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Initial Public Offerings

As a company looking to reinvent itself—breathing new life into its capital structure through an Initial Public Offering (IPO) — there are many unanticipated or unusual transactional expenses. Typically, corporations are so transfixed on what an IPO will do for their working capital that they overlook the costs involved in reaching that goal. You might be surprised to learn that the road to your IPO can be a lengthy and costly one. With one-time transactions as well as recurring expenses, it’s essential to the success of your company to understand the costs involved before proceeding down that path.

Once you decide an IPO is the best route for your corporation, you need a way to track and plan for all transactional expenditures. A clearly outlined strategy that can limit any surprises along this journey and serve as the infrastructure of your organization’s new life as a publicly listed company is very beneficial. Failure to create one could result in increased operational expenses and depletion of resources.

We’ll Help You Conduct A Full Assessment Of Your IPO

In order to understand the nuances and complexities you might face in your IPO endeavor, an examination of areas of expense should include:

  • External auditors: Offering-related fees such as issuance of the comfort letter and review of the registration statement, as well as year-end audits and quarterly reviews
  • Legal/advisory: Fees paid to securities counsel for drafting the registration statement and providing offering-related advice
  • Documentation/printing: Expenses related to the printing, distribution, and management of SEC documentation
  • Registration/Exchange: Costs associated with SEC, state, NYSE, or NASDAQ services and filings
  • Underwriting: Typically 5% to 7% of gross proceeds
  • Financial reporting advisory: Fees for preparing pro-forma financial statements and analyzing items within the registration

Conducting an IPO Readiness Assessment can provide a clear understanding of the types of fees associated with your company’s IPO. After all, a well-informed company is more likely to avoid delays and setbacks during the IPO creation process.