Finding the right route to getting business back on track

Katharine Byrne, Partner and Head of Corporate Finance, and David O'Connor, Partner, Corporate Recovery, featured in the Sunday Business Post. To read more about Katharine and David's outlook for BDO in the M&A and Corporate Recovery landscape, click here.

Industry across every sector has been affected by recent global events and while businesses have begun to open up again and things are getting back to normal, there has been a lot of upheaval and many companies will be seeking advice from experts on how to get their business back on track and looking towards the future.

Katharine Byrne, Partner and Head of the Corporate Finance Team at BDO, says that the past 18 months have been some of the busiest on record with a continued increase in mergers and acquisitions and it doesn’t look set to change any time soon. “Looking ahead, we anticipate M&A activity to remain strong for the remainder of the year,” she said. “While there may be some slowdown during the summer months, it is expected that the easing of lockdown restrictions will result in a significant increase in consumer spend which will drive a lot of consolidation and investment activity across the consumer and leisure sectors."

“However, we also expect an increase in accelerated M&A as government Covid supports are withdrawn, funders of distressed businesses look to restructure, and buyers seek out opportunistic deals.”

Katharine, who has specialised in Corporate Finance for the past 20 years, says it is important for companies to be aware of what may be best suited to their particular situation."

“The financing landscape for Irish companies has undergone significant change over the past five years,” she said. “Having moved away from over-dependence on bank debt, we now have a broad range of Irish and international funding providers offering alternative debt, asset financing, venture capital, growth capital and private equity. Structured bonds and SPACs are also expected to be a continuing feature of M&A activity over the next 12 months as they look to deploy significant amounts of capital."

“So it is hugely important for management teams to be aware of all the funding options available and to ensure that they assess and understand what each funding partner is offering before they agree on terms.”

David O’Connor, former chairperson of RII and partner in BDO Corporate Advisory Group specialising in Advisory, Restructuring and Insolvency, says Covid has created a significant challenge for Irish companies – but time is of the essence when it comes to putting recovery plans in place. “For any restructuring option to work, management needs to act quickly and decisively,” he said. “From early analysis to strategic engagement with critical stakeholders, much can be done to safeguard the enterprise. The outcome of this will hopefully give management several options and guide them to the restructuring option which will
benefit their business – be that consensual or non-consensual."

“And options can be as simple as restructuring banking facilities, negotiating leases to a position which works both for the business and the landlord or agreed instalment arrangement with creditors.”

Content adapted from the Sunday Business Post.

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