Bank's financing reluctance is forcing dealmakers to search
for alternative financing methods with new contract
stipulations. Since banks began to pull back on lending at the
end of August 2008, buyers have explored private investments in
public equity (Pipe) and stock-for-stock transactions. These
methods may be well-known by name, but the strategic and
long-term provisions investors demand are products of the
"To some extent the Pipe activity may be there to help the
M&A market," says Michael Schwamm, partner at Duane Morris.
"There has been an up-tick in non-traditional Pipe deals."
Pipes and stock-for-stock transactions are quickly becoming the
only way to raise capital for deals.
Stories from the front line
Reports of collapsed deals get daily mention in M&A
circles. One New York partner says a client's purchase recently
failed when the buyer was refused a $400 million loan with $200