PIPEs (Private Investment in Public Equity), are privately negotiated transactions between a public company and an investor, and can include ordinary shares, preferred shares, convertible debt or warrants at various rates. They enable companies to raise cash quickly and give investors the ability to acquire stakes in listed companies, often at a discount, without many of the hurdles that go along with a typical acquisition or merger. The market for PIPEs is growing as dealmakers look for additional paths to liquidity during the Covid-19 pandemic.
As current market conditions have left some investors looking at tough paths to exits, some of the world’s top companies are using PIPEs now more than ever, and even some large Private Equity firms are taking stakes in companies through PIPEs. As the global pandemic continues to put pressure on balance sheets and investors seek greater liquidity, will this trend continue? In a time of depressed valuations, what challenges can dealmakers expect to see when negotiating these transactions? This panel will explore the benefits of PIPEs to both companies and investors and examine the nuances that make these transactions different from typical M&A deals, plus the novel potential to utilize representations and warranties (R&W) insurance on PIPEs in certain situations.
Dan Howard is a senior vice president on Aon’s Transaction Solutions team. Dan is based in Toronto and is further supported by a New York-based team of professionals in North America and colleagues in London, Hong Kong, Sydney and Bermuda who focus exclusively on transactional risk transfer.
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In September 2022, the deals and dealmakers shaping the Deal Economy will be celebrated in the latest installment of The Deal Awards. In line with its mission of providing forward-looking intelligence across mergers and acquisitions, private equity, activism and restructuring, the Awards seek to recognize and celebrate the advisers, firms and banks driving the market forward.