A technique that is used in reverse mergers in fund raising. More specifically, an operating company combining with a shell company can raise capital at the same time the merger completes, typically through a private investment in private equity (PIPE) or other private placements. The raised capital pays for the expenses of transaction (offering) such as underwriter’s discount, legal and accounting fees, filing fees, etc. Almost half of reverse merger deals involve contemporaneous financing. Some companies prefer to seek an alternative public offering (APO), as opposed to a conventional initial public offering (IPO), which is based on a simultaneous reverse merger and PIPE.
Investment Banking
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