Are you considering an Initial Public Offering (IPO)?
Going public is a daunting endeavor for any business.
Even though an initial public offering (IPO) is a tempting opportunity for a firm to obtain sustainable equity financing, the road to the stock exchange is a complex and time-consuming one.
Various factors, such as communication with new investors and transparency, are subject to higher regulations.
In this respect, establishing a distinct corporate identity and winning the trust of potential investors are two crucial considerations on your path to IPO readiness.
What is a typical IPO trajectory?
Becoming a public company entails a long journey. Companies contemplating an IPO usually underestimate the time and work required to attain such an ambitious goal.
The illustration below divides the entire IPO process into four distinct phases. Starting with the IPO readiness assessment and ending with the IPO execution, the duration of such a project is estimated to range from several months to even more than a year.
Thus, a timely start and proper alignment right from the beginning ensures maximal flexibility for a successful IPO.
Typical phases of an IPO
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IPO Readiness Assessment at a glance
At KPMG, a holistic approach is the best way to ensure our clients receive the highest quality services.
Thanks to KPMG's multidisciplinary approach, we guide you through the necessary steps like
- capital market review
- financial and non-financial aspects (e.g. IT and ESG)
- corporate governance
- compliance regulation
- legal and tax aspects
KPMG's IPO readiness assessment
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What needs to be considered before an initial public offering?
Each company needs to contemplate whether going public is in its best interest in the long term.
If you determine to do so, what obstacles will your company confront as it moves towards this goal?
Numerous contingencies are to be taken into account before, during, and after an initial public offering (IPO), which undoubtedly consumes substantial corporate resources.
Various particular challenges have to be thoughtfully considered. Some examples of the critical questions which should be addressed before an IPO are:
How can we attract investors?
- Can we prepare an attractive equity story?
- Which stock exchange is the most suitable for our company?
- Which investors should we target?
- Do we have clear, credible, and measurable growth opportunities?
- Do we have well-defined key performance indicators?
- What is our company’s positioning compared to competitors and peers?
Do we meet the requirements?
- Do we fulfil the stock exchange’s requirements?
- How is our IPO process structured?
- Do we have a robust financial track record?
- Do we have an appropriate tax/legal structure?
- Are we ready for the due diligence process?
- Do we adhere to an accepted accounting standard, such as IFRS or Swiss GAAP FER?
Can we produce high-quality financial information on a timely basis?
- Can we produce accurate and comprehensive information for the board of directors?
- Do we have the required resources and competencies in finance?
- Are we able to comply with the rules for ongoing disclosure and transparency?
- Is our financial information comparable to our peers?
- How robust are our budgeting and forecasting processes?
How do we measure up on corporate governance?
- How does our post-listing governance structure look like?
- How will our board of directors be composed?
- Does our board of directors have the required competencies?
- How will we manage the relationship with investors?
- How will our internal audit be set up?
Our contribution
- We support you with establishing a project team and, creating a project plan, preparing for all necessary steps, deadlines, and responsibilities. We help you design, handle and control numerous interrelated issues and tasks so that you are fully equipped for the upcoming IPO.
- When working with you, we strive to add to your knowledge and assist you in achieving the most efficient use of your financial and other resources.
- Throughout our collaboration, we leverage our expert knowledge and professional networks and work together with you to implement optimal solutions to various obstacles, concerns, and tasks in line with your unique needs.
- Hence, although these challenges may appear overwhelming, we will support you in reaching an appropriate decision.
- After a successful IPO readiness assessment, we remain an ideal partner to advise on the further preparation and execution of the envisaged IPO. We are prepared to stay onboard throughout the entire process to ensure a successful listing.
Your benefits
- Structured methodology to identify gaps
- Expert team on short notice
- Pragmatic and solution-oriented advice
- Permanent knowledge transfer and short communication channels
- Development of capital market competencies within your company
- Quick and easy access to a wide range of expert knowledge within KPMG across all disciplines and services
Our approach to IPO finance readiness
KPMG Accounting Advisory Services' emphasis is mostly, but not exclusively, on external and internal reporting. Specifically, our collaboration with you will include:
External reporting
- Assessment of financial statements with regards to stock exchange requirements and possible accounting challenges (e.g., accounting policy review, financial standard conversion, impact analysis, and application of accounting standard)
- Identification of relevant gaps and recommendations regarding the closing process in connecting with the new reporting requirements (e.g., half-yearly reporting, MD&A, sustainability-specific topics and disclosures, internal controls)
- Estimation of time requirements and gaps for the content of the annual and interim report
- Assessment of available resources
Internal reporting
- Review consistency of business planning to historical financial information
- Identification of relevant gaps and recommendations regarding the Management Information System and the internal control system for financial reporting
- Analysis of the internal audit
Our broad sector and deep IPO experience enable us to identify potential pitfalls and investor concerns before they arise.
At the end of our project, we will have developed a highly customized and problem-oriented analysis with a comprehensive list of recommendations and measures as well as a detailed master plan for you.
