Our Focus - Direct Equity Placements
A robust and diverse U.S. and global economy is creating numerous fundamental opportunities among micro-cap and small-cap public companies. However, under current market conditions a public company seeking equity capital must look beyond traditional retail secondary public offerings as these sources of funding have been severely curtailed in recent years. Today, direct equity placements, also known as private placements in public equities (PIPEs), have become the overriding choice of financing for most public companies.
Direct investment transactions provide greater control and discretion in raising capital. Confidentiality, combined with reduced expenses and paperwork, less management time away from day-to-day operations, and greater flexibility in the process, are all important considerations that highlight the suitability of direct investments as an effective means of securing capital.
Success calls for a financial partner that has well-established relationships with institutional and accredited individual investors. TerraNova meets this criteria, and our investor base is actively seeking direct investment opportunities with growth-oriented companies demonstrating clear revenue momentum, a strong business plan, and high quality management.
Access to the U.S. Public Capital Markets
Our team of financial professionals will customize and arrange a private placement that will result in a quick, flexible, and cost-effective funding, which will enable your company to grow, build cash reserves, and ultimately enhance shareholder value. We are among the most active small investment banks in the country, having closed over 30 equity placements since 2003 totaling approximately $325 million in capital raised. Please click on
Transaction History for a complete list of companies funded by European American Equities, Ltd., or its predecessor TN Capital Equities, Ltd.
Our Public Capital Markets team offers the following expertise:
-
A focus on emerging growth companies with market caps below $250 million;
-
Excellent relationships with US and global investors that are active in private placements for micro and small-cap companies trading on U.S. public markets;
-
Discreet and targeted banking, and a fast funding process;
-
Frequently used capital structures include; Common Stock, Convertible Preferred Stock, Convertible Debentures, and Convertible Asset-based Credit Facilities;
-
Comprehensive support to Chinese companies seeking access to the US public markets. With a presence in Mainland China and Hong Kong, we have the ability to provide extensive advisory services, research, and investment banking to support funding valuations. Please click on
Global Markets for more details.
-
Advisory Services
Building shareholder value is arguably the most important objective in operating a public company.
In order to build a sound base for long-term growth, our Public Capital Markets team works closely with its clients to decide on the form of security, the amount of capital required, and the most productive use of proceeds. We will assess a client's requirements and balance these with the expectations of the financial markets, helping to set appropriate offering terms and conditions.
Whether your company is considering a direct equity investment, an Alternative Public Offering such as a reverse merger, or the identification of a strategic partner/investor, TerraNova will assist and advise on the transaction requirements by providing a thorough, creative, and customized approach:
- Work with management to determine the amount and structure of the capital raise
- Prepare company background materials including information memoranda and PowerPoint presentations for potential investors
- Serve as the financial advisor and investment banker for the direct equity placement
- Provide assistance with legal, accounting, due diligence, and negotiations
- Locate suitable market makers, investor relations firms, and present options for research coverage
Alternative Public Offerings (APO)
An Alternative Public Offering is a process by which a private company goes public by completing a reverse merger with an existing non-operating public company (a "public shell") and simultaneously raises equity capital via a private placement. With traditional Initial Public Offerings (IPOs) now available only to larger more mature private companies, APOs have become a well-regarded strategy to go public and raise capital for fast-growing private companies that have the right management, and the fundamental and financial profiles to be successful as public entities.
The respective merits for a company remaining private or going public are company-specific, and TerraNova can assist a company in such an evaluation. If the decision is made to become a publicly traded company, the advantages of an APO and the resulting public status include:
- Less risk, less time, and lower cost: An APO allows a private company to become a listed company more quickly and with less market risk than through an IPO. The cost of the reverse merger portion of the APO (the acquisition of the shell and the associated filing requirements) is significantly less than what an initial public offering (IPO) would require.
- Equity Capitalization: An APO results in a simultaneous going-public and capitalization event, with the majority of the capital raised coming from institutional investors.
- Stock as Currency: A well-traded public stock creates the currency to implement a company's acquisition strategy, reduce debt, or otherwise strengthen its balance sheet.
- Higher value: Once listed, public companies typically gain higher valuations than comparable private enterprises.
- Access to the public capital market: Becoming a listed public company facilitates the capital raising process and provides access to institutional investors that can only invest in public companies.
- Broader investor base: A public company has the opportunity to increase its investor base and has a greater opportunity to sell shares to a wide range of investors, both institutional as well as retail.
- Employee Incentives: Being public provides management executives the ability to offer employee incentives in the form of stock options.
TerraNova can assist clients with every step of the APO process:
- Identify and negotiate for the "public shell" company;
- Serve as investment banker for the associated private equity placement;
- Select and work with the legal and accounting firms necessary to structure the merger, and to comply with the SEC filing requirements to become a publicly traded entity;
- Select and obtain the most appropriate exchange listing (AMEX, NASDAQ, OTCBB);
- Assist the company to develop an actively trading shareholder base.
