Going Public / IPO
The IPO of a company can be seen as the most lucrative exit variant, as it is usually here that the highest revenues are generated. Furthermore, the timing can be flexibly determined and a good valuation level of the market and a positive investor behavior can be waited for in order to maximize the proceeds. In addition to the usually higher price, an IPO offers further major advantages for a company.
On the one hand, this enables access to the capital market and future capital increases are significantly simplified through the issue of new shares or convertible bonds. In this way, own acquisitions become easier to present and the further growth of the company can take place through acquisitions. Thanks to the improved equity base, access to debt capital is much easier and debt financing is possible. In addition, aspects such as greater awareness and reputation gains vis-à-vis stakeholders play an equally important role.
Cons against an IPO
Negative aspects of the IPO are high consulting costs and high follow-up costs for investor relations, etc. Furthermore, depending on the listing standard, extensive publication obligations must be complied with. These advantages and disadvantages must be weighed up and it must be determined from the outset whether all shareholders wish to support the IPO. Special regulations in the participation agreement, which are similar to pre-emption and sale rights, help to clarify this in advance.