Introducing: the strategic Pipe

Author: | Published: 1 Mar 2009

Kyle Siskey
Americas reporter

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 modern market.

"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.

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