Corporate Restructuring Advisory Market

Corporate Restructuring Advisory Market Outlook (2023-2033)

The global corporate restructuring advisory market is expected to reach a valuation of US$ 24.1 billion in 2023. For the forecast period 2023-2033, the market is expected to grow at a CAGR of 6.3% and reach a valuation of US$ 44.5 billion by the end of 2033.

The corporate world, over the past three years, has experienced commotion in the process to manoeuvre around external factors led by COVID as well as wars, which has significantly impacted their performance. To maintain business continuity, companies had to go for large-scale restructuring, and resultantly, demand for corporate restructuring services increased and is likely to remain high for the next eight to twelve quarters.

Report Attributes	Details
Corporate Restructuring Advisory Market Size (2022A)	US$ 22.7 Billion
Estimated Market Value (2023E)	US$ 24.1 Billion
Forecasted Market Value (2033F)	US$ 44.5 Billion
Global Market Growth Rate (2023-2033)	6.3% CAGR
North America Market Share (2022)	~41%
East Asia Market Growth Rate (2023-2033)	~6.8% CAGR
United States Market Growth Rate (2023-2033)	~5.5% CAGR
Key Companies Profiled	Armanino LLP Baker Tilly US, LLP Binder Dijker Otte Crowe Global Deloitte Touche Tohmatsu Limited Ernst & Young Global Limited Evelyn Partners Grant Thornton LLP Haines Watts Group Johnston Carmichael Kearney & Company KPMG International Mazars MHA MacIntyre Hudson Moore Global PwC RSM US LLP UHY Hacker Young

Macroeconomic Factors Shaping Restructuring Market

Corporate restructuring consists of many business activities where a company requires outside or professional commentary. Some of the major reasons for corporate restructuring are financial distress, business expansion, hierarchy of management changes, and legal compliance.

Depending on the reason for restructuring, we can decide whether the particular business restructuring is positive or negative from a business point of view. For example, if the business restructuring is happening due to financial distress, it is a negative sign for the business or an investor. However, if the restructuring is happening due to legal compliance or business expansion, it is considered to be a normal course of action.

Due to the COVID-19 crisis, many companies across the world faced cash flow issues and were not able to recover fully from the same, ultimately leading to acquisition or bankruptcy. Since there was nothing wrong with the company’s business model, many got acquired by large enterprises with great discounts on their valuation.

• Short Term (2023-2026): During COVID, many companies were able to get low interest rate loans to fund their business as both governments and banks were pushing for recovery of the economy. However, things did not go as planned and businesses were not able to recover from the shock of COVID-19, and the impact of the same was witnessed in restructuring deals.
• Medium Term (2026-2029): Amid tight government spending and moderately high interest rates from banks, it will be easy for businesses to carry out operational activities without being profitable for a longer period.
• Long Term (2029-2033): Rising complex business environment and stringent regulatory rules will shape the future of the restructuring advisory market. Rise in the entry of many startups across all domains will push for multiple mergers and acquisitions, resulting in more business for restructuring advisors.

The global corporate restructuring advisory market expanded at a CAGR of 5.6% during the historical period 2018-2023. The market is expected to grow at a CAGR of 6.3% over the next 10 years.

Image contains market share analysis of global corporate restructuring advisory based on type and region. Financial restructuring accounts for more than 1/3 market share.

How Will Both Formal & Informal Restructuring Keep Service Providers Busy?

“Unfavorable Market Conditions”

The beauty of the restructuring industry is that the demand for its services is always there in the market. Any kind of business activity, whether business expansion, a new line of credit, or management changes, needs the services of restructuring advisors.

The overall business environment is currently in turmoil. Reduced government sanction/support, higher rates of interest from lenders, and drought in funding from the private equity space are forcing many companies to either get acquired by a larger company or merge with companies of the same size.

“Increasing M&A Activities”

During 2019-2020, B2B and D2C companies came into the market across different industries with deep funding from private equity and institutional investors. For some time, these companies were able to make a dent in the market share of established players. However, things did not work out as planned, and over a period, they ran out of money and most of these companies were nowhere near to being profitable.

The impact of COVID can be still seen in the funding space, resulting in many notable mergers and acquisitions and a few bankruptcies also. This has enabled an increase in the demand for corporate restructuring services.

One of the biggest notable examples is the WeWork saga, where in 2019, it was valued at US$ 47 billion and was planned for an IPO with the same valuation. Later concerns were raised by some investors/bankers, and as a result, the valuation dropped to a mere US$ 9 billion.

What Challenges are Faced by the Corporate Restructuring Advisory Industry?

“Meeting Client Expectations Within Strict Timelines”

Corporate turnaround and restructuring service market players engage with customers from different industries. All these customers have a unique set of problems and restructuring advisory firms have to deal with each issue in a new and unique way. A Few of the cases brought in by clients are complex and require time and extra effort for the desired solution. But given the strict timelines, many corporate restructuring companies do not take up some projects, resulting in the loss of business.

Restructuring service providers face intense competition as there are several players in the market who are ready to serve clients with lower fees and in a quicker turnaround time. Lack of top talent and increasing consultant salaries are a few other concerns faced by business turnaround advisory firms.

Country-wise Insights

U.S. Corporate Restructuring Industry to Maintain Status as Biggest Market

The U.S. economy is considered to be one of the most pro-business in the world. During COVID also the U.S. government provided financial stimulus to businesses across industries.

Every day, hundreds of businesses open in the U.S., and many of them are able to get financial support from different lenders. Well-established market players with deep pockets are trying to enter into different business domains by the opening of new business units or by acquiring existing companies in the market. The busy capital market, along with the private equity space, will keep the business restructuring market on its toe. In 2022, U.S. businesses spent a total of US$ 8.4 billion, making it the largest corporate restructuring market in the world.

Indian Corporate Restructuring Market Will Witness Fastest Growth

The overall Indian economic environment has been growing steadily despite a global slowdown. In comparison to other major economies of the world, Indian businesses are reporting good topline numbers. Government undertaking companies have been going through a turnaround over the last few years as the current regime is trying to revive struggling PSUs.

Business restructuring by spinning off non-performing business units and management changes are a few of the steps being taken by the government to revive these companies. Such steps have kept turnaround advisory companies busy.

Lack of funding in private investment places has forced many private companies to restructure their current capital structure and raise money via the debt route. The Indian business restructuring advisory market is poised to expand at a CAGR of 7.1% and be one of the fastest-growing markets for turnaround service providers.

Category-wise Insights

Financial Restructuring to Be Most Sought-after Service

Finance is one of the most important elements of any business across all industries. In the wake of the COVID-19 crisis, many companies around the globe faced financial problems and found it difficult to run their business.

Many such companies reached out to business turnaround advisors for help. Financial restructuring consists of contingency planning, distressed M&A planning, and tax & legal restructuring, among others. We saw that M&A activity was at an all-time high in many industry verticals such as retail, consumer goods, and technology.

Out of the total demand for corporate restructuring, financial restructuring accounts for more than 30% market share, and given the complex business condition along with intense competition, it is expected that this segment will swell even more in the future.

Consumer Markets Will Demand Most of These Services

Retail and consumer goods/service companies were the most affected by the COVID-19 crisis, and its impact is still very much visible as many D2C brands have wound up their businesses due to lack of funding or less demand for their product/services.

Even established firms such as Neiman Marcus and JCPenney were not able to sustain themselves and ultimately filed for bankruptcy. Contrary to what it seems, making it a successful business is not that easy in the retail industry. Consumer and retail businesses account for almost 27% of total turnaround advisory services demand. Few of the most common services demanded by retail businesses are bankruptcy support, valuation & modelling, rescue capital advisory, and distressed M&A, among others.

Competitive Landscape

Key corporate restructuring market players are Armanino LLP, Baker Tilly US, LLP, Binder Dijker Otte, Crowe Global, Deloitte Touche Tohmatsu Limited, Ernst & Young Global Limited, Evelyn Partners, Grant Thornton LLP, Haines Watts Group, Johnston Carmichael, Kearney & Company, KPMG International, Mazars, MHA MacIntyre, Hudson Moore Global, PwC, RSM US LLP, and UHY Hacker Young.

The global enterprises restructuring advisory market is highly competitive due to the presence of many small and large enterprises. In terms of value, more than 30% of the total market share has been captured by companies that have multiple locations. The industry has witnessed some notable mergers and acquisitions in the recent past.

• In October 2021, Armanino LLP completed the acquisition of Austin-based accounting firm Holtzman Partners.
• In March 2022, Deloitte Consulting completed the acquisition of BIAS Corporation, a cloud consulting firm.
• In December 2021, Kearney & Company completed the acquisition of Nordic procurement consulting firm Prokura.

Fact.MR has provided detailed information about the providers of corporate restructuring services positioned across regions, revenue growth, and service offering expansion, in the recently published report.

Segmentation of Corporate Restructuring Advisory Industry Research

• By Type :

  • Turnaround
    • Crisis Management
    • Liquidity Management
    • CRO Services, Managed Exit
    • Third Party Credit Risk
    • Working Cap Management
  • Financial Restructuring
    • Lead Financial Restructuring Advisor
    • Contingency Planning
    • Distressed M&A Planning
    • Restructuring Tax & Legal
  • Distressed Debt & Capital Advisory
    • Distressed Debt Advisory
    • Rescue Capital Advisory
    • Valuations & Modelling
    • Portfolio Lead Advisory Services
  • Restructuring Implementation
    • Insolvency
    • Bankruptcy Support
    • Distressed M&A
    • Forensic Investigation

• By End-use Industry :

  • Consumer Markets
  • Energy and Natural Resources
  • BFSI
  • Life Science & Healthcare
  • Media & Telecommunications
  • Technology
  • Others (Not Covered Elsewhere)

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Oceania
  • Middle East & Africa