Summary of Post COVID-19 PIPE Deals -
Since the onset of the COVID-19 pandemic and the resulting social distancing guidelines and business shutdowns throughout the U.S., global markets have experienced volatility not seen since the 2008 financial crisis. Beyond the turbulence in public markets, businesses throughout the country and globally are feeling an increasing strain as they grapple with declining revenues, cash flow crunches and, in some cases, the need to increase capital expenditures as work-places implement social distancing practices and/or encourage employees to work from home. As public issuers seek to raise capital to weather the current storm, financial sponsors are increasingly viewing private investments in public equity (PIPEs) as an attractive means to achieve returns in an uncertain environment, and we are seeing a corresponding increase in the number of announced structured equity investments in public issuers.
We have reviewed a selection of seventeen PIPE transactions announced in April through June in which a private equity sponsor made an investment in convertible preferred stock (twelve deals), convertible debt (two deals), non-convertible preferred stock and warrants (two deals) and non-convertible debt and warrants (one deal). Below we highlight certain recurring key points resulting from our review of the PIPE transactions announced since the onset of the COVID-19 crisis.
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