Andrew Peddie, corporate partner in Gateley plc’s Reading office, summarises the key aspects of an IPO and what businesses considering it as an alternative to sale or other fundraising options should know before taking the plunge.
Companies that are able to demonstrate high-quality management, good corporate governance and growth prospects in the right sectors, might look towards an Initial Public Offering (IPO) as a way to access growth capital, as opposed to a sale or other fundraising options.
An IPO is a major step for a business to take but in the Thames Valley, we have more than 50 businesses that are currently listed on the Alternative Investment Market (AIM), the London Stock Exchange’s international market for smaller growing companies. Described as the most successful growth market in the world, since its launch in 1995 AIM has seen more than £98 billion raised by more than 3,600 companies. In 2016, there were 38 IPOs on the AIM market, achieving an aggregated valuation of £699 million. Could it be the right option for your business?
At a time when companies are increasingly considering IPOs, it is important to stress the planning that is required in the months, and sometimes years, before listing. If you can get this part right, the process will be much easier and the chance of its success increased. Preparation for an IPO is crucial in ensuring that there are no surprises when it comes to taking the step of putting the business in front of potential investors and that the business is ready for life as a listed company.
