications making us uniquely able to successfully guide you through the tumultuous waters of distressed M&A. We welcome the opportunity to confidentially discuss your unique situation and our qualifications in greater detail – please contact us here.