Advantages of a Merger With Legato III
Benefits Versus an IPO
- Obtain a public currency without going through a time consuming, costly, and uncertain IPO
- You will know the deal consideration (your selling price) at the beginning of the process rather than at the end (day before listing)
- Expedited public listing with lower transaction costs
- Potential closing of the “IPO Window” is not an issue since Legato is already public
- Legato’s management team has a successful record of completing SPAC transactions
- Unlike an IPO underwriter, Legato’s board and management team are highly motivated to see your stock price continue to appreciate after the transaction is closed
- Flexible deal structure - Legato has the ability to use cash, debt, common stock, preferred stock, contingent consideration, or any combination of these to structure a transaction that works for all parties
- Flexible deal structure - Unlike a traditional IPO, Allegro can structure a deal with contingent earn-out consideration, which can result in a significantly higher effective price
Benefits Versus Private Equity
- Create a liquidity event for the owners while allowing them to maintain control
- Private equity purchasers often seek a controlling interest in the entity while Legato can structure a deal that allows the current owners of the company to maintain control
- A transaction with Legato would likely result in a cash infusion, rather than a heavily leveraged balance sheet typical of a private equity transaction
- Less leverage allows management to focus on growing the business, not making interest payments and paying down debt
- A transaction with Legato would provide greater upside to the our merger partner because they will own a significant portion of the public entity and therefore maintain a substantial interest in the upside of the business
- All of the advantages typical of a public company, such as greater access to capital (debt and equity), an acquisition currency, increased profile/awareness and greater employee retention and incentive through options
Benefits Versus Strategic Sale
- Create a liquidity event for the owners while allowing them to maintain control
- Strategic buyers often downsize the organization and eliminate much of the senior management team
- Our merger partner will own a significant portion of the public entity and maintain a substantive interest in the upside of the business
- The company’s legacy can continue as a public entity
- All of the advantages typical of a public company, such as greater access to capital (debt and equity), an acquisition currency, increased profile/awareness and greater employee retention and incentive through options
