Dual-Track Process - Considerations In Managing A Joint IPO And Sale Exit

WHAT IS A DUAL-TRACK PROCESS?

The "dual-track process," broadly defined, means that a company planning on an exit transaction has chosen to go down the path of conducting an initial public offering while also pursuing a possible M&A exit. Traditionally favored by private equity firms with respect to their portfolio companies, the dual-track process has also gained currency as a possible exit strategy amongst fast-growing, venturebacked technology companies. The M&A side of the dualtrack process is most typically structured as a full-blown auction involving multiple strategic and financial bidders (rather than a direct one-on-one negotiation with a single bidder). However, there can be many variations within the dual-track framework, and careful consideration should be given to process before kick-off.