Preparing for the IPO journey
This article was originally published on Finsbury.com
"While a comprehensive communications plan is important for a successful IPO, it also forms the foundation of your company’s public profile and credibility. "
As stock markets reach all-time highs and equity valuations continue to rise, private companies are increasingly looking to public listings to achieve their growth ambitions. While an IPO is an excellent way to raise capital and the business profile as well as enable investors to realise value, there are a number of communications perspectives to consider to ensure a successful listing.
The last 18 months have seen short-term periods of heightened market volatility, which have impacted the IPO plans of a number of companies. In such conditions, when the 'IPO window’ can rapidly open and close within short time periods, the strength of a company's profile and how it is perceived by potential investors and the media can have a significant impact on its ability to conduct a successful listing.
Finsbury has successfully advised on a number of the largest and most complex European IPOs over the past few years, and we believe that there are four key factors to consider to ensure a successful IPO:
Embed the reasons for listing in your wider strategic narrative – Before announcing your intention to float, you need to clearly define not only what makes the business attractive to investors, but also why a public listing is the next logical step in the growth of the business. Investors back growth stories. Therefore companies should work through their key messages with advisers and ensure the IPO is positioned as enabling and accelerating the next phase of growth
Ensure buy-in from key stakeholders – The announcement of intention to float should be the culmination of a months-long process of ensuring that internal stakeholders understand and buy into the rationale for listing. They will be the ones discussing it with key external stakeholders including clients and business partners. Have a communications plan for all stakeholders ready to roll on announcement day
Anticipate and prepare for critical issues that may arise during the process – Being transparent with your communications advisers will help identify any potential issues that may arise. Work closely with your advisers to formulate a clear and comprehensive plan for dealing with problematic issues identified. This will ensure that you are not on the back foot trying to manage a problem when the focus should be on meeting investors
Build relationships with key commentators and writers as early as possible – Identifying relevant sector analysts and journalists will allow you to build relationships early. This becomes more difficult and restricted when the formal process comes into effect
While a comprehensive communications plan is important for a successful IPO, it also forms the foundation of your company’s public profile and credibility. Our experience shows that companies who successfully engaged with key internal and external stakeholders during their IPO not only increased their chances of delivering a successful listing but also strengthened their performance in the after-market.
Finsbury has advised on the largest and most complex IPOs globally, and in the London market we have successfully undertaken the largest listings in each of the last five years. We continue to advise our clients post-IPO on all aspects of Financial, Strategic and Crisis communications. Contact us if you would like to find out how we can help you realise your IPO ambitions.
Ed Simpkins is a Partner in Finsbury’s London office and is a member of the partnership’s global Equity Capital Markets group.