Turnaround

A turnaround is the process of restoring a financially or operationally distressed company to viability and growth. It combines short-term stabilisation measures (liquidity management, debt restructuring, loss-making activity closure) with medium-term transformation (operational improvement, strategic repositioning, recapitalisation). In Distressed M&A, specialist turnaround funds acquire distressed companies at discounted prices and create value through successful execution of a turnaround plan — a discipline distinct from traditional private equity buyouts.

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Example: a turnaround fund acquires a French industrial SME in judicial reorganisation for CHF 2.5 million. The 18-month turnaround plan delivers: disposal of loss-making subsidiary (+CHF 800,000 negative EBITDA eliminated), 30% workforce reduction (-CHF 1.2 million annual payroll), supplier contract renegotiation. EBITDA moves from CHF -400,000 to +CHF 1.6 million. The company is sold 3 years later at CHF 9.0 million — a 3.6x return on the initial investment.

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Hectelion supports turnaround fund acquisitions with rapid due diligence and turnaround plan valuation under distressed timelines.