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Whether your company is looking to access capital to continue to grow, or whether you’re aiming to raise your company’s profile or explore exit strategies for investors, entering the capital markets via an initial public offering (IPO) could be a viable option.
An IPO is a transformational event for any business and you need to be ready to deal with the additional demands that being a public company brings. While a public company faces greater public scrutiny and regulations, it also secures access to more, and often deeper, sources of capital. How do you get there? And how do you know if it’s the right path to capital for you?
Preparation can make the difference between success and failure, so the sooner you start to plan the better. First and foremost, you need to know why you’re going public, considering the best timing thereof and identify what you should focus on in terms of the right preparation for a journey that, if done properly, can be an exciting – and lucrative – step for your business.
And don’t forget, your IPO is not the ultimate objective in itself – it’s only the beginning of your journey as a listed company.
One of the most important (and earliest) decisions you’ll have to make is the market on which to float your company. Today there are more viable options for companies than ever before — including your own domestic stock exchange, an international stock exchange, or even a dual listing. The decision you make will profoundly affect not only your valuation and your on-going relationship with investors — it will also impact your structure, processes and strategy into the foreseeable future. So you’ll want to choose carefully and strategically, taking into account both short- and long-term ambitions.
When you’re considering to go public, and you’ve chosen your potential market(s), you need to be in the right shape to begin the process—and the sooner, the better. You’ll need to have a well-thought-out business plan and corporate structure, a compelling equity story, and appropriate governance, financial and IT systems in place. And you’ll need to be ready, from day one, to address new requirements around regulatory compliance, internal control, financial reporting, people and reward, investor relations, and much more. All of this, of course, while continuing to run your day-to-day business efficiently and strategically.
Executing a successful IPO is the culmination of a long, complex process. From strategy, accounting, reporting, financial systems, internal control, corporate governance, media and investor relations, to treasury, IT, legal, tax, people and reward — every piece of the puzzle must be in place and connected before you proceed. Each market has its own rules and its own regulatory landscape and risks to navigate. That’s why it is so important to work with an independent advisor that has the people, presence and experience to help you execute your IPO — in whatever market (or markets) you select.
Your IPO is not the end of the story, it’s only the beginning. Once listed, your company will be under far greater public scrutiny than ever before, with a vastly expanded universe of stakeholders - and a significantly larger portfolio of new risks, and obligations, to manage. Any weakness in systems or failure to comply with regulations may cause a loss of investor confidence – not to mention reputational damage, and the potential for significant company and personal monetary damage as well. In more ways than one, the public’s perception of your company will have a direct effect on the value of your stock. Fortunately, you are not alone.
From planning and executing capital market transactions to navigating regulatory change and complex accounting – we are here to support you, every step of the way.
Our dedicated network of deals and capital markets professionals across the world have the knowledge and experience in domestic and international deals, regulatory regimes, accounting standards and business processes to help you master the many challenges of your transaction. We work with you and take the time to explore your business, using technology driven solutions and our extensive capital markets and project management experience, to uncover ways to optimise value at every stage.
With high degrees of volatility in the IPO markets and interest rates at record lows, investors have been increasingly looking at special purpose acquisition companies (“SPAC”) to unlock growth opportunities. A SPAC, also known as a blank check company, raises capital in an initial public offering (“IPO”), which it then uses to acquire a private operating company, known as a target company. Originally operating more on the fringes of the capital markets, SPACs went mainstream in the 2010s and are increasingly popular with big name private equity sponsors, hedge funds, and investment banks. For instance, in July 2020, Pershing Square set a record, raising $4 billion in the IPO of its new SPAC, Pershing Square Tontine Holdings (PSTH.U).