THE DAILY DEAL REPORTS ON TOUGH TIMES FACING MIDDLE-MARKET COMPANIES SEEKING FINANCING

Economic Slowdown Has Chilling Effect On Loan Opportunities For Smaller Businesses

October 12, 2001--New York, N.Y.--While middle-market companies face funding challenges in the best of times, they are now confronting even more serious challenges, notes The Daily Deal (www.thedeal.com) today in its special report, Financing the Middle Market.

Small-to-medium sized businesses account for half of the gross domestic product, and provide three of every four of the nation's jobs. While small companies can turn to venture capital funds for seed money and large companies have the U.S. equity market mechanism, middle-market businesses have to depend on a small number of lending institutions and private equity firms.

"After four or five years of aggressive lending by banks, there's been a pullback ... not only has deal volume dropped from $5 billion to $4 billion, but the market has become more diffuse. In the second half of this year, it has taken the top nine firms to muster up the same deal volume as the top five firms last year," writes Alison Rogers, assistant managing editor of The Daily Deal, in her introductory piece.

Reporter Kelly Holman examines medium-sized companies that are doing financing deals through techniques such as asset-based lending and mezzanine financing. Based on interviews with scores of private equity professionals, he writes, "In the past 10 years, the opportunity for mid-sized companies to raise capital has become more abundant as the number of private equity funds have proliferated by the hundreds." Holman also reports that the events of September 11 and the unfolding war have further complicated the outlook for middle-market lending.

In a Q&A by David A. Gaffen, Dan Donoghue, co-head of the global M&A group at U.S. Bancorp Piper Jaffray, predicts that private equity firms will gravitate toward mid-sized companies that appear ready to merge. James D. Armstrong, chairman and chief executive officer at JDA Software, provides a first-person account of the dealmaking strategy of this mid-sized company in a profile by reporter Baron M. Braccia.

Finally, senior writer Stacy Mosher examines, private investments in public equities (PIPEs), the lifeline for many-middle market businesses and finds both cheerleaders and challengers of this complex financing.

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The Deal, LLC is the leading media company charting the deal economy for dealmakers worldwide. The company provides original news reporting, financial data and commentary on a full spectrum of global transactions and the personalities and politics of dealmakers behind the deals. Through The Daily Deal and TheDeal.com, as well as e-newsletters, newsletters and special reports, The Deal, LLC addresses the information needs of the deal community composed of corporate executives, entrepreneurs, institutional investors, financial intermediaries and advisers. Investors in The Deal, LLC, a privately held company, include majority owner U.S. Equity Partners, a private investment fund sponsored by Wasserstein & Co., LP, and Rustic Canyon Ventures, one of the largest venture capital funds in Southern California.