A specialist and dedicated team of Aim experts

Sep 13 2007 By John Charlton, Deloitte

THE classic reasons to float a business are to access capital raise, profile and create a liquid market for its shares. The benefits must be balanced against an increase in regulation, public accountability and scrutiny.

Aim is substantial, with the majority of City funds investing in it. It is a logical market for companies with valuations up to about £200m.

Advantages of Aim over the Official List include less regulation of acquisitions and equity issues and certain tax benefits.

There is also more sympathy towards significant management or founder shareholdings allowing control to be maintained.

Deloitte is uniquely positioned within the UK market, offering a specialist and dedicated Aim team comprising professionals from tax, audit and corporate finance divisions.

Our group of experts are perfectly placed to provide companies with greater indepth technological knowledge and impartial advice on all the options available to the company.

Deloitte recognises that planning an Aim flotation is very complex and time-consuming. This is why we advise on everything from MBOs to trade sales, to acting as Nomad on IPOs.

Each client receives a specifically tailored solution to ensure companies receive efficient, cost effective solutions which meet precise needs. An “average” IPO takes a minimum of three months to deliver and encompasses an intensive phase of legal and financial due diligence, documentation and marketing.

Then there’s stock market conditions and the classic holiday periods to consider. Put all this together and the whole process can stretch over a much longer period.

Appointing a Nomad at the outset is critical. This should ensure the entire flotation process is carried out in a structured and controlled manner and remove any 11th hour “surprises”.

For instance, it is normal for there to be a period of ‘grooming’ ahead of the flotation process to enable the company to meet the more rigorous regulatory requirements of being a public company and so as to maximise its potential valuation on IPO eg selling non-core assets, reducing debt, strengthening accounting systems, tax planning, appointing non-executive directors and so on.

However, it is important to note that an Aim flotation may not be suitable for every
company. A board considering IPO must have empathy with the City, enjoy talking to analysts and embrace a “stewardship” relationship with its new shareholders.

For a board that prefers privacy, funding from private equity or the banks might be
preferable.

For further information contact: John Charlton, partner at jcharlton@deloitte.co.uk or Keith Williams, assistant director at keiwilliams@deloitte.co.uk or tel: (0191)
261-4111.