Since its founding in 1972, Houlihan Lokey has made a name for itself when it comes to distressed merger and acquisition and restructuring.
Although investment banks’ rankings, particularly if they are provided by banks themselves, should be taken with a grain of salt, HL’s track record is impressive:
As of January 2021, Houlihan Lokey is the No. 1 global restructuring advisor for the past six consecutive years, the No. 1 global M&A fairness opinion advisor over the past 20 years, and a Top 10 Most Active Global M&A Advisor by Thomson Reuters.
This is not an advertising for HL and all I wanted to convey was that theses folks have got something to say when it comes to distressed M&A and restructuring.
So it shouldn’t surprise you if I tell you that their classic guide “Buying And Selling The Troubled Company” is an essential read on the subject.
The authors have done a great job of using a story to talk about the process and nuances of distressed M&A
This 57-page guide, in a nutshell, is a long case study about a Golf equipment company that buys a competitor and after financial crisis of 2008 (partially because of it and partially because of the management team’s missteps) finds itself in the difficult situation of not being able to pay its debts.
The authors have done a great job of using the story to talk about the process and nuances of preparing a company for sales, evaluating the options and running the bidding process.
At various parts in the document, the authors talk about how valuation and selling a distressed company differs from that of a normal company: I found their tips insightful.
Overall, a great book if you want to venture into “Distressed Value Investing”, pursue careers in distressed investment banking or restructuring consulting.
