While AIM is a great place for small and mid cap companies to raise capital, getting onto AIM and subsequently thriving is far from straight forward. There are a significant number of issues to consider, and steps to take, if a company is to successfully join AIM and thereafter succeed. Despite being strong AIM candidates many international companies have failed to IPO on AIM, or have destroyed significant value at IPO, owing to the fact they did not understand the complexity of the process and take the correct advice. First Columbus helps guide our clients smoothly through the process so value is maximised.
The First Columbus management team and our Advisory Panel have between them over 100 years of experience in the small cap public arena. Through our years of experience we intimately understand the typical problems that can occur during the AIM IPO process as well as the strengths and weaknesses of the market advisors in the UK. Our in-depth relationships with the NOMADs, brokers, lawyers, accountants and Financial PR firms that facilitate London’s AIM market puts us in a strong position to provide an invaluable service for international companies looking to maximise value through an IPO, and subsequently in the after market, while avoiding all the usual pitfalls.
It is critical for each company to receive its own bespoke advice on how best to achieve maximum valuations at the fund raising stage. We look to work with companies well in advance of the AIM IPO in order to guide them seamlessly through the process to ensure a successful AIM IPO whilst simultaneously achieving both management and investors' objectives.
Below we detail a number of the features of the overall advisory service we provide which can make a big difference to whether or not the IPO launches successfully, the value achieved and the ongoing experience on AIM:
- Advice on market timing
- Internal reorganisation
- Presentation position and delivery
- Advisory panel advice
- Institutional test marketing
- Board appointments
- First Columbus research note
- Accessing the best NOMAD/broker
- Interest/valuation gauging
- Organising the London road show to meet advisory team
- Post road show follow-up
- Return trip planning and advice rn trip planning and advice
- Contract advice
- Advice on online regulatory compliance
- Post IPO representation
- Management of secondary exit process
Advice on market timing – AIM is a fast moving market where investor sentiment fluctuates from month to month. It is therefore crucial to get market timing right as historically even some great companies have failed to IPO owing to poor timing. Once a company has tried and failed, it is often difficult to return and certainly without compromising valuation. First Columbus is continually abreast of the developing trends and sentiment such that we can help present companies at the right times when valuations are good in a particular sector or indeed the overall market.
Internal reorganisation – For international companies it is sometimes advisable to restructure the company to list on AIM including issues such as a new plc ‘topco’ in order to regularise and align shareholder and economic interest pre admission. We can advise on the benefits of this route and help enact the process. We also review internal and financial controls and management reporting frameworks to ensure that corporate governance is of a sufficient standard to be AIM compliant. Pre admission housekeeping and general recommendations to improve marketability are also provided.
Presentation positioning and delivery – In many circumstances we find that the presentations of international companies need to be completely re-worked to resonate with a
UK broker/investor audience. These firms are always busy and receive numerous propositions per day. Most are discarded immediately because they are pitched incorrectly. We know exactly what the brokers/investors are looking for and how to pitch the presentation so will work closely with companies until their presentation is perfect for the London market.
Advisory panel advice – As we provide the broking firms with a value added service, they are willing to ‘lend’ us the time of their best research analysts. As such, in addition to general industry experts, we have the number one rated analysts (rated by the institutions who invest in AIM) across many sectors that sit on the First Columbus Advisory Panel . The Advisory Panel provide sound advice to our clients as to how best to pitch the story to both brokers and the institutions. Furthermore, their backing of any company gives immediate endorsement and credibility. The analyst will also be able to start to talk to the institutions to excite them about the IPO from a very early stage.
Institutional test marketing – The founders of First Columbus have been sell side analysts for over a decade and consequently know all key institutional investors in the London market. This enables us to get our clients’ proposals in front of the ultimate financiers at a very early stage compared to most other companies. Getting early feedback from the institutions enables critical changes to the presentation and can also give confidence to the brokers to take the company onto AIM.
Board appointments – While it is not essential for international companies, institutions are often comforted by the presence of a UK person on the board. Through our contacts in the financial markets we can help make introductions to PLC experienced non-executive directors..
First Columbus research note – First Columbus have an acute understanding of the key points that brokers need to see quickly at the first pitch to make the proposition stand out from the numerous other companies that they see every day that are also looking to join AIM. We have a First Columbus two page research marketing document that we populate with the salient points that will excite these busy brokers into wanting to take a meeting. Any company backed by First Columbus also confers superior credibility as the brokers know that we will have already done some due diligence and we are a trusted source.
Accessing the best NOMAD/brokers – Given AIM’s success, the better NOMAD/brokers
are understandably very busy and hence can be extremely selective in which companies they look at. Furthermore, most are simply not receptive to the cold call approach and will only look at companies that are introduced through a trusted source. Our relationships with all the key NOMAD/brokers in the market gets companies that we work with instant access to firms they would otherwise struggle to get interested. This clearly makes a big difference in terms of the ultimate success, valuation achieved and the post IPO experience.
Interest/valuation gauging – We will talk to a small number of selected and appropriate brokers to get an initial feeling for the market’s appetite for the proposition. At this stage we can also garner indicative valuation levels which are fed back to management to give them a better feel for whether they want to progress with an AIM floatation. We also track the valuation metrics of AIM stocks/sectors. This enables us to give an independent view on the proposed valuation by the broker to help avoid issues of either under or over pricing.
Organising the London road show to meet advisory team – Once the company is correctly positioned we then organise a 3/4 day road show in London to introduce management to a selected group of the best NOMAD/brokers, lawyers, accountants and financial PR companies which we believe, working together, will maximise the valuation and ensure a successful admission. These are intensive days with management doing back to back meetings
each day accompanied by First Columbus. We provide full briefings ahead of each meeting to give the inside track on how to play each meeting and organise all of the logistics for each day.
Post road show follow-up – After the initial road show we circle back with every firm to answer further questions and also to get candid feedback which we then report back to management.
Return trip planning and advice – Assuming there is interest from at least one broker the company will need to return for a second time to re-meet the shortlist of interested advisors. We help co-ordinate the due diligence requests ahead of the re-visit to ensure that the final meetings are productive in enabling both parties to make their final decisions. Post road show we ultimately help advise on which NOMAD/broker, lawyer, accountant and financial PR firm to select.
Contract advice – Having been brokers on AIM for over a decade, we understand how contracts should be constructed. We provide our clients with advice on what to expect and can also help in the negotiation of the Engagement Letters that need to be signed with key advisors as well as assist with the resolution of any issues.
Post IPO representation – A major problem that international companies face, without a regular UK presence post IPO, is that the story can get lost amongst the other 1700+ stocks
on AIM. Being based in London we provide an invaluable service to keep the stock at the forefront of investors’ minds through regular contact with the appointed broker and financial PR company to ensure they are continually promoting the story. If required, we can also help the company commission independent research cost effectively which is often an important step to getting private client investors involved. This is a critical but often forgotten consideration, particularly in the context of future fund raisings to either grow the business or to allow major shareholders to sell down.
Management of secondary exit process – Once early investors are released from any lock-up period, we can advise on timing and strategy for follow-on exits.
Please click here to see a visual summary of First Columbus’ services