Why listing on a public market like AIM is the route to the highest valuation for your company
Initial Public Offering Advisory by Critical Future
Achieve the highest valuation
Listing on a public market involves significant fees and managing a regulatory workload. But it is the route to achieving the highest possible valuation for your company.
A private investor will value your business at, quite frankly, as little as they can get away with. But a public offering means maximum competition as fund managers, institutions and retail investors all consider investing in your business.
Take cash off the table
Unlike a venture capital investment, which normally provides only growth capital, listing on a public market enables shareholders, such as the founders, to take money off the table.
If it is your company listing, you could withdraw in cash as much as 30% of the market cap achieved on listing. As of May 2021, 821 companies comprise the submarket, with an average market cap of £80 million per listing – so this could be a substantial sum available for the founding team.
The Alternative Investment Market (AIM) is the smaller market in the UK, but has companies valued in the billions like Boohoo and many others.
To understand if, when and how you can list on the AIM market, come and talk to Critical Future’s expert advisers.
Case study: Supporting a US software business to list on AIM in the UK
Analysis of clients potential for listing on the AIM market
Is the AIM market suitable for my company?
Is it a good time to list?
What are the steps to list?
What is needed to achieve a high valuation?
What do the NOMADS say about our company’s listing potential?
What are the valuation criteria?
How much will listing cost and how long will it take?
What is a full roadmap to listing on AIM for our company?
Client:
Our client is a leader in HR, benefits and employee communication. The company provides videos, decision-support tools and interactive, digital communication solutions to employers, HR consultants, insurance carriers and healthcare providers.
Research methodology:
- Situational analysis: Comprehensive desk research by PhD qualified team
- Validation of findings through primary research: Interviews with 8 NOMADS
- Strategizing: working through findings and development of strategic recommendations
Goals for client:
- Plans to take the company public through London AIM listing during 2022.
- Plans to get $25 million valuation.
What Critical Future did:
We worked closely with our client to prepare a full London AIM Listing Analysis, with a focus on the UK and European Market, including research, AIM Listing and strategic recommendations.
What our research and analysis highlighted
Opportunities for our client
The AIM gives small and medium-size companies access to investors, promotes their image and brand globally, and improves employee commitment by using shares as an incentive to encourage their long-term motivation.
Low potential risk
The FTSE AIM All-Share Index reached its highest value at the end of March 2021, suggesting that Brexit and Covid-19 have left the market mainly unaffected, with the technology sector accounting for 11% of total deals.
Eligibility requirements
The main requirements for AIM listing include:
- production of an admission document
- financial reporting procedures
- dynamics and liquidity of the company
- sufficient working capital for 12 months from the date of submission.
The preparation process for being in the AIM listing via IPO takes on average 4 months.
US companies on the AIM
47 US companies are listed on the AIM with an aggregate market cap of $4 billion, 41 of which joined via IPO and raised an aggregate of $1.3 billion. The offering costs for US companies can be predicted with 70% certainty.
Creating a UK corporation is not a prerequisite for AIM listing, but having a UK presence provides a level of comfort.
⇒ Listing on the AIM market typically takes around 6 months
⇒ The fees are at least £500k which include advisors, solicitors, accountants and PR
⇒ There is a recipe for achieving the highest valuation, which involves crafting a compelling story for the market using key elements.
Covid19 and the pandemic did not negatively impact initial public offerings in fact there have been more since 2020. It is an ideal time to take your company public.
We are happy to discuss your IPO in a free no obligation consultation. Please get in touch with our team.