MORE than one in five mergers and acquisitions (M&A) in the North West now involve businesses in distress, according to new research.

The study, carried out by data provider Corpfin, in conjunction with insolvency trade body R3, shows that distressed deals are at their highest level in recent years.

It indicates that businesses with access to acquisition finance are taking the opportunity to build their portfolio and grow market share, says R3.

Of the 115 deals in the region during the third quarter of 2009, 25 involved companies acquired out of administration or other formal insolvency procedures.

The level was more than double that of the same period in 2008, when just 12 out of 130 deals involved distressed businesses.

Corpfin’s data shows the number of distressed deals has been gradually rising over the past three years.

During the whole of 2008, there were just 24 insolvency deals, out of a total of 646, while, in the first three quarters of this year, there have been 58 insolvency deals out of a total of 347.

Matt Dunham, North West regional chair of R3, said: “We predicted earlier this year that autumn would be an ideal time to start to acquire businesses in distress, and these figures seem to bear that out.”