Pre IPO structuring & preparation
...has your business been so successful that it has outgrown the private equity market?
If so you should consider listing on the public equity market. Listing should however, not be entered into lightly. Tax considerations, timing of the listing, value of your business shares and other questions must all be answered before the final decision.
So will your business make a successful listing?
Advisers and investors will want your business to exhibit most, if not all of the following:- A strong, experienced and broad-based management team. This should include a finance director or a clear intention to recruit one in the short term;
- An historical record showing good growth in turnover and profits;
- Reasonable prospects that growth will continue, if not accelerate, in the future;
- Being in a market sector which is favourable with investors;
- A robust and reliable accounting system; and
- The willingness to accept the appointment of non-executive directors to the board.
- Preparation of a detailed timetable leading to the listing;
- The selection and appointment of a broker and other professional advisers;
- Preparation of a prospectus and independent accountants report;
- Liaison with Australian Stock Exchange and Australian Securities and Investment Commission;
- Monitor verification of administration and listing documents; and
- Assisting the directors in understanding their responsibilities in relation to the listing and their responsibilities as directors of a public company.
BDO experience has shown that companies that have attempted to list on a public equity market without thoroughly considering the pros and cons have paid the price. Businesses should carefully consider the advantages and disadvantages when considering whether or not to float their business.
