Securities & Exchange Commission (SEC)

Private Investment in U.S. Public Equity: Overview of Considerations, Mechanics and Strategies

A private investment in public equity (PIPE) transaction is a privately negotiated sale of a public issuer’s equity or equity-linked securities to an investor, under which an issuer typically files a resale registration statement with the SEC to enable the PIPE investor to resell the PIPE securities in the public markets, from time to time.

A PIPE allows a public company to raise alternative financing via a private placement of securities to an accredited investor. This form of privately negotiated capital raise is often undertaken at a time when an issuer’s shares are undervalued or it encounters short-term liquidity issues, including when conventional financing sources may not be readily available.

This presentation provides an overview of the considerations, mechanics and strategies involved for a financial sponsor when executing a PIPE transaction in the United States. The presentation covers:

  • The attractiveness of PIPEs in periods of economic volatility
  • Key value protections
  • Deal timing: structuring considerations
  • Governance rights
  • Resale registration rights
  • Issuer protections
  • Public disclosures
  • Key documents
  • Tear sheet of key issues and considerations and selected PIPEs

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