Distressed Companies Have More Options Than They Realize

DALLAS, March 9 /PRNewswire/ -- Over the past 12 months, a high percentage of M&A transactions involved companies experiencing stress factors — such as declining revenues, shrinking profit margins, loss of customers, or excessive debt load — and many deals resulted in a bankruptcy filing and subsequent sale. However, there were dealmakers managing transactions for distressed companies outside of bankruptcy in 2009, and according to a recent Merger Market survey we can expect most distressed deals in 2010 to occur outside of bankruptcy.

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"Plenty of buyers are willing to take on a turnaround situation," says Pamela Ragon, vice president at Allegiance Capital. "We currently see strategic investors looking to pick up weaker competitors and operationally-focused private equity players also actively pursuing deals."

Ragon, who serves as Dallas Chapter President of the Turnaround Management Association (TMA), will moderate a panel discussion on troubled company transactions March 25th at the joint Dallas meeting of the Association for Corporate Growth (ACG) and the TMA.

"Solidly managed companies with a compelling reason to exist can be successfully marketed and sold, even if they have a negative bottom line," Ragon adds. But she acknowledges that managing successful transactions for distressed companies presents unique challenges.

To help educate the M&A community, the ACG/TMA panel will feature investment bankers, lenders and investors sharing real-world experiences and covering topics such as:

• Identifying cases when bankruptcy is not the best option
• Handling stakeholders with conflicting objectives
• Finding the right group of buyers

"We have handled many challenging assignments with troubled companies throughout the firm's history," said  David Lonsdale, President of Allegiance Capital. "The key to success  lies in discovering the true value of a distressed company, which usually takes tenacity and perseverance."

The March 25th event is entitled, "Acquisitions of Troubled Companies Outside of Bankruptcy" and will begin at 7 am at Dallas' Belo Mansion. To register, visit www.dallasacg.org or www.dallas.turnaround.org.

About Allegiance Capital

Allegiance Capital Corporation is a full-service investment banking firm specializing in the middle market (companies with revenue from $20 million to $500 million), with offices in Chicago, Dallas, New York, Madrid, Minneapolis/St. Paul, Seattle, and Shanghai.  Through its global network, Allegiance Capital assists companies in every aspect of selling and financing a business, including debt restructuring, mezzanine financing, buy out management, strategic partnering, consulting and other related services.  Its Special Situations group handles financial restructuring and distressed mergers and acquisitions.  For more information, refer to the company website: www.allcapcorp.com.

SOURCE Allegiance Capital Corporation