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ASX IPO - tips for success

Why do companies list?

  • Access to capital for growth
  • Full or partial exit
  • Expectations of price re-rating (ie. stepping stone to exit)

In reality the transition from private to public for many companies will take closer to 3 years than the 6 months often quoted to do the deal.   It is a challenging transition, but the process is often begun without a full understanding of the true costs and challenges.

It is crucial that companies contemplating listing clearly understand not only the reasons for listing but the associated costs and challenges.  It is important to have independent and expert advice before committing to a listing – much better to fully understand all the issues upfront than after it’s too late.

Many listings fail to deliver on investors’ expectations in the first 12 months – what are the 5 top reasons?

  • Management and Board are inexperienced in the process
  • Management do not have experienced and independent advice through the process
  • IPO valuation and forecasts often become unnecessarily stretched through the process
  • Key management is focused on the IPO process for several months
  • Management takes time to transition to a listed environment

The result? Prospectus forecasts are often missed and investors are disappointed, management find themselves alone and inexperienced to deal with the mess.

It is difficult to recover investor confidence once it has been lost, much better to get it right in the first place.

The 5 key steps to a successful IPO

  • Be clear about what you’re trying to achieve - consider in detail the viability and pitfalls of IPO, as well as the alternatives
  • Make sure you understand what investors are looking for – objectively assess whether your company will be attractive to them and whether you can deliver those outcomes
  • Ensure the management team has the depth and capability to take the company through the IPO process and to represent it afterwards
  • Appoint a deal team (corporate advisor, lawyer, accountant, brokers) who are appropriate for the job and focus the team on achieving your goals
  • Have access to ongoing advice and assistance – just because the company is listed doesn’t mean it’s been successful or the transition is complete

 How Federation Capital can assist you

Federation Capital’s principals have extensive experience of IPO’s, this positions us ideally to provide expert and independent advice to companies considering ASX listing.

We can provide advice on:

  • Benefits, pitfalls and true costs of IPO
  • Possible alternatives to IPO
  • Management of the IPO process including:
    • Preparing the company for IPO
    • Formulating the IPO deal structure
    • Introducing and managing brokers/underwriters
    • Prospectus and due diligence
    • Investor road-show
  • Actively advising and working with the company post-listing

Need Advice?

To arrange a confidential,  no-obligation discussion, please contact us on:

+61 2 8386 3206 or info@fedcap.com.au

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