London and St. Paul, MN – Restructuring and turnaround teams are bulking up their staff numbers ahead of an anticipated increase of activity in 2009 according to new research conducted amongst M&A advisers, by Acquisitions Monthly on behalf of Merrill DataSite® – the acknowledged leading global supplier of Virtual Data Rooms (VDRs).

According to the study amongst 200 dealmakers, 54 per cent of those surveyed believed that specialist restructuring and turnaround teams were actively recruiting ahead of 2009 activity, bucking the trend of shedding City staff. In contrast, only one in five (19 per cent) of respondents took a more pessimistic view on the prospects for employment in the M&A sector.

Additionally, almost half (46 per cent) of respondents predicted that the current credit freeze would come to an end between the second and fourth quarters of 2009. A third (29 per cent) were less optimistic and believed that it would take until 2010, while one in ten (10 per cent) suggested that current difficulties were unlikely to ease until 2011.

Respondents were particularly positive on the outlook for the healthcare sector as an area likely to recover quickly from an M&A perspective in the coming months, with almost a quarter (23 per cent) of respondents’ votes. Perhaps surprisingly given the instability and recent government bailouts, the banking sector was tipped as the second most likely area of recovery with 14 per cent of votes. Two other areas widely tipped were consumer goods (13 per cent) and engineering (10 per cent).

There was widespread agreement (72 per cent) that, EBITDA to debt ratios were likely to be lower than last year, reflecting the widespread consensus amongst economic commentators that deals have been over-leveraged in recent years.

Zac Brech, M&A Managing Director at Credit Suisse, said: "We’re going to see a new approach to risk with dealmakers increasing the time they take to assess the outlook of target companies’ growth and while debt is harder to come by in the short-term there are still those, particularly in the corporate world, with money to invest."

Andy Currie, Founder and Managing Partner of Catalyst Corporate Finance: "Deal makers are increasingly looking at important value factors such as the management teams of potential targets; in the mid-market these teams are often crucial to the success of deals."

Peter Westwood, of Beyond the Deal and a former Director of E.ON: "We’ve seen a period of panic but people are now starting to look at opportunities again. Before the current financial instability, due diligence pressure had been on doing deals at pace but now company cultural factors are likely to play far more of a role."

Merlin Piscitelli, Director at Merrill DataSite®, said: "We’re seeing a continued demand for virtual data rooms indicating that many are still very interested in buy and sell side opportunities. But, there’s been a fundamental shift in the amount of risk companies are willing to take on and an even greater sense of urgency placed on due diligence. Virtual data rooms empower dealmakers to quickly and efficiently gain keen insights into the potential of a given deal and determine whether it aligns with their strategic goals."

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Patrick Evans / Peter Marcus - Citigate Dewe Rogerson
Tel: +44 20 7282 2913

Merlin Piscitelli - Director, Merrill DataSite®
Tel: +44 917 761438