JERSEY CITY, N.J., April 4, 2011 /PRNewswire/ -- After consecutive years of record deal flow, a niche financing tool targeted to small and mid-size companies has proven its value as an alternative financial instrument over the last 10 years. Pioneered in 2001 by Yorkville Advisors, LLC, the SEDA offers a flexible and cost effective way of raising capital allowing companies to customize their approach to capital and risk management.
The popularity of SEDAs is growing as evidenced by the 75 SEDA deals closed in 2009 and 2010 with 40 in 2010 alone – the most ever in a single year. The SEDA can be employed by various companies across diverse industry sectors, such as healthcare, mining and energy highlighting the majority of the deal flow in the last few years. In addition, a number of SEDAs have been utilized by companies in each of the technology media & telecommunication (TMT), real estate and finance sectors.
SEDAs have become popular internationally, with transactions closed in 22 countries since 2001. In 2010 alone, SEDAs were closed in 13 countries - including 15 transactions in Europe. In the last few years, the SEDA has been well received in the Asia Pacific Region, as evidenced by the nine deals closed in 2010 with companies listed on the Singapore, Korea, Hong Kong and Australia exchanges.
"By enhancing the liquidity of stock in a controlled and measured way, SEDAs can broaden a company's investor base. The flexibility to raise funds in incremental amounts provides a mechanism for the company to effectively cost-average down its capital, minimizing dilution to its shareholders, which provides additional leverage during strategic negotiations," said Mark Angelo, President of Yorkville Advisors.
The terms of a SEDA allow companies the right, but not the obligation, to raise funds in tranches in exchange for the issue of new equity over a defined commitment period. This enables companies an ability to draw down funds as needed. The company may set a minimum price at which it will offer shares under the SEDA, providing a safety net during a downturn. Under the terms of the SEDA, Yorkville is obligated to buy the shares regardless of the economic environment.
SEDAs enable companies to raise money opportunistically and on their own terms, offering a competitive edge. According to one of Yorkville's Managing Members, Jerry Eicke, SEDAs are "useful for companies experiencing increased market volatility and trading volumes because they can react quickly and take advantage of favorable circumstances, such as an increase in share price or potential acquisition."
So far in 2011, Yorkville has continued to see record deal flow and has expanded its global reach by closing its first transaction in Turkey.
About Yorkville Advisors
Yorkville Advisors, LLC is an alternative investment manager and provider of specialty financing solutions, based in Jersey City, NJ with offices worldwide.
Founded in January 2001 by Mark Angelo, Yorkville specializes in providing flexible, innovative debt and equity investments and financing in publicly listed companies in a variety of sectors including energy, mining, technology media & telecommunication (TMT), healthcare and shipping.
Yorkville tailors its financings according to each company's need and offers a mix of debt structures, bridge financings, asset backed loans, equity facilities and, in some cases, equity injections.
For more information about Yorkville or the SEDA, please visit www.yorkvilleadvisors.com or contact us at 201-985-8300. Yorkville has offices in Jersey City, New Jersey; Jupiter, Florida; Denver, Colorado; London and Hong Kong as well as a joint venture agreement in Milan, Italy.
The information contained herein is for informational purposes only and is not intended to be, nor shall it be, construed as legal, tax or investment advice or as an offer, or the solicitation of any offer, to buy or sell any securities. Before making an investment in any security, you should thoroughly review with your legal, tax and investment advisors to determine whether an investment is suitable for you in light of your investment objectives and financial situation.
SOURCE Yorkville Advisors