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Wednesday
Aug122009

Ultimate Supply Contingency Plan - Buy your Supplier

With many companies facing significant financial difficulty, distressed M&A deals have soared.

Bank of America Merrill Lynch estimates that about $145 billion in debt could default this year, followed by about $130 billion next year and $120 billion the year after. Default rates are hovering around 10%, up from around 4% in 2008 and less than 1% in 2007, when credit was easy and the economy strong.

The potential exists to get a fantastic deal through a distressed M&A deal. The ultimate contingency plan to ensure supply, should you be hugely dependent upon your supplier, is to buy the business.

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