Once a company has decided to come to AIM, there are two broad stages to be considered:
Pre IPO advisory profiling The company will need to meet and appoint the best IPO advisory
team which will consist of a broker, a NOMAD, a Lawyer, an Accountant and a Financial PR firm. First Columbus helps co-ordinate and facilitate this critical process – please click here to find out more.
The IPO process Once all the key appointments have been made, the listing process begins with each performing their respective tasks to ensure the IPO occurs, generally thee months after the NOMAD/broker has been appointed.
In order to prepare the company for IPO, draw up the necessary admisson documentation, comply with the regulatory requirements and raise the capital, a company will need to make appointments across a number of different advisory categories:
IPO Advisor- First Columbus
Many companies either fail to IPO on AIM or get a poor valuation due to the lack of knowledge of what is required to effect a successful listing. This is exactly the service that First Columbus provides. From pre IPO preparation through to setting up the meetings with the best firms across each advisory category, and helping in their selection, through to post IPO representation, our involvement is critical in ensuring the IPO is completed efficiently and effectively such that value is maximised.
Appointing First Columbus removes all the pressure of making all the key appointments below.
Nominated Advisor (NOMAD)
The NOMAD is a corporate finance adviser that has been approved by the London Stock Exchange. Initially the NOMAD will assess whether a company is suitable to be listed on AIM. If a company passes the NOMAD’s quality and due diligence thresholds, the NOMAD will support the company’s application to AIM which includes the compilation of the AIM Admission document. It will also ensure that the ongoing regulatory obligations and Director responsibilities are met and provide ongoing general corporate finance and M&A services. A company must retain a NOMAD at all times or it will be de-listed.
Broker
Brokers are securities houses that are also members of the London Stock Exchange. In many circumstances the NOMAD will also act as the broker such that only one appointment will need to be made. The broker carries out a number of important roles including:
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Running and coordinating the IPO process including setting up and accompanying the management on the investor road show to raise the capital, book building and pricing the issuance.
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Facilitation of trading in the secondary market including further share placements and market making.
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Written research by the analyst including a pre IPO document and post IPO analysis.
Reporting Accountants
AIM Rules require that IPO candidates have three key reports prepared:
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Long Form Report – A detailed due diligence report that is included in the Admission Document to help determine the suitability of the company for admission to AIM. This includes a complete description of the business, historical financials and an assessment of accounting policies and financial controls.
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Short Form Report – A summary of the historic trading results, balance sheets and cash flows. This can be done in US and Canadian GAAP if required.
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Working Capital Report – This confirms that, in the Director’s opinion, there is sufficient working capital for its present requirements for at least 12 months subsequent to its AIM listing.
In addition, if the Admission Document has any estimates or projections, the Accountant will need to provide a comfort letter.
Lawyers
UK legal counsel will provide advice on capital structure, taxation and organisational issues. It will also cover all legal aspects of the Admission Document including a full verification exercise to ensure the accuracy of the document covering all topics including areas such as IP, employment, property and health and safety. International companies will also usually need legal representation in their local jurisdiction.
Financial PR
Although not a requirement, it is highly recommended that a company also appoints a Financial PR company. It will help create awareness and positive press interest during the run up to and actual listing of the stock. Post IPO it will help put together a programme to ensure that there is good news flow across all forms of media to keep the stock at the forefront of investors’ attention.
In general, from the time that a company signs a Letter of Engagement with a NOMAD/broker, it will take around three months before the company receives the listing proceeds and the shares start trading on AIM. The listing process is summarised below:
Please note, although the listing process is quick on AIM relative to other exchanges, it is critical that a company starts to plan and work with First Columbus well in advance in order to ensure a smooth and hic-up free IPO. As such we urge companies to get in touch with us at an early stage in their consideration process.