Acquisitions of distressed businesses continue to account for a significant proportion of deals in the Midlands but the number has decreased since two years ago, according to new research.

Figures released by Experian Corpfin on behalf of the insolvency trade body R3 show that in the first half of 2011, one in ten acquisitions in the region (20 out of 201) involved a business in administration or other formal insolvency procedure.

This was a similar proportion to 2010 when one in 11 acquisitions (40 out of 460) involved a distressed business, but lower than the peak of activity in 2009 when one in six acquisitions (76 out of 477) was a distressed deal.

R3 Midlands chairman Matthew Hammond, a partner at PwC in the Midlands, said many companies have realised it is a good time to identify potential growth targets.

Mr Hammond said: “Distressed acquisitions have become a key part of the deals landscape over the past three years.

“Investors have been taking the opportunity to acquire businesses and assets while values are low and we have seen the emergence of specialist turnaround investors.

“In recent months, however, there have been fewer corporate bargains and many investors are struggling to access credit to make a purchase.

“Investors who have the money supply should remain alert as we can expect to see a continued supply of decent investment opportunities in the months ahead, despite the recent fall in the number of insolvent deals.”