Deals Closing, But…

As mentioned a few weeks ago, things are picking up. Deals that were languishing or almost dying have come back to life and are actually getting closed. We are completing several reverse mergers in my office this week, complete with contemporaneous financings.

What next? That’s the big question. Some are suggesting (including some lawyer colleagues I was with last night) that PIPE funds have little or no money allocated for new transactions between now and the end of the year. Some feel we need to get past the US elections. Others believe we need to wait for the stock markets to stabilize more, despite some recent positive days. One client simply said to me, after this deal I just don’t know what is next.

Consensus seems to be we will see a deal slowdown until early next year. I do think that reverse merger deals that need to close by year end pretty much would have started already. But we often start deals this time of year that are not slated to close until early in the next year, so we’ll see what happens! I think we will finish the year close to last year in terms of number of reverse mergers completed, but I expect there will be meaningfully fewer deals with contemporaneous financings, and where a financing is present, the average size will be down.

Feel free to comment here on what you are seeing…

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