Bank restructuring creating liquidity in M&A market – Deloitte Legal

Greater financial liquidity in the Spanish market is boosting M&A activity, partly due to domestic banks restructuring and divesting their portfolios, says Sharon Izaguirre, partner at Deloitte Legal.

“There has been greater access to bank financing, so there are better financial conditions for M&A,” says Izaguirre. “The banks have continued with the restructuring of their investment and loan portfolios in order to consolidate their core business – this, among other reasons, including greater confidence in the Spanish market, has encouraged more financing.”
There is also a sense that the nature of the investors and investment targets are also changing, with many finding a middle ground between investing in distressed and healthy companies. “There are some new investors, either private equity or trade buyers, that are carefully looking to Spain – particularly specific industries, such as energy and technology – and are willing to invest in not-so-healthy companies that contribute to synergies within their portfolio or to diversification in their investment approach,” says Izaguirre. “They do not necessarily have to be distressed debt funds – it does not mean they always invest in companies in restructuring or insolvency situations. There is a market between those types of restructuring situations and healthy companies. These new types of investors have taken advantage of this room, applying their expertise and using restructuring mechanisms.”
Ultimately, it is the law firms with strong and well-integrated services and international networks that can best capitalise on this growing and changing demand. “The biggest challenge for law firms lies in their ability to assist investors globally through their entire corporate process with an integrated approach,” says Izaguirre.