SM
Floating a Company
Our Our credentials
Senior Management from The London Stock Exchange Over 22 years combined experience of advising companies
about flotation on AIM and the UK stock markets Unparalleled city networks at the most senior levels including
all the UK Stock Markets Not business sector or size specific We work with companies who may be several months or
several years away from flotation Our clients include: companies, corporate advisors, banks,
universities, business support networks
Why float a company?
To raise large amounts of investment finance, both at the time of the float and by way of the further issue of shares once floated
To create a wider market for the company’s shares - providing an opportunity for existing shareholders to exit or part exit
To increase your ability to make acquisitions, by using your company’s shares as currency
To raise your company’s profile and also the profile of your products and services amongst customers and potential customers
To encourage employee commitment by making share schemes more attractive - helps to attract , retain and motivate key staff
Increase the value of the company
SM
LONDONTHE PRIMARY FINANCIAL CENTRE
IN EUROPE
Europe’s deepest
pool of investment
capital
Wide range of
institutional
investment
Balanced and efficient
regulatory regime
Industry experts
specialist research
coverage
Choice of markets
(AIM, Main Market
ISDX)
Different methods of flotation
Placing The company broker offers the company’s shares to selected institutional investors Allows the company to raise capital at lower costs More flexibility as to how it is undertaken More discretion given to the company and its advisors as to who it’s investors are Can lead to a shallower shareholder base No private investors can lead to less liquid sharesPublic Offer Company broker offers shares to private and institutional investors Usually the offer is underwritten Need for a prospectusIntroduction The company joins a market without raising capital No underwriting Admission document only, more cost effective than other options Limited opportunity to raise profile Used as a platform for future capital -raising
Initial steps to flotation
Business plan which covers– Strategy– Markets – Competition– Financial projections– Management team
Take advice early Undertake a feasibility exercise first before deciding to
float
AIM
What is it ?
The most successful growth market in the world Owned and operated by the London Stock Exchange Designed for UK & International high growth companies Over 2500 companies have joined since launch in 1995 Access to investment capital Flexible regulatory approach Easy admission procedure (in theory)
AIM Admission Rules
No minimum size to be admitted No trading record required No minimum amount of shares to be in public hands In most cases, no prior shareholder approval required for
transactions Admission documents not pre-vetted by Exchange or
UKLA but by nominated advisor Nominated advisor appointed & required at all times Nominated broker appointed & retained at all times
AIM
Ongoing Obligations Retain a Nominated advisor (Nomad) at all times Retain a Nominated broker at all times Comply with the London Stock Exchange’s admission &
disclosure standards Timely release of price sensitive information Disclosure of information on the company website (rule 26) IFRS required
AIM
Benefits Flexible regulatory regime (encourages growth by
acquisition) Non restrictive admission rules International market – International brand Further issues market very healthy Tax benefits
Drawbacks Costs Small companies can find it difficult to join
(regardless of the no minimum size admission rule)
Demystifying the costs
Costs are broadly similar to other equity fundraising exercises
Largest fees are contingent Due diligence is not contingent, but will focus on risk areas
first Fees paid out of funds raised Should get realistic view of likelihood of success at the
outset
HollandBendelowFlotation consultants
London OfficeHolland BendelowNew Broad St House35,New Broad StreetLondonEC2M 1NH
Also in Leeds, Bristol & Cambridge
Tel: 0845 1223415Web:www.hbcg.co.ukEmail: [email protected]