The BVCA Research Team are commissioning a new report entitled 'LBO distress: impact on company valuation and wider implications'.
It is anticipated that the study would involve an analysis of the relationship between leverage and LBO related bankruptcies in the UK, to examine the implications for company valuation of financial distress. The study would initially have two stages:
- First, monitoring and analysis of the existing situation, by obtaining data to give an idea of the magnitude of the problem at the present time, in both private-equity owned and public companies (CMBOR have a useful database). This would cover default and bankruptcy rates, as well as actions taken in distress, eg, job reductions. Also, trying to form a view on the major underlying reasons behind the distress.
- Second, examination of some case studies of private equity owned portfolio companies that have suffered distress, and comparison to bankruptcies of publicly owned companies. This would include examining aspects of how the management / governance /action plans were implemented and outcomes, in order to give some suggestions as to best practice. Ideally there would also be some segmentation, looking at the difference between the midmarket and large buyout ends of the market.
Download:
Invitation to Tender Guidance Notes
Download:
Invitation to Tender LBO distress
