A private investment firm's, mutual fund's or other qualified investors' purchase of stock in a company at a discount to the current market value per share for the purpose of raising capital. There are two main types of PIPEs - traditional and structured. A traditional PIPE is one in which stock, either common or preferred, is issued at a set price to raise capital for the issuer. A structured PIPE, on the other hand, issues convertible debt (common or preferred shares).
This financing technique is popular due to the relative efficiency in time and cost of PIPEs, compared to more traditional forms of financing such as secondary offerings. In a PIPE offering there are less regulatory issues with the SEC and there is also no need for an expensive roadshow, lowering both the costs and time it takes to receive capital. PIPEs are great for small- to medium-sized public companies, which have a hard time accessing more traditional forms of equity financing.
Deal Evaluation Criteria :
Structure : Our investor seeks control or minority interests (via preferred stock or convertibles) by making direct investments in basic manufacturing and service businesses.
Size :Company focuses on small & middle market transactions (US$ 30-150 MM in revenues) and US$ 10-100 MM in value.
Management Team :Company only invests after identifying management teams with world-class expertise and capability and providing them with the tools to excel
Characteristics :Company values asset intensive opportunities which allow us to use prudent leverage while protecting and preserving principal investment.
Stage : Company primarily deploys capital in late stage or expansion situations in companies with at least 3-5 years of history but is opportunistic in terms of its strategies.
Our Process :
Company structures, executes and monitors its transactions.
Company believes that due diligence on people is very important. Accounting, legal and operational due diligence provide our principals with only part of the picture.
Company has been consistently successful in aligning the goals of all constituencies involved in a transaction before and during the holding period.
Company takes an active role in its portfolio companies providing not only strategic and tactical direction but also an expanded professional network for our companies to leverage.
Company is in the business of capital appreciation and analyzes exit options long before it deploys capital into any of its investment.
Company transactional structures span a wide array of risk-mitigated instruments and the firm constantly seeks alternative and new ways to create value.
Company provides post-transactional support to further enhance the long-term success of portfolio companies and the firm's investors.
Control Investments : Company acquires majority stakes in operating companies by recapitalizing balance sheets, executing management or leveraged buyouts, carving out assets, or outright acquisition of controlling shareholder's interests with equity. Company prefers to partner with the management teams and operators and with them execute strategic plans and create value.
Minority Investments : Company places capital into public and private companies that use the investment to fund growth, expansion, or restructurings. Minority placements enable companies to tap into alternative sources of capital, especially important when public market offerings are either not possible or accessible at a very high cost.
FOR PRIVATE COMPANY :
Growth Capital :
We invest in private companies that can benefit from the backing of a multi-billion dollar, multi-national investor who specializes in companies with market values below $200 million. Company has invested in 20+ countries and are experts at building growth through cross-border relationships.
Early Stage Financing :
Company invest in early stage companies and those with EBITDA below $3 million USD generally through a Pass Through Structure. The Pass Through means Company invests in a public company which "passes through” part or all of the funds to the private company. This structure works best for cross border relationships between the private and public companies.
This is a good fit for Companies that can benefit from:
Distribution of their products beyond their current geographic area of sales
An alliance strategy for geographic expansion
The financial strength of an institutional, multi-national investor
A more global presence and market perception
Direct Listing / IPO :
Company invest in companies concurrently with an IPO or listing on a stock exchange. The Deutsche Borse currently provides the fastest, least expensive, and least burdensome listing process. This process is particularly effective when the company has or can create a strong investor following. For a qualified company with audited financial statements, company can invest and complete a direct public listing in 21 days with a business plan. A Deutsche Borse listing can be an intermediate step to a co-listing on any other exchange such as the Hong Kong, AIM, Bombay, NASDAQ, or NYSE.
This is a good fit for Companies that can benefit from:
Exposure to investor bases from the EU, Asia, and the Middle East
A stock currency for growth by acquisition
A more global presence and market perception
Exposure to institutional investors without overly cumbersome compliance burdens
Cash Out To Shareholders :
Company invest in change of control transactions to provide cash to existing shareholders. Partial cash out solutions can provide the comfort of immediate liquidity and diversification while maximizing the final cash realized from the business by growing the business with an institutional partner and maximizing the value of the retained interest,
A good fit for shareholders that can benefit from:
Liquidity for their investment in building the business
Having the resources of multi-billion dollar, multi-national investor to grow through acquisitions and/or organically
Achieving a critical mass to subsequently sell to a large acquirer at high multiples, especially Asian or European strategic buyers
Company seeking finance should submit the following details :
