Presentation

advertisement
Fundraising for growth:
IPO vs. Private Equity
Presented by Debbie Clarke, Partner, Chantrey Vellacott, DFK LLP
23 September 2014
Contents
 Options for Development Capital
 IPO vs. Private Equity
 Private Equity market returns & Case Study
 Are the Public Markets back?
 Public Market Case Study
cvdfk.com
2
Options for Development Capital
Newsflash 2014:
Funding is
available for
growth
Bank
Debt
Public
Equity
(IPO)
Funding
Solutions
Private
Equity
Private
Bond
cvdfk.com
3
Options for Development Capital
Focus on Private
Equity and IPO
Bank
Debt
Public
Equity
(IPO)
Funding
Solutions
Private
Equity
Private
Bond
cvdfk.com
4
IPO vs. Private Equity (Pros and Cons)
IPO
Private Equity
 Pros
 Pros
 Public exposure (marketing)
 Funding flexibility (capital raising)
 Generate new investors (capital
raising)
 Board support (growth)
 Cons
 Public exposure (always in the public
glare)
 Cons
 3rd Party Involvement (additional
stakeholders)
 Possible loss of control (investor position)
 Compliance (increased costs)
cvdfk.com
5
IPO vs. Private Equity (Preparation and
Documentation)

Identify suitable advisers

Early adoption of IFRS

Corporate governance review
cvdfk.com
6
IPO vs. Private Equity (Preparation and
Documentation)

Identify suitable advisers

Early adoption of IFRS

Corporate governance review
IPO
Private Equity
 Prospectus (published)
 Financial forecasts (private)
 Long Form (private)
 Business plan (private)
 Short Form (published)
 Share purchase agreement (private)
 Working Capital Report (private)
 Investment agreement (private)
 Financial Reporting Procedures (private)
cvdfk.com
7
Private Equity returns
UK private equity
returns 15.7%
over last decade
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
cvdfk.com
8
Case Study – Ministry of Cake
 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
cvdfk.com
9
Are the Public Markets are back ?

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?
cvdfk.com
10
Widest range of sectors on AIM

New AIM companies in 2014
Alt Energy (1)
Basic materials (3)
Consumer goods (4)
Consumer services (17)
Financials (10)
Healthcare (9)
Industrials (11)
Mining (3)
Oil & gas (4)
Real estates (2)
Technology (11)
Telco (2)
Utilities (1)
cvdfk.com
11
When to go to the market
 Markets are still volatile and investor
appetite changes
3 year FTSE AIM
All Share
cvdfk.com
12
No one wants to have to buck a trend
Boohoo.com
Patisserie
Holdings
Epwin
Group
cvdfk.com
13
Case Study – Patisserie Holdings Plc
Founded 1926
 Grew from 8 stores in 2006 to 138
PE backed (2001)
 Significant growth forecast through
further sites and brand acquisitions
Acquisition spree:
* Druckers (2007)
* Baker & Spice (2009)
* Flour Power City Bakery
(2013)
*Philpotts (2014)
IPO on AIM (Jan 2014)
cvdfk.com
14
Conclusion

Options for funding: availability strongest for last 8 years

Private and Public Equity markets provide different
options for growing companies

Prepare type of growth and funding required

Should you remain private or benefit from public market
exposure?
cvdfk.com
15
Download