Practice Areas & Industries: Buchanan Ingersoll & Rooney PC

Practice/Industry Group Overview

The initial public offering of securities is a landmark event in the development of any company. Buchanan Ingersoll & Rooney's Corporate Finance Group has handled a wide array of IPOs on behalf of both issuers and underwriters. Our attorneys are thoroughly prepared to assist a company in dealing with the pros and cons of life as a public company. Among the benefits of "going public" are:

• The ability to raise a large amount of cash in a single transaction.
• The ability to access future financing. If the stock price performs well, there may be opportunities for secondary offerings. The funds raised in an offering will enhance a company's net worth, which may enable it to borrow on more advantageous terms.
• The source of liquidity for stockholders that the public market can provide.
• The prestige associated with being a public company may benefit business operations.
• The ability to attract and retain key personnel through offering shares or stock options that have a public market.
• The ability to consummate mergers and acquisitions either through the funds derived from offerings or the available securities of the company.

Services Available

While the IPO process can be exhilarating for a company and its management team, a proficient counsel can, in advance of and during the IPO process, assist management in effectively dealing with the drawbacks of going public. These include:

• Loss of confidentiality -- Public ownership means information will be disclosed in the prospectus, as well as in periodic disclosure documents ranging from sales and profit margins to competitive position and executive compensation. Competitors and customers alike will be able to scrutinize a public company's operations.
• Loss of control -- Insiders may be at risk of losing control if a large portion of shares is sold to the public, and equity stakes may be diluted by subsequent offerings as well.
• Loss of flexibility -- The practical limitations of market and shareholder expectations may restrict salaries and "perks" that may have been acceptable in a private company.
• Additional expenses and management effort associated with Securities and Exchange Commission compliance -- The funds and management effort required to effectively consummate an IPO and comply with periodic reporting requirements can be substantial.
• Market price and shareholder expectations -- If shareholders become disenchanted with a public company's performance (i.e., revenues, earnings or market share), the stock price will suffer and management may be tempted to utilize "quick-fix" strategies to respond to shareholder pressures.
• Increased risk of liability -- The fiduciary responsibilities of management to the public shareholders are not to be taken lightly, nor is the scrutiny of the public.

Buchanan's corporate finance attorneys have experience dealing with these and myriad other issues companies and underwriters confront in IPOs and other public offerings. They help cut through and resolve complex issues to bring public offerings to a successful conclusion.