Transactions & Restructuring

As a combined result of significant investment decisions and adverse market conditions, T&R net sales declined by 2%, even though we saw good growth in Corporate Finance and Transaction Services. Restructuring was better than expected, although down overall. Segmental contribution declined by 11% during the year. Our expectation is that both Transactions and Restructuring activity will pick up when conditions improve.

However, we continue to look to offer our clients expert support and advice through every phase of the economic cycle. We delivered that successfully in 2011 despite a unique set of market conditions.

Mergers & Acquisitions (M&A) activity remained suppressed, with dealmakers finding it hard to identify, evaluate, finance and complete deals.

But usually counter-cyclical restructuring work was also more muted than expected as banks, immersed in their own complex regulatory agenda, opted to ‘extend and amend’ rather than force companies to reschedule their borrowings. We have also seen an increase in the number of companies that are neither able to grow nor in immediate danger of failure.

Increasingly we are working more closely with key global clients, drawing on the strength, depth and reach of our regional and mid-market practices. We do this by blending our Transaction Advisory skills with our deep knowledge of sectors and local markets to offer clients carefully targeted solutions. Working this way is allowing us to operate as a truly pan-European business, with seamless working across borders.

We are also offering clients specialist and topical insights and advice. For example, the establishment of Portfolio Solutions Group is the cornerstone of a global Centre of Excellence in loan portfolio management. Similarly we are building a global Islamic Financing business, identifying this as a significant trend for our clients — particularly those operating in and out of the Middle East.

We recruited people with skills in our priority growth markets, such as FS and ENR. Temporarily redeploying people from Transactions to Restructuring has allowed us to sharpen skills in important areas, such as financial forecasting and due diligence.

The way our business has ridden the cycle is testament to its inherent strength. Our Restructuring business was successful in pushing through an innovative deal to relaunch Aero Inventory out of administration as a web-based global supplier of aircraft parts. We have continued to work on landmark deals including acting as lead financial adviser to Ford in forming a joint venture with Sollers OJSC of Russia, and advising two infrastructure funds managed by Goldman Sachs on their purchase of 80% of Endesa Gas Transmission & Distribution in Spain. In addition, our Debt Advisory practice worked on a number of successful refinancing assignments with major household names such as Britvic, Tate & Lyle, and William Hill.