The dual-track exit process—where the company files for an IPO but also pursues an outright sale—is back in style for private equity firms as initial public offerings have again become a viable option after years of financial-crisis malaise.
The recent pickup in U.S. dual-track pursuits has been driven in part by the Jumpstart Our Business Startups Act, which allows companies to file IPO-related documents with regulators confidentially and went into effect in 2012, experts say.
“It allows you to test the water without putting all your financial statements out in the public,” said Howard Berkower, a partner at McCarter & English LLP. “The JOBS Act gives more flexibility, which gives a company leverage in negotiating with buyers.”