Yorkville Advisors: Record-Setting Pace Globally for SEDA Transactions
Consecutive Years of Record Deal Flow Highlight Benefits of Standby Equity Distribution Agreements (SEDA)
JERSEY CITY, December 13, 2010 –
Yorkville Advisors, LLC (“Yorkville” or the “Firm”), the US-based alternative investment manager, announces the record deal flow for Standby EquityDistribution Agreements (“SEDAs”). While the worldwide growth of this unique financing solutioncontinues, Yorkville has surpassed the 34 SEDAs it closed in 2009 and recently announced theclosing of the Firm’s 38
SEDA transaction of 2010.A SEDA offers small-to-mid size companies a flexible and cost effective way of raising capital attheir discretion. Pursuant to the terms of the SEDA, a company has the right, but not anobligation, to raise funds in tranches in exchange for the issue of new equity over a definedcommitment period.“The number of deals, the range of industry sectors and the diverse geographic locationunderscore how SEDAs are breaking through to become a mainstream product after building asuccessful track record over the last decade,” said Mark Angelo, Founder and President ofYorkville.“The diversity of companies that have done SEDAs – shown through their varied industry sectorsand locations around the globe – illustrates the value and the mainstream appeal of the SEDAstructure over other financing solutions. This is particularly true among the increasing number oflarger 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 since2001. In 2009, Yorkville completed transactions in 13 countries, including 7 deals in the UK, 6 inAustralia and 4 each in Singapore and Israel. International activity continues to be strong as theFirm has already closed 5 deals each in Australia and Canada along with 3 deals in Israel thisyear. Many countries continue to welcome this innovative type of financing, as companies arelooking for solutions to fuel the need for capital. One such example is a recent transaction withLST Capital S.A., a financial services company listed on the Warsaw Exchange, which closed a€3 million SEDA in September 2010.In the Asia Pacific Region, the SEDA has been very well received as it has seen the largestnumber of transactions since 2009. A total of 16 deals have closed in the region since 2009 withcompanies 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 PacificRegion which are looking to ensure the availability of long-term capital to help their developmentand capital needs. The current environment is presenting small to mid-size company’s limitedavenues in the Asia Pacific Region to obtain the necessary working capital to acquire competitorsor upstream/downstream assets to develop their existing businesses. The SEDA provides theseCompanies with the necessary capital they need when traditional sources of lending are notreadily available,” said Anthony Chan, Managing Director and Head of Asia at Yorkville HK.The below chart tracks the performance of companies that have current SEDA Agreements incomparison to the MSCI World Index and the MSCI Small Cap Index.