Distressed M&A surge on the way, says Datasite’s Wiley
The post-pandemic conditions could spur a record year for M&A, according to data-room provider Datasite. Distressed deals will come to the fore in the second half of the year – and some will be big.
Rusty Wiley, chief executive of data-room due-diligence platform Datasite, has the kind of focus on statistics and indicators that you might expect, but one datapoint is occupying his mind more than usual.
The percentage of projects being carried out on his platform that are distressed situations is, in normal times, something like 7%. When he looked it up on Friday morning, just before taking Euromoney’s call, it stood at 18%.
“That could very easily get into the high 20s later this year,” he says.
It is a conservative estimate, too, because it is self-reported. Given the confidentiality of the data their systems are handling, Datasite staff don’t have access to the information themselves, but they ask firms launching projects on the platform to categorize them.
“The self-reporting will always understate the distressed deals,” says Wiley. “People are always happy to tell you they are working on a merger. They’re less likely to tell you it’s a bankruptcy.”
We have not yet seen the bulk of restructurings and bankruptcies
Euromoney last caught up with Wiley in June, when the recovery in financing markets – especially in the US – was well under way.