Private placements

Practically all of the growing small and mid-sized companies at a certain stage of their expansion need cash in excess of their own operating cash flows. Generally, the need for additional cash injections is dictated by such growth factors as increased sales, geographic expansion, acquisition of smaller competitors and ambition to sustain competitive advantages.

Private placement is one of the most prevalent forms of non-bank financing. It is a direct sale of new equity issued / share ownership in the company to financial investors. Strategic investors are less frequently involved in private placements, as they have no interest in the expansion of existing competitors, and participate in such transactions only under the scenario of taking a subsequent control over competitor’s business.

Private placement advantages include:

  • Raising financing for the company without further increase of its debt burden is especially crucial during the rapid growth stage. Careful and deliberate choice of the investor, who would be able to meet owners’ requirements towards business strategy and work attitude.
  • Increase of corporate control and financial control in the company, since a minority shareholder requires full transparency of the business practices within the company. Having an influential partner / shareholder in a company increases company’s ability to access new markets and provides it with additional competitive edge.

Aquila Capital Group leverages an extensive network of contacts not only in Russian business community but also among Western strategic and financial investors. This, in turn, enables us to efficiently deliver a full range of services (which do not differ that much from the sale of a company) related to private placements projects – from the assessment of the client’s business plan and preparation of information memorandum to organization of an investor roadshow, as well as facilitation of structuring and execution of the deal.