Venture capitalists have been talking a lot about ‘Pipe’ deals recently. So far in Europe, it has been largely talk, although many say that they will consider taking a stake in a quoted company (a Private Investment in Public Equity, or Pipe) in the next 12 months. If you believe that Europe will follow the pattern in the US, an explosion of these deals might be expected.
And it could be a marriage made in heaven. Listed high growth companies need cash and they cannot raise it from the public markets. Buy-out houses, always on the look out for attractive valuations and strategic influence, are under pressure to invest. Pipes offer them the chance to get together. On the face of it, both sides could find the relationship profitable.
