The firm, which focuses on buying struggling companies and doing operational turnarounds, has already completed 26 deals this year, and has 10 other deals under contract or letter of intent that it expects to complete by the end of the year, Leder said at the Reuters Restructuring Summit in New York. Reuters is the publisher of Buyouts.
“The pace of transactions we are looking at actually has increased substantially over the last couple of months,” Leder said. “We’re looking at more deals right now, and have over the last few months, than I think we ever have in our history.”
Completing 36 acquisitions would be the second-highest amount of yearly acquisitions ever for the firm, compared with 39 acquisitions in 2007. The firm typically has been an active buyer, but in 2009 bought just 11 companies and did just 26 deals in 2008.
“The reason for the high level activity is just a lot of pent-up demand on the part of sellers,” Leder said. “Any seller that had a reason to exit a business over the last couple years didn’t really have an opportunity to do so, and now they do.”
Sun Capital, which has about 83 companies in its portfolio at present and oversees about $8 billion in assets, said it has done deals ranging from packaging, chemicals and auto supply to restaurants and clothing this year, reflecting a broad swath of industries still affected by the recession and financial crisis.
At the bargaining table, Leder said he is seeing companies with strong organic growth commanding “great valuations” and when he is selling a portfolio company, he is typically seated across the table from strategic corporate buyers.
In the earlier part of the year Leder said a large portion of the companies his firm bought were coming out of bankruptcy, while now Sun Capital is doing deals out of court.
But even with fewer bankruptcies, it is still tough for small and mid-sized businesses, meaning there is no shortage of potential acquisitions.
“What we find attractive is what we’ve always found attractive—good companies that are not being well-managed,” Leder said. “If we wanted to just buy any distressed company, we could buy 100.”
Emily Chasan is a Reuters correspondent in New York.