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A B C D E F G H I J K L M N O P R S T V W Y

IPO slowdown – a time to prepare

IPO slowdown – a time to prepare

Tuesday 13th December 2016

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AIM High - Issue 15

Even prior to the Brexit vote 2016 was a challenging year for IPO activity. This does not mean that companies considering an IPO should simply wait until the conditions improve.
 
It is likely that an already volatile market, which has seen a number of IPOs, such as Pure Gym, being pulled or only getting away with reduced valuations, will take further time to settle as participants try to interpret the consequences of the Brexit and US presidential votes.
 
To remain in control of their options when the IPO market comes back, ambitious companies should take steps in the current period which enable them to capitalise on a change in conditions.
 
Actions to take now include:
 
  • Consider the fundraising alternatives to an IPO. As it is difficult to predict when the IPO window will re-open, if short term access to cash dominates the thinking behind an IPO process, alternative funding options should be considered; 
  • If IPO remains the best option, use the time to: 
  1. Put good corporate governance and internal controls in place ready to comply with future disclosure obligations;
     
  2. Address auditing and accounts issues, which can take time to get right;
     
  3. Maintain a focus on running the business so that the investment story is strong. In a challenging market, a demonstrably strong historic performance and a compelling investment story becomes of greater significance;
     
  4. Start to appoint an advisory team to assist with these preparations. 
If you would like further advice, or to discuss preparing a company for IPO, please contact David Bowcock or Andrew Millar. 
 
Head of Corporate, Manchester
Tel: 0161 836 8948
 
 
 
Partner, Corporate
Tel: 0161 836 8965