Businesses numbering in the hundreds that have undergone bankruptcy and are owned by hedge funds and others have been rehabilitated and are now for sale. Formerly bankrupt companies in San Diego and in other markets across the country have in many cases become desirable merger and acquisition targets. The primary market sectors involved are auto parts, media, chemicals and technology.

Many of the companies that are slotted to be sold are famous brand name companies. As they have come out of their bankruptcies more as robust concerns with growing markets, investment bankers feel that there will be strong demand for them.

One auto parts manufacturer is planning an Initial Public Offering shortly and the investment banks believe that it will perform well.

In the media market, bankrupt companies still have large customer bases and hold large franchises. Investment bankers think that merging some of these companies will be a likely outcome when rehabilitation is completed.

Tech companies also are emerging from bankruptcies now, as well as companies in the chemical sector. Hedge fund managers are confident that there are markets for these companies that have been restructured and repurposed.

San Diego mergers and acquisitions attorneys have taken note that new owners of bankrupt companies get costs lower by closing unprofitable or non-strategic divisions, closing down plants and solving issues with unions or other workers. Since hedge funds and other financial institutions owning these companies want to keep their costs low, selling them quickly is a key tactic in their strategy. Thus, making them attractive to buyers is necessary to reach their goal of getting rid of them quickly.

Source: Reuters "Formerly bankrupt companies become M&A targets" Sept. 1, 2011