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Six steps to a successful IPO

07 April 2014

Our six step guide to an Initial Public Offering (IPO).

The road to an Initial Public Offering (IPO) can be challenging and preparing for a float requires resources, commitment, time and trusted partners. As the UK’s market leader in share registration, Equiniti has unrivalled experience in the IPO market. This allows us to provide expert guidance, direction and support to a company as it takes its first steps towards listed status.

Although market conditions tend to define where and when it’s a good time to float, there are other fundamental elements that need to be considered when a company is looking to list, which is why we’ve put together our six steps to help towards a successful IPO.

1. Management of the existing private share register

Leading up to an IPO, a company may undertake placings (pre-IPO fund raisings) and restructures of its share capital. Having a registrar in place at this point will help to 
make it a smooth and efficient process, as they will look after the day-to-day maintenance of the register, including AGM mailings and shareholder communications (including promotion of e-comms). This will allow the company to run its share register as a plc, promote good practice, remove the administrative burden and feel more comfortable when it does float.

2. Get the right support and advice

A company should start adopting plc disciplines and practices ahead of the IPO, as this will put it in a good position post float. Establishing plc-standard Board and Committee processes – for example, terms of reference, schedule of matters reserved to the Board, a proper Board calendar and Board papers processes – is a good idea. Implementing Audit Remuneration, Nomination Committees and other appropriate committees should also be considered, alongside getting policies and procedures in place that are relevant to a listed company, such as disclosure procedures and the share dealing code. This could feed into the Financial Review process, therefore it is important that the company chooses its advisers carefully to ensure it receives the correct support and guidance throughout the IPO process. 

3. Employee share schemes

Many companies will want to incentivise and retain their employees leading up to the IPO or at the IPO stage. This can be achieved by offering employee share schemes, which promote employee ownership and can greatly assist with staff retention and recruitment, as well as improve performance levels.

4. Appoint the right people

Selecting the right management team to coordinate resources is crucial. Your investors will need to have full confidence in this team. At least 50% of the Board should be made up of Non-Executive Directors, excluding the Chairman. You should also bear in mind that financial due diligence will uncover everything, so make sure you identify any issues or risks which may impact on the IPO so that these can be addressed.

5. Don't underestimate the IPO process and the time it takes

Remember you still have to run your business alongside the IPO. Preparation is key for 
things to run smoothly, so it’s wise to carefully allocate your responsibilities and work streams.

6. Advice on post IPO management

The first year following an IPO can be challenging with lots of changes. This is why Equiniti 
provides its clients with a dedicated Relationship Management team who are there to offer guidance and support. In addition to regular meetings, there is also the opportunity for Equiniti’s clients to participate in customer collaborative events aimed at sharing best practice, as well as Equiniti-led focus groups, while of course providing on-going company 
secretarial support and advice.