Across a multitude of industries, businesses are still reeling from the impacts of the COVID-19 pandemic. Companies in some sectors are uncertain if recovery is even on the horizon for them or just how long it’s going to take if their markets do recover. Conversely, some providers are keen to expand and diversify their platform, even considering entering into M&A deals while the pandemic is still upon us.
In this episode of Across the Table, McGuireWoods partners Geoff Cockrell, Amber Walsh, and Mark Freedlander are joined by Huron Consulting’s Laura Marcero. During this interactive group discussion, they talk in-depth about distressed transactions, particularly in the healthcare space. They explore the increased attention investments in distressed assets are receiving, which may be surprising given the current crisis. The discussion then focuses on the types of companies that may benefit from distressed transactions, including providers severely affected by the pandemic and those who are desperate to find liquidity sources.
The group examines different deal sources and where you can find opportunities, such as special situations M&A groups, workout lenders, financial advisory firms, and independent sponsors. They also address deal dynamics and the factors likely to affect the success of this type of deal, including valuations and protection policies for both buyers and sellers.
What is common across the board is how a company’s positioning pre-COVID will be a primary factor driving distressed transactions.
Types of companies that will involve themselves in distressed transactions 02:17
Factors to consider when deciding to resume operations 05:51
Greater level of patience exercised with a medical practice 08:36
Deal sourcing and where to find opportunities 11:00
Utilizing advisory firms as a referral source 12:50
The value of independent sponsors 14:09
How are lenders thinking about the situation 15:54
Importance of speed 17:38
How are people thinking of valuations 19:19
Speed element in transactions 23:27
Rep and warranty insurance 24:27
Different viewpoints on the impact of the pandemic 29:07
More attention on distressed deals 31:58
Quick reformation of pricing process, BD, and diligence 33:16
We appreciate you joining us on this episode of Across the Table. To learn more about today's discussion or to contact us, please visit our website at mcguirewoods.com.
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