0
Considerations for a
US IPO listing
6 March 2014
Page 2 Considerations for a US IPO listing
Disclaimer
► This material has been prepared for general informational
purposes...
Page 3 Considerations for a US IPO listing
Today’s moderator
Jackie Kelley
Partner, Ernst & Young LLP
EY Americas IPO lead...
Page 4 Considerations for a US IPO listing
Today’s panel
Howard Morgan
First Round Capital
Partner
Todd Sloan
Tremor Video...
Page 5 Considerations for a US IPO listing
Today’s agenda
► IPO Strategy and communication
► Establishing public company g...
Page 6 Considerations for a US IPO listing
Polling question
For those of you planning an IPO, what is your timeline?
A. Pl...
Page 7 Considerations for a US IPO listing
The US IPO market was the most active
since 2004
Source: Dealogic, Thomson Fina...
Page 8 Considerations for a US IPO listing
Today’s agenda
► IPO Strategy and communication
► Establishing public company g...
Page 9 Considerations for a US IPO listing
Setting the capital raising strategy
Key considerations in going public
► How s...
Page 10 Considerations for a US IPO listing
IPO
Destination
Availability of
analyst expertise
Investor base
and attention
...
Page 11 Considerations for a US IPO listing
Polling question
When listing on the US exchanges, what are the most
important...
Page 12 Considerations for a US IPO listing
Benefits of listing in the US
► Brand recognition
► Diversity of companies
► L...
Page 13 Considerations for a US IPO listing
Setting the IPO agenda
Communicating with key stakeholders
Who owns the IPO st...
Page 14 Considerations for a US IPO listing
IPO critical success factors
CEOs/CFOs of those outperforming companies noted ...
Page 15 Considerations for a US IPO listing
Top IPO readiness considerations
► Preparing for the journey
► Keeping your op...
Page 16 Considerations for a US IPO listing
Today’s agenda
► IPO Strategy and communication
► Establishing public company ...
Page 17 Considerations for a US IPO listing
Polling question
What is the status of your board? (select all that apply)
A. ...
Page 18 Considerations for a US IPO listing
Since the financial crisis of 2007–2008, US exchanges
have been the preferred ...
Page 19 Considerations for a US IPO listing
Board governance for IPO-bound companies
IPO companies have an opportunity to ...
Page 20 Considerations for a US IPO listing
Today’s agenda
► IPO Strategy and communication
► Establishing public company ...
Page 21 Considerations for a US IPO listing
Polling question
Have you assessed your company’s IPO readiness? (select
all t...
Page 22 Considerations for a US IPO listing
Preparing for an IPO
Act like a public company before the IPO
Business case fo...
Page 23 Considerations for a US IPO listing
One-minute recap
Page 24 Considerations for a US IPO listing
Resources
►EY’s guide to going public
►Make sure you have your
SOX house in or...
Page 25 Considerations for a US IPO listing
tsloan@tremorvideo.com
+ 1 212 773 1803
mary.klein@ey.com
+ 1 212 201 0311
how...
Page 26 Considerations for a US IPO listing
Looking for even more information on taking
your company public?
EY IPO and St...
Page 27 Considerations for a US IPO listing
Thanks for participating
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Considerations for a US IPO listing

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This slide deck was designed to accompany a video webcast that included an interactive discussion by a moderator and three panelists.

Considerations for a US IPO listing
Origination date: 6 March 2014

Thinking about an IPO? On this webcast, hear the C-suite, board members and advisors of recent IPOs discuss how they set the tone from the top to get their companies ready to go public.

What is top of mind at the board level? Learn the questions to ask and best practices in setting an IPO agenda, and gain an understanding of how to manage the risk, while maximizing and sustaining your valuation.

You are welcome to join the on-demand version of this interactive discussion and learn about issues for US IPOs by going to:
http://www.ey.com/GL/en/Issues/webcast_2014-03-06-1600_considerations-for-a-us-ipo-listing

This webcast is part of an ongoing series. Register for any EY webcast and you will be asked if you want to receive invitations to future webcasts.

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Transcript of "Considerations for a US IPO listing"

  1. 1. Considerations for a US IPO listing 6 March 2014
  2. 2. Page 2 Considerations for a US IPO listing Disclaimer ► This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ► The views expressed by the presenters are not necessarily those of EY. ► This presentation is © 2014 EYGM Limited. All Rights Reserved. EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more of the member firms, of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
  3. 3. Page 3 Considerations for a US IPO listing Today’s moderator Jackie Kelley Partner, Ernst & Young LLP EY Americas IPO leader #EYIPOJoin today’s Twitter discussion:
  4. 4. Page 4 Considerations for a US IPO listing Today’s panel Howard Morgan First Round Capital Partner Todd Sloan Tremor Video CFO Mary Klein Ernst & Young LLP Partner, In bound IPO FAAS Leader Richard Rosenstein SFX Entertainment, Inc. CFO The information contained herein is a summary in nature. Viewers should consult their own professional advisors to address their individual circumstances and concerns.
  5. 5. Page 5 Considerations for a US IPO listing Today’s agenda ► IPO Strategy and communication ► Establishing public company governance ► Core areas of focus for a successful IPO #EYIPOJoin today’s Twitter discussion:
  6. 6. Page 6 Considerations for a US IPO listing Polling question For those of you planning an IPO, what is your timeline? A. Planning an IPO in 2014 B. Planning an IPO in 2015 C. Thinking further out D. Not sure but interested in learning more about the process E. Does not apply (EY, faculty, other)
  7. 7. Page 7 Considerations for a US IPO listing The US IPO market was the most active since 2004 Source: Dealogic, Thomson Financial, EY research $50 $38 $44 $50 $27 $27 $43 $40 $47 $62 238 208 204 214 34 65 162 124 133 226 0 10 20 30 40 50 60 70 0 50 100 150 200 250 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Proceeds(US$b) NumberofIPOs Proceeds (US$b) Number of IPOs The US IPO market was supported by better economy, bullish equity market, low volatility and strong PE/VC backed exits
  8. 8. Page 8 Considerations for a US IPO listing Today’s agenda ► IPO Strategy and communication ► Establishing public company governance ► Core areas of focus for a successful IPO #EYIPOJoin today’s Twitter discussion:
  9. 9. Page 9 Considerations for a US IPO listing Setting the capital raising strategy Key considerations in going public ► How strong is my growth/equity story? ► Do we need capital to grow? ► Do investors want liquidity? ► Is my business predictable? ► Are IPO deal valuations strong? ► Is my business sufficiently mature?
  10. 10. Page 10 Considerations for a US IPO listing IPO Destination Availability of analyst expertise Investor base and attention Valuation level of comparable companies Trend: listings of comparable companies Peer companies Language and culture Prestige and critical mass of the marketplace Brand recognition potential Participation in indices Scope of capital market regulations Strategic fit: • Consumers • Growth markets Speed of approval process Liquidity on the stock exchange Total flotation and ongoing post-IPO costs Initial and ongoing stock exchange requirements Legal and market risks Currency: • M&A target market • Financing growth America Asia Pacific Home market EMEA IPO on the international stage Why, where and when to go public?
  11. 11. Page 11 Considerations for a US IPO listing Polling question When listing on the US exchanges, what are the most important criteria for selection? (select all that apply) A. Competitors are listed on the exchange B. Better valuation C. Ongoing stock exchange requirements D. Interested in learning more about the different options E. Does not apply (EY, faculty, other)
  12. 12. Page 12 Considerations for a US IPO listing Benefits of listing in the US ► Brand recognition ► Diversity of companies ► Liquidity ► Cross-border listing opportunities ► High-tech trading platforms
  13. 13. Page 13 Considerations for a US IPO listing Setting the IPO agenda Communicating with key stakeholders Who owns the IPO strategy? Who are the key internal/external stakeholders? Who is driving the communications? Executive leadership Customers Vendors Employees Key stakeholders Regulators Investors Analysts Creditors
  14. 14. Page 14 Considerations for a US IPO listing IPO critical success factors CEOs/CFOs of those outperforming companies noted critical success factors: ► IPO is a transformational process and not just a financing event ► Systematic implementation of new programs, policies and systems common to public companies prior to the IPO ► Implementation of pre-IPO improvement initiatives at least one to two years prior to the IPO ► Ensuring competitive advantage as measured by both financial and non-financial metrics EY’s Measures that Matter study was a survey of more than 100 companies and 400 institutional investors Study shows that only a small percentage of IPOs go on to outperform the market in the first three years following the offering. Lessons learned Results
  15. 15. Page 15 Considerations for a US IPO listing Top IPO readiness considerations ► Preparing for the journey ► Keeping your options open ► Timing the market ► Building the right management and advisory teams ► Building your business and financial processes and infrastructure ► Establishing corporate structure and governance ► Managing investor relations and communications ► Delivering an effective road show ► Attracting the right investors and analysts ► Delivering in your promises
  16. 16. Page 16 Considerations for a US IPO listing Today’s agenda ► IPO Strategy and communication ► Establishing public company governance ► Core areas of focus for a successful IPO #EYIPOJoin today’s Twitter discussion:
  17. 17. Page 17 Considerations for a US IPO listing Polling question What is the status of your board? (select all that apply) A. Ready to be public B. Need to establish structure C. Need to find new members D. Not sure, need to learn more about what the board should be comprised of E. Does not apply (EY, faculty, other)
  18. 18. Page 18 Considerations for a US IPO listing Since the financial crisis of 2007–2008, US exchanges have been the preferred market for cross-border IPOs Number of IPOs Capital raised (US$b) * Foreign listings is where the domicile of the primary exchange (or the secondary exchange for dual listings) differs from the listed company domicile. For dual listings, all funds are allocated to the primary/foreign stock exchange. Source: Dealogic, EY research 2009–2013 top stock exchanges for cross-border listings* 143 88 30 30 0 50 100 150 200 NYSE and Nasdaq London (Mainboard and AIM) Hong Kong (HKEx) Singapore (SGX) $37 $25 $18 $8 $0 $10 $20 $30 $40 NYSE and Nasdaq London (Mainboard and AIM) Hong Kong (HKEx) Singapore (SGX) China, 55% Israel, 6% UK, 5% Greece, 3% Canada, 3% 25 other countries, 28%
  19. 19. Page 19 Considerations for a US IPO listing Board governance for IPO-bound companies IPO companies have an opportunity to enhance board governance in four key areas: ► Independent board leadership ► Director elections ► Board composition ► Ownership structure EY will be releasing a study on Board governance of recent IPO companies Study shows that IPO companies have less mature board governance practices Findings Results
  20. 20. Page 20 Considerations for a US IPO listing Today’s agenda ► IPO Strategy and communication ► Establishing public company governance ► Core areas of focus for a successful IPO #EYIPOJoin today’s Twitter discussion:
  21. 21. Page 21 Considerations for a US IPO listing Polling question Have you assessed your company’s IPO readiness? (select all that apply) A. Yes B. No, we have not but are planning to do so C. Not yet, still in the process of learning if an IPO is the right strategy D. Does not apply (EY, faculty, other)
  22. 22. Page 22 Considerations for a US IPO listing Preparing for an IPO Act like a public company before the IPO Business case for investment Develop a compelling investment story, sound business, predictable growth trajectory and clear use of IPO proceeds for growth Financial results Demonstrate strong operating performance, balance sheet and positive cash flow over several quarters, and several years of strong, steady growth momentum and rising profits Accounts and information systems Establish timely and reliable financial information, appropriate IT systems and a robust financial planning and analysis, enabling availability of concise management information Internal controls and reporting Establish a robust internal control structure and financial reporting processes Management and external advisory team Put a team in place with a proven track record and the experience to undertake the IPO event and operate a public company Corporate governance Establish a strong governance structure, including independent board and clear, transparent shareholder/corporate structure Investor relations Place an expert to drive an effective communications strategy, manage the public spotlight and send effective messages to investors and analysts
  23. 23. Page 23 Considerations for a US IPO listing One-minute recap
  24. 24. Page 24 Considerations for a US IPO listing Resources ►EY’s guide to going public ►Make sure you have your SOX house in order ►Right team, right story, right price ► Connect with us: ►ey.com/ipocenter ►EY_Growth
  25. 25. Page 25 Considerations for a US IPO listing tsloan@tremorvideo.com + 1 212 773 1803 mary.klein@ey.com + 1 212 201 0311 howard@firstround.com + 1 646 561 6378 rich@sfxii.com + 1 949 437 0237 jacqueline.kelley@ey.com @jackiekelleyEY Contact us Todd Sloan Tremor Video Mary Klein Ernst & Young LLP Howard Morgan First Round Capital Richard Rosenstein SFX Entertainment, Inc. Jackie Kelley Ernst & Young LLP
  26. 26. Page 26 Considerations for a US IPO listing Looking for even more information on taking your company public? EY IPO and Strategic Transactions Conference: guide to going public in today's marketplace Geared toward CEOs and CFOs of pre-IPO companies May 28, 2014 11:30 a.m. – 5:00 p.m. Metropolitan Pavilion New York City For more information, contact kelly.mcauley@ey.com
  27. 27. Page 27 Considerations for a US IPO listing Thanks for participating
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