Survey Predicts European Troubles
The survey completed by AlixPartners identified European commercial real estate and automotive as troubled sectors.
October 15, 2009
As distressed investors have seen an influx of new opportunities over the past year, even more restructuring transactions are anticipated in 2010, according to a study completed by the Chicago, Illinois-headquartered financial consultant AlixPartners.
The firm conducted a survey of restructuring dealmakers, and noted a consensus among the 100 pros interviewed who foresee an increase in restructuring arrangements in Europe.
Among the global pros who participated in the survey, 66 percent predicted that restructuring transaction volume would double in the coming year in contrast to the previous year.
The survey’s participants expected European commercial real estate and automotive industries would face a particularly grim future. One quarter of the pros contacted said the two sectors faced the greatest risk of companies needing to enter into workout situations, while 18 percent of the pros viewed European manufacturing as the sector that would encounter the highest volume of restructurings. In addition, 8 percent had similar expectations for European building and construction industries.
In contrast to the depressed deal flow that many dealmakers have observed over the past year, restructuring firms have experienced an increase in activity. Last years’ survey by the same consulting group noted an expectation among 54 percent of its participants that retail and financial services sectors would encounter many by restructuring situations.
In the past year, retail and consumer companies have faced significant struggles. On Thursday, Sun Capital bought a 60% stake in Lang Holdings in a Chapter 11 bankruptcy sale. Catterton Partners, Inc., formerly the complete owner of the paper products company, now owns a 40 percent stake in the company. Earlier this week, Wilton Brands completed its restructuring process, leaving Deutsche Bank and TowerBrook Capital as majority owners, while GTCR now owns a minority stake.
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