As seen is Law360’s “PE Funds Keeping Options Open with Dual-Track Exits”
Law360 reports that more private selling companies are turning to dual-track exits as initial public offerings are becoming a better option. The dual-track process lets an entity look for a buyer at a good price while at the same time filing for an IPO in “fickle” public markets.
As the legal news-service explained, this tactic is becoming increasingly popular and more commonly utilized. It can allow for companies to keep their options open and get a faster sale, as private buyers are rushed to make an offer before the public offering. The uptick in dual-track exits is also due to the Jumpstart Our Business Startups (JOBS) Act that took effect in 2012. The JOBS Act allows companies to garner interest from investors before an IPO filing is approved by the SEC.
According to Kaye Scholer Partner Emanuel Cherney, Co-Chair of the Corporate Department, the dual-track process “allows the company to see what kind of pricing they can get in both the private and public market and compare the two.” He added, “It can also be a trigger for people to realize that the company is for sale.”
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