Private Equity Newsletter
Post-IPO Charter Provisions for Portfolio Companies
2005 was a blockbuster year for the IPO exit: In 2005, U.S. private equity funds priced more IPOs of their portfolio companies on U.S. exchanges than in 2003 and 2004 combined.1 According to one industry publication,2 the average portfolio company taken public in 2005 was, at year-end, trading more than 23% higher than its IPO price. In preparation for an initial public offering, a financial sponsor should review the portfolio company’s “legal make-up” (governance, defensive provisions, capital structure, etc.) and consider modifications as appropriate for the company’s new life as a public company.