fundraising for growth: ipo vs. private equity presented by debbie clarke, partner, chantrey...
TRANSCRIPT
Fundraising for growth: IPO vs. Private EquityPresented by Debbie Clarke, Partner, Chantrey Vellacott, DFK LLP
23 September 2014
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Contents
Options for Development Capital IPO vs. Private Equity Private Equity market returns & Case Study Are the Public Markets back? Public Market Case Study
2
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IPO vs. Private Equity (Pros and Cons)
IPO Pros
Public exposure (marketing)
Generate new investors (capital raising)
Cons Public exposure (always in the public
glare)
Compliance (increased costs)
5
Private Equity Pros Funding flexibility (capital raising)
Board support (growth)
Cons 3rd Party Involvement (additional
stakeholders)
Possible loss of control (investor position)
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IPO vs. Private Equity (Preparation and Documentation)
6
Identify suitable advisers Early adoption of IFRS Corporate governance review
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IPO vs. Private Equity (Preparation and Documentation)
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IPO Prospectus (published)
Long Form (private)
Short Form (published)
Working Capital Report (private)
Financial Reporting Procedures (private)
Private Equity Financial forecasts (private)
Business plan (private)
Share purchase agreement (private)
Investment agreement (private)
Identify suitable advisers Early adoption of IFRS Corporate governance review
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Private Equity returns
8
PE backed companies showing YoY increase in EBITDA, growth in employment and decrease in leverage
BVCA: 5-year IRR (2013) for surveyed funds covered was 11.1%, UK pension fund assets of 10.1% & FTSE All-Share of 14.3%
Corporate Venture Capital, UK lagging behind US and Europe
UK private equity returns 15.7% over last decade
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Case Study – Ministry of Cake
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150 years experience of manufacturing high quality desserts (producing over a million slices of cake a week).
From: Private acquisitive company; to Large corporate subsidiary; to Private again with support of LDC
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Are the Public Markets are back ?
10
Focus on AIM Average market capitalisation £68.1m (median £22.1m) £4.16bn raised to July 2014, 113% of 2013 full year Most money raised in last 7 years
Can AIM reach 2004 levels?
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When to go to the market
12
Markets are still volatile and investor appetite changes
3 year FTSE AIM All Share
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Case Study – Patisserie Holdings Plc
Grew from 8 stores in 2006 to 138 Significant growth forecast through
further sites and brand acquisitions
14
Founded 1926
PE backed (2001)
Acquisition spree: * Druckers (2007)* Baker & Spice (2009) * Flour Power City Bakery (2013) *Philpotts (2014)
IPO on AIM (Jan 2014)