Stressed M&A

Stressed M&A refers to acquisitions involving companies under financial or operational stress — without necessarily being in formal insolvency proceedings — presenting acquisition opportunities at discounts to going-concern value. It differs from Distressed M&A (formal insolvency) by the absence of a judicial framework — negotiations remain private between seller and acquirer. Typical situations include: liquidity crisis, covenant breach, loss of a major client, strategic reversal or constrained shareholder exit. In M&A, they require enhanced due diligence and uncertainty-adjusted valuation.

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Example: a Swiss distributor in covenant breach (net debt/EBITDA 4.2x vs 3.5x covenant) seeks an urgent buyer. Hectelion supports the strategic acquirer in a 15-working-day due diligence, negotiating an acquisition at 5.5x EBITDA — a 25% discount to market transactions at 7.3x, justified by operational uncertainties and the risk that covenant breach triggers an accelerated repayment demand.

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Hectelion combines analytical speed and valuation rigour in Stressed M&A mandates, delivering defensible value conclusions under constrained timelines.