An IPO is a major event in the life of any business. It involves a large group of financial institutions, financial advisers, lawyers, public relations consultants and reporting accountants, all working together to help a company succeed in coming to market. Using advisers with demonstrable track records helps make a complex process run smoothly and sets the company up well for the next phase of its evolution.
Key players
The key players in the process include:
- the company’s management;
- selling shareholders (if any); and
- the new non-executive directors.
Any company embarking on an IPO should also appoint its team of advisers at an early stage. Securing good quality advisers is one of the key aspects of preparing for an IPO. Key advisers in an IPO process include:
- The lead investment/underwriting bank and other banks/underwriters
- lawyers for both the company and the banks; and
- accountants.
The company may also engage remuneration consultants and public relations consultants in connection with the IPO.
Benefits to going public
The advantages of an IPO can be considerable:
- it is an opportunity for your company to raise capital in order to fund growth, development and expansion, allowing for more flexibility in sourcing cash flow;
- it provides existing shareholders with an opportunity to realise some of their investment by selling their shares at the time of an IPO or subsequently;
- acquisitions can be effected and financed through an issue of shares (either through the IPO or a secondary offering), allowing you the option of offering your own shares or cash as consideration;
- employee incentive plans can be set up, allowing employees to more easily value their holding in your company; and
- there will be an increase in market profile and stature for your company.
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