- Capital Pool Company (CPC) Programs
Going public via a Capital Pool Company (CPC) qualifying transaction is currently the most common way for companies in Canada to enter the public market.
What is a CPC?
A CPC is a shell company that is set up to raise capital, with the purpose of joining with an existing private company to go public through a process called a qualifying transaction.
An attractive alternative to the traditional IPO
CPCs have similar objectives to traditional IPOs in that they both want the advantages of Canadian capital markets. CPCs offer an attractive alternative to the traditional IPO process in that the rules and regulations surrounding CPCs and qualifying transactions are less rigid, making the overall process more straightforward.
How it works
The qualifying transaction consists of the CPC being acquired by a private company, in essence graduating from a shell company to a company that now has capital and commercial operations attached to it. Once the transaction is complete, the newly formed public company is listed on Canada’s TSX Venture Exchange.
The road to reaching a qualifying transaction can occur either by a private company locating a CPC for acquisition, or the CPC locating a suitable private company. Whether you are the CPC or the private company, once both parties have been identified, the next step should be enlisting a service provider to oversee the qualifying transaction.