Who’s who on the IPO team: The right advisors can make all the difference

May 23, 2018


By Daniel Klausner, Capital Markets Advisory Leader, PwC Deals

A good time for IPOs

Last year was a good year for IPOs, with all three US equity 
markets showing a record-breaking, double digit increase in 2017 and IPOs outperforming the equity markets. We saw a strong start to IPOs in the first quarter of 2018, with an average return of 6% compared to a flat return from the broader equity markets. The US economy continues to demonstrate a strong outlook given recent robust jobs data, continued low unemployment and strong corporate earnings and GDP. These factors indicate that it is a good time to go public.

Are you ready to become a public company?

Going public requires executive management to be prepared to meet increasing shareholder and market expectations from day one. These include addressing shareholder earnings expectations, investor relations, periodic reporting, ongoing compliance and regulatory requirements, operational effectiveness and risk management. To make sure that you are prepared, it’s important to objectively assess your readiness for life as a public company.

If so, let’s get started

Preparation is the secret to success. Planning, executing and managing an IPO is a complex task for any organization. The better prepared a company is, the more efficient and less costly the process can be. While the planning process for an IPO can start the day a company is incorporated or as late as months before a public offering, we recommend that an orderly plan be executed over a one to two-year period.

Building a going public team that transitions to a being public team

The decision to go public can be one of the most important in a company’s history—and one of the most challenging. Your company needs expert direction and assistance to stage a successful IPO and beyond the IPO, to being a successful public company. Part of this process includes creating a team of people to help execute various parts of the IPO and guide the company once it is public. In our in-depth resource, Roadmap for an IPO: A guide to going public, we do a deep dive on the key players that should be part of your overall team.

Key advisors include:

  • Securities counsel: Your attorney will become the quarterback of your registration process. It is imperative that you find a law firm experienced with both the IPO process and your vertical/industry, and you must be able to trust that the firm will protect your interests when working with the underwriters and SEC staff.
  • Investment bankers or underwriters: The bookrunnners work with you to develop the structure, size and valuation, coordinate the research analysts and roadshow, interact with the buy-side, build the book of demand and price the IPO. An underwriter provides guidance that the IPO will be properly managed and successfully marketed and supported, both before and after going public.
  • Capital markets advisor: Your capital markets advisors will provide independent and objective advice on key equity capital value-driving decisions and judgments (including equity story, selection of banks and research analysts, valuation, timing, and pricing) throughout the IPO process. They will assist you in selecting an underwriting syndicate of banks that complement one another. Capital market advisory generally advise you on how to get the best out of your investment bankings.
  • Underwriters’ counsel: They’re responsible for drafting the underwriting agreement and protecting the underwriters’ interests in an IPO.
  • Independent auditors: These strategic and technical advisors should have experience with public company financial reporting, expertise in GAAP and the auditing standards of the PCAOB and the ability to continue to help you through growth and global expansion.
  • Advisory accountant: An advisory accountant offers advice and assistance by providing an objective view of the critical issues involved in accessing a particular capital market, including IPO readiness, S-1 review, accounting policy review and project management.
  • Financial printer: The printer is responsible for word processing and printing the registration statement and prospectuses.
  • Other professional advisors: An investor relations and a stock transfer agent will provide guidance based on IPO experience.

The right advisors can make a big difference

By appointing key advisors early, your management team is freed up to anticipate issues and avoid untimely delays, preserving the value of the IPO and enhancing the market’s confidence.

To get a more in-depth explanation about the going-public team or any other part of the IPO process, review our IPO roadmap paper and don’t hesitate to contact us directly for more information.


Related Links

Contacts

Bob Saada

US Deals Leader Tel: +1 (646) 471-7219 Email: bob.d.saada@pwc.com

Curt Moldenhauer

US Deals Solutions Leader Tel: +1 (408) 817 5726 Email: curt.moldenhauer@pwc.com