While in Manhattan I spoke with several investment bankers and SEC attorneys about the future of reverse mergers and PIPE’s. Considering the plight of the economy and the swings in the financial markets the general consensus was remarkably positive. Reverse mergers have become increasing global over the last three years and they are now starting to attract investors that previously shied away from such deals. Though US based companies still represent two thirds of the number of reverse mergers each year we are now seeing deals originating out of what is commonly referred to as the BRIC countries – Brazil, Russia, India and China. There have also been some new entries from Vietnam and Korea. These deals come with both substantial upside and downside risk. This is relatively a new game and only a few investment bankers like Ventana Capital Partners have learned how to structure the deals and subsequent financings to mitigate most of the downside risk associated with foreign deals and to protect those who are writing the checks to fund these deals.

Bookmark to: