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What is a typical private investment in a public equity (PIPE) transaction?

  • The company sells unregistered common stock to a small group of institutional investors via a private placement.
  • The company generally agrees to file a registration statement with the SEC to register these securities within 30-60 days after the placement.
  • The price per share is at a discount to the recent average price and is negotiated with the investors.
  • Most PIPEs include the issuance of a warrant to purchase additional common stock. The warrant exercise price is generally a modest premium to the placement price.
  • A PIPE transaction can be executed quickly upon completion of due diligence.


Why should a company consider a PIPE?

  • There is no up-front SEC registration
  • Limited risk to the market price of the common stock as the transaction is confidential until it is consummated.
  • The company can increase/decrease the size of the transaction based upon investor interest.
  • New institutional investors become shareholders
  • Limited marketing time and costs.
  • Most transactions can be completed in less than 60 days.

Historical PIPE Transactions


The transactions below were completed by Sutter professionals at other firms prior to their joining Sutter Securities:


  • Acacia Research $19,000,000
  • Citizens, Inc. $12,000,000
  • Cray Research Inc. $23,000,000
  • Hollis-Eden Pharmaceuticals $28,000,000
  • Informix $50,000,000
  • Medscape $47,000,000 (Venture Capital Funding)
  • Mpower Communications $17,470,000
  • NGAS Resources $18,000,000
  • Penguin Computing $20,000,000 (Venture Capital Funding)
  • Verticalnet $9,100,000


2011 - Closed and Definitive Agreement Placements

Security Type (# of placements)

  • Common Stock654
  • Preferred Stock: Convertible87
  • Preferred Stock: non-Convertible7
  • Debt: Convertible125
  • Debt: non-Convertible33
  • Other: Convertible2
  • Prepaid Warrant15
  • Equity Line 78
  • Unknown 1
  • Total 1,121

Security Type ($ milions raised)

  • Common Stock $19,856
  • Preferred Stock: Convertible $2,837
  • Preferred Stock: non-Convertible $64
  • Debt: Convertible $5,410
  • Debt: non-Convertible $977
  • Other: Convertible $1,400
  • Prepaid Warrant $1,164
  • Equity Line $954
  • Unknown $6
  • Total $45,164

Security Type (% of dollars raised)

  • Common Stock 44%
  • Preferred Stock: Convertible 6.3%
  • Preferred Stock: non-Convertible 0.1%
  • Debt: Convertible 12.0%
  • Debt: non-Convertible 2.2%
  • Other: Convertible 3.1%
  • Prepaid Warrant 2.6%
  • Equity Line 2.1%
  • Unknown 0.0%
  • Total 100.0%

Most Active Sectors (# of placements)

  • Metals, Minerals & Stones 158
  • Biotech: Biomedical/Gene 125
  • Pharmaceuticals & Related 108
  • Mining & Related 95
  • Energy: Oil & Gas 94
  • Healthcare: Medical Equipment 58
  • REITS 58
  • Energy: Alternate Sources 35
  • Banks: Commercial 35
  • Electrical Comp. & Equip. 28
  • Total 794

Most Active Sectors ($ milions raised)

  • Energy: Oil & Gas $11,002
  • REITS $6,457
  • Semiconductor & Related $4,790
  • Pharmaceuticals & Related $3,187
  • Telco: Cellular $3,176
  • Biotech: Biomedical/Gene $2,471
  • Metals, Minerals & Stones $1,792
  • Mining & Related $1,105
  • Computers: Misc $1,105
  • Transportation & Related $949
  • Total $35,934

Most Active Sectors (% of dollars raised)

  • Energy: Oil & Gas 24.4%
  • REITS 14.3%
  • Semiconductors & Related 10.6%
  • Pharmaceuticals & Related 7.1%
  • Telco: Cellular 7.0%
  • Biotech: Biomedical/Gene 5.5%
  • Metals, Minerals & Stones 4.0%
  • Computers: Misc. 2.2%
  • Transportation & Related 2.1%
  • Total 79.6%
2010 - Closed and Definitive Agreement Placements

Security Type (# of placements)

  • Common Stock1,073
  • Preferred Stock: Convertible133
  • Preferred Stock: non-Convertible7
  • Debt: Convertible138
  • Debt: non-Convertible30
  • Other: Convertible1
  • Prepaid Warrant29
  • Equity Line 134
  • Unknown 2
  • Total 1,547

Security Type ($ milions raised)

  • Common Stock $26,890
  • Preferred Stock: Convertible $5,974
  • Preferred Stock: non-Convertible $197
  • Debt: Convertible $2,695
  • Debt: non-Convertible $500
  • Other: Convertible $20
  • Prepaid Warrant $1,628
  • Equity Line $1,985
  • Unknown $5
  • Total $39,894

Security Type (% of placements)

  • Common Stock 69.4%
  • Preferred Stock: Convertible 8.6%
  • Preferred Stock: non-Convertible 0.5%
  • Debt: Convertible 8.9%
  • Debt: non-Convertible 1.9%
  • Other: Convertible 0.1%
  • Prepaid Warrant 1.9%
  • Equity Line 8.7%
  • Unknown 0.1%
  • Total 100.0%

Security Type (% of dollars raised)

  • Common Stock 67.4%
  • Preferred Stock: Convertible 15.0%
  • Preferred Stock: non-Convertible 0.5%
  • Debt: Convertible 6.8%
  • Debt: non-Convertible 1.3%
  • Other: Convertible 0.1%
  • Prepaid Warrant 4.1%
  • Equity Line 5.0%
  • Unknown 0.0%
  • Total 100.0%

Most Active Sectors (# of placements)

  • Metals, Minerals & Stones 257
  • Mining & Related 194
  • Energy: Oil & Gas 132
  • Biotech: Biomedical/Gene 126
  • Pharmaceuticals & Related 114
  • Banks: Commercial 83
  • Healthcare: Medical Equipment 75
  • Energy: Alternate Sources 45
  • Electrical Comp. & Equip. 37
  • Food & Related 22
  • Total 1,085

Most Active Sectors ($ milions raised)

  • Energy: Oil & Gas $7,399
  • REITS $7,327
  • Banks: Commercial $3,834
  • Mining & Related $3,218
  • Metals, Minerals & Stones $3,210
  • Biotech: Biomedical/Gene $2,349
  • Electric & Related $1,605
  • Pharmaceuticals & Related $1,547
  • Healthcare: Medical Equipment $571
  • Electrical Comp. & Equip. $560
  • Total $31,620

Most Active Sectors (% of placements)

  • Metals, Minerals & Stones 16.6%
  • Mining & Related 12.5%
  • Energy: Oil & Gas 8.5%
  • Biotech: Biomedical/Gene 8.1%
  • Pharmaceuticals & Related 7.4%
  • Banks: Commercial 5.4%
  • Healthcare: Medical Equipment 4.8%
  • Energy: Alternate Sources 2.9%
  • Electrical Comp. & Equip. 2.4%
  • Food & Related 1.4%
  • Total 70.1%

Most Active Sectors (% of dollars raised)

  • Energy: Oil & Gas18.5%
  • REITS 18.4%
  • Banks: Commercial 9.6%
  • Mining & Related 8.1%
  • Metals, Minerals & Stones 8.0%
  • Biotech: Biomedical/Gene 5.9%
  • Electric & Related 4.0%
  • Pharmaceuticals & Related 3.9%
  • Healthcare: Medical Equipment 1.4%
  • Electrical Comp. & Equip. 1.4%
  • Total 79.3%
2009 - Closed and Definitive Agreement Placements

Security Type (# of placements)

  • Common Stock831
  • Preferred Stock: Convertible 135
  • Preferred Stock: non-Convertible 6
  • Debt: Convertible 144
  • Debt: non-Convertible 60
  • Other: Convertible 3
  • Prepaid Warrant 18
  • Equity Line 74
  • Unknown 1
  • Total 1,272

Security Type ($ milions raised)

  • Common Stock $22,970
  • Preferred Stock: Convertible $7,922
  • Preferred Stock: non-Convertible $380
  • Debt: Convertible $5,082
  • Debt: non-Convertible $2,621
  • Other: Convertible $52
  • Prepaid Warrant $783
  • Equity Line $1,961
  • Unknown $2
  • Total $41,773

Security Type (% of placements)

  • Common Stock 65.3%
  • Preferred Stock: Convertible 10.6%
  • Preferred Stock: non-Convertible 0.5%
  • Debt: Convertible 11.3%
  • Debt: non-Convertible 4.7%
  • Other: Convertible 0.2%
  • Prepaid Warrant 1.4%
  • Equity Line 5.8%
  • Unknown 0.1%
  • Total 100.0%

Security Type (% of dollars raised)

  • Common Stock 55.0%
  • Preferred Stock: Convertible 19.0%
  • Preferred Stock: non-Convertible 0.9%
  • Debt: Convertible 12.2%
  • Debt: non-Convertible 6.3%
  • Other: Convertible 0.1%
  • Prepaid Warrant 1.9%
  • Equity Line 4.7%
  • Unknown 0.0%
  • Total 100.0%

Most Active Sectors (# of placements)

  • Metals, Minerals & Stones 159
  • Biotech: Biomedical/Gene 141
  • Mining & Related 125
  • Pharmaceuticals & Related 112
  • Energy: Oil & Gas 77
  • Healthcare: Medical Equipment 63
  • Energy: Alternate Sources 51
  • Banks: Commercial 47
  • Electrical Comp. & Equip. 34
  • Environmental & Related 27
  • Total 836

Most Active Sectors ($ milions raised)

  • Metals, Minerals & Stones $5,677
  • Chemicals & Related $4,048
  • Financial Services: Investment $2,832
  • Auto/Truck & Related $2,609
  • Biotech: Biomedical/Gene $2,502
  • Pharmaceuticals & Related $2,482
  • Telco: Misc $2,098
  • Mining & Related $1,878
  • Energy: Oil & Gas $1,751
  • Transportation & Related $1,707
  • Total $27,585

Most Active Sectors (% of placements)

  • Metals, Minerals & Stones 12.5%
  • Biotech: Biomedical/Gene 11.1%
  • Mining & Related 9.8%
  • Pharmaceuticals & Related 8.8%
  • Energy: Oil & Gas 6.1%
  • Healthcare: Medical Equipment 5.0%
  • Energy: Alternate Sources 4.0%
  • Banks: Commercial 3.7%
  • Electrical Comp. & Equip. 2.7%
  • Environmental & Related 2.1%
  • Total 65.7%

Most Active Sectors (% of dollars raised)

  • Metals, Minerals & Stones 13.6%
  • Chemicals & Related 9.7%
  • Financial Services: Investment 6.8%
  • Auto/Truck & Related 6.2%
  • Biotech: Biomedical/Gene 6.0%
  • Pharmaceuticals & Related 5.9%
  • Telco: Misc 5.0%
  • Mining & Related 4.5%
  • Energy: Oil & Gas 4.2%
  • Transportation & Related 4.1%
  • Total 66.0%

Data provided by PrivateRaise, a service of DealFlow Media. More information can be found at PrivateRaise.com