An Initial Public Offering (IPO) can be a valuable way to access the capital markets for growth capital and/or to realise all or part of the investment in a business. It can also be a good way to attract and retain key management and staff. It is however, not a process to be considered lightly as it comes with additional responsibilities. The IPO process itself can put pressure on the organisation, especially the CEO, the CFO and new Board members. Ongoing reporting and communication requirements typically require changes in processes, systems and culture, which will vary depending on each business.
This holistic review looks at whether the business is ready for an IPO, and is best conducted at least 18 months prior to a potential listing process formally starting. Key coverage areas include:
- Implications of the corporate strategy, competitive environment and industry to a proposed listing
- Organisational structure and key board, executive and personal gaps
- Existing shareholder needs analysis, including related party interests and the potential requirement for restructuring
- The need to carve out operations not related to the business to be listed, or establish new stand-alone functions
- Review of historical financial performance to assess implications for prospectus and ASX listing requirements, including related party transactions, accounting policies and pro forma financial information
- Review of budgetary and forecasting systems for prospectus and ongoing reporting
- Suitability of internal controls and corporate governance
- Suitability of external support
- Overview of IT systems, management reporting systems and processes
- External communication and financial reporting needs as a listed entity
- Other due diligence considerations which could include, but not limited to environmental, legal and operational issues
This is an independent review on the suitability for an IPO, which is aimed at providing practical advice to prepare the business during and post the IPO.