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It’s perhaps too easy for prospective issuers to put off thinking about what would be needed to complete a successful IPO, working on the basis that a team of corporate advisers will be able to efficiently cover all this when/if the need arises. However, failing to be prepared can create unnecessary headaches when a listing process is officially underway, which can add to management workloads and increase the risk of timelines slipping – something that could prove crucial in achieving the best possible valuation.

Professional advisers are aware of this situation and at Avenir Registrars, we help clients by having all the necessary documentation available on a pro-forma basis, ensuring all is in place for a successful IPO. And we’re not alone in having a structured approach – recent conversations with Shaun Zulafqar of law firm Shakespeare Martineau highlighted the IPO-ready service they have on offer, which again is designed to ensure the client can be handled with the utmost efficiency. It’s an approach that dovetails well with the ‘Avenir Way’ and is one we were keen to understand in a bit more detail, so we asked Shaun about three key topics:

What are the key points a company needs to consider when undertaking an IPO?

Whilst there are no specific time restrictions a Company will want to ensure they are adequately prepared well in advance to ensure they maximise the opportunity to IPO as much as possible. We always recommend the issuer undertake an IPO readiness assessment at least 12 months before their planned listing to review areas such as capital market availability, corporate structure, historical and future financial projections, the management team and the increased administration that comes along with being a public company. The issuer should consider acting and operating like a public company in advance of the IPO. Ensuring the issuer has adequate internal resources to manage the IPO project and daily activities of the Company will be crucial. The correct management team can assist in enhancing the Company’s value proposition, however the issuer, will also need to build the right external team of brokers, lawyers, auditors and outsourced company secretarial and investor relations professionals.

How do you ensure the executive team are ready to lead a public company?

The composition of a board of directors is important from many perspectives. The Board develops purpose, policies and is overall responsible for the strategic direction of the organisation. Guaranteeing the board and senior management team is functionally complete with the rights skills and experience can go a long way to demonstrating value. Non-Executive Directors will provide a value add during the IPO process and beyond. The executive and non-executive should develop a succession plan pre or post IPO to demonstrate a level of maturity that will separate an issuer from its competitors. Issuers will also need to ensure the right level of skills and experience is available on each Committee. Remuneration committees will need to consider the IPOs impact on existing share schemes whilst also ensuring that future remuneration structures align to investor expectation and adequately incentivise the senior management team to pursue long-term value creation. Post the IPO the Audit Committee will be responsible for the oversight and managing of risk while ensuring the integrity of the issuer’s financial reports. Executive teams should prepare a skills matrix to identify gaps within the team and look to external advisors to provide the necessary director training where such gaps are identified.

Now listed, what are the key considerations for a company in its first 12 months as a listed entity?

The board as a whole will need to build an appropriate corporate calendar for board & committee meetings, roadshows, investor presentations and half/full-year results. Issuers will need to look to mobilise the in-house or external investor relations team based on the corporate calendar. Thereafter managing investor expectations with high-quality news flow and reporting disclosures will remain a vital component of the issuer’s life as a listed entity.

It’s clear that proper planning in advance will help streamline the IPO process when an issuer is ready to come to market. Avenir – with the support of its panels of well-respected professional advisers – stands ready to help take your business to market when the time is right. 

This article originally appeared in the July 2021 version of AIM Journal. You can can download a printable version here.

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