Yorkville Advisors: Record-Setting Pace Globally for SEDA Transactions
Consecutive Years of Record Deal Flow Highlight Benefits of Standby Equity Distribution Agreements (SEDA)
Dec 13, 2010, 12:30 ET
JERSEY CITY, N.J., Dec. 13, 2010 /PRNewswire/ -- Yorkville Advisors, LLC ("Yorkville" or the "Firm"), the US-based alternative investment manager, announced today the record deal flow for Standby Equity Distribution Agreements ("SEDAs"). While the worldwide growth of this unique financing solution continues, Yorkville has surpassed the 34 SEDAs it closed in 2009 and recently announced the closing of the Firm's 38th SEDA transaction of 2010.
A SEDA offers small-to-mid size companies a flexible and cost effective way of raising capital at their discretion. Pursuant to the terms of the SEDA, a company has the right, but not an obligation, to raise funds in tranches in exchange for the issue of new equity over a defined commitment period.
"The number of deals, the range of industry sectors and the diverse geographic location underscore how SEDAs are breaking through to become a mainstream product after building a successful track record over the last decade," said Mark Angelo, Founder and President of Yorkville.
"The diversity of companies that have done SEDAs – shown through their varied industry sectors and locations around the globe – illustrates the value and the mainstream appeal of the SEDA structure over other financing solutions. This is particularly true among the increasing number of larger cap companies who have a broader range of options and yet have still chosen SEDAs," said Jerry Eicke, Managing Member of Yorkville.
SEDAs have become popular internationally, as evidenced by transactions in 21 countries since 2001. In 2009, Yorkville completed transactions in 13 countries, including seven (7) deals in the UK, six (6) in Australia and four (4) each in Singapore and Israel. International activity continues to be strong as the Firm has already closed five (5) deals each in Australia and Canada along with three (3) deals in Israel this year. Many countries continue to welcome this innovative type of financing, as companies are looking for solutions to fuel the need for capital. One such example is a recent transaction with LST Capital S.A., a financial services company listed on the Warsaw Exchange, which closed a PLN 43 million (approximately USD$14 million) SEDA in November 2010.
In the Asia Pacific Region, the SEDA has been very well received as it has seen the largest number of transactions since 2009. A total of 16 deals have closed in the region since 2009 with companies listed in Singapore, Korea, Hong Kong and Australia Exchanges.
"We continue to see a lot of appetite from small and mid-size companies in the Asia Pacific Region which are looking to ensure the availability of long-term capital to help their development and capital needs. The current environment is presenting small to mid-size company's limited avenues in the Asia Pacific Region to obtain the necessary working capital to acquire competitors or upstream/downstream assets to develop their existing businesses. The SEDA provides these Companies with the necessary capital they need when traditional sources of lending are not readily available," said Anthony Chan, Managing Director and Head of Asia at Yorkville HK.
Not only has the SEDA been widely accepted worldwide, but its ability to transcend various industry sectors also shows its diversity. Since 2009, transactions in the healthcare, mining and energy industries have lead the surge with 18, 15 and 12, transactions, respectfully. In addition, technology media & telecommunication (TMT) finance and transportation are currently exploring this unique financial instrument.
"The SEDA is particularly well suited for the ongoing cash needs of the vibrant biotech industry," said Dr. Michael J. Nowak, Managing Director and Head of the Healthcare Investment Team at Yorkville, "It provides management capital while bolstering the company's negotiating position in strategic partnership discussions – key to maximizing shareholder value for young biotech companies."
Brian Kinane, Managing Director, Yorkville Advisors UK, said, "We have seen a significant and increasing number of SEDAs across Europe this year. The SEDA is particularly suited to event driven industries, such as mining and oil & gas, as companies seek to raise equity to develop their assets while attempting to minimize dilution."
For more information about Yorkville, 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.
SOURCE Yorkville Advisors, LLC
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