By Liz Dunshee
With Q1 under our belts, I am revisiting some of the predictions I shared in December from the Berkeley Fall Forum on Corporate Governance. At that time, people were hoping that 2026 would be a year of stability for the political and macroeconomic environment. It hasn’t quite played out that way, but current market uncertainties have bolstered the accuracy of another prediction, which is that dual-track strategies would persist.
As it turns out, we are seeing both new and traditional flavors of these strategies, and it’s becoming more common than ever for companies to include some element of “dual tracking” in their go-public process, especially in the technology and consumer/retail spaces. Done well, it’s a powerful tool – not only because it keeps your options open, but also because each track can inform and strengthen the other.
That said, just because it’s popular doesn’t mean it’s easy. Even the definition of “dual track” is not clear cut. In its traditional context, it means a late-stage private company simultaneously exploring an M&A exit and an IPO. Today, it can also mean cross-over financings, direct listings, reverse mergers and de-SPACs. What was once binary can now be a multi-track process, with different approaches to each of the processes depending on the company’s favored outcome. Not to mention that any way you slice it, a dual-track strategy involves complex workstreams, careful stakeholder management and vigilant attention to confidentiality.
Over on Cooley’s M&A blog, our deal colleagues recently shared this framework to help in-house corporate executives and general counsel at late-stage private companies evaluate, design and execute a successful dual-track process that reflects today’s market realities. Here are four key takeaways:
- Start early. Ensuring maximum optionality means starting preparation for both IPO and M&A earlier than you may think.
- Both tracks must be credible. The timeline will be predominantly driven by the primary desired outcome (i.e., IPO or M&A). But you need to do enough meaningful work in the “second” prong to appear genuinely serious about considering it, and being ready to operate as a public company is a big lift. The key is that both paths must be real, not just a bluff.
- The GC is a critical manager of process and timing. In a dual-track process, the GC sits at the intersection of every workstream – legal, financial, governance, disclosure and stakeholder management. The GC must be the organizational force that keeps both tracks on schedule and credible.
- Leverage your advisors and make sure they are coordinated. The M&A market informs IPO pricing, and vice versa, so coordination between the two banking teams creates better marketing and better outcomes. Get organized with a checklist and actionable items and timelines. Communicate with advisors on a regular basis.
Check out the full blog to understand the mechanics of a dual-track process, as well as key issues that executives and GCs should consider before launching the workstreams. In today’s environment, optionality is everything – and dual tracking, done well, is one of the best ways to preserve it. If you are weighing your exit strategy and want to think through the framework with people who have been in the room, our capital markets and M&A teams are glad to help.
