IPO Readiness The PwC Capital Markets group www.pwc.com/ua/capital-markets

IPO Readiness
The PwC Capital Markets group
An IPO Readiness assessment is a useful tool. It helps to identify big-picture issues and
prevent embarrassing ‘deal killer’ surprises late in the process. A robust IPO Readiness
assessment evaluates the effort required to prepare the prospectus and determines what
information is most important to investors. The assessment also identifies gaps within the
company’s overall governance framework, new processes, areas needing internal controls,
and positions requiring enhanced skills to operate as a publicly traded company. It really is
the starting point for the company’s transformation.
The Capital Markets Group is part of the Assurance practice of PwC and a global network
of capital markets specialists. It comprises a team of specialists who provide a broad range
of services to companies in connection with Frankfurt and international capital market
transactions. These include:
An IPO Readiness assessment and report will cover the following areas:
• Advising on regulatory issues
Accounting, reporting
and financial
effectiveness
Processes for timely preparation of external reporting,
different publishing requirements, interim financial reporting,
segment reporting, GAAP financials, planning processes, KPIs
Risk management
and internal control
systems
Risk management system, analysis and systematic
identification of risks, comprehensive documentation of risk
management, internal audit
Corporate Governance
Composition of supervisory board, establish committees,
internal policies and procedures for management and
supervisory board, acknowledgement of governance
recommendations, compensation systems
Capital market
communication and
compliance
Insider considerations, insider lists, ban on insider dealing,
processes for ad-hoc announcements, establishing Investor
Relations, analyst conferences / roadshows, prepare analyst
presentations / factbook / annual report
Further items
Equity story, HR and change culture, IPO steering committee,
employment incentive programme, tax optimised group
structure, preparation processes of prospectus and comfort
letter, due diligence / data room management
IPO project management
• IPO Readiness
• Preparing detailed timetable and
milestones
• Co-ordination of all IPO activities
Financial information
• Early involvement in the GAAP
conversion process
• Audit of IFRS / national GAAP financial
statements for the past three years
• Advice on integration of internal and
external reporting processes
Business planning and valuation
• Analysis of financial and strategic profile
• Selecting the right market and advisory team
• Undertaking financial and business due diligence investigations
• Assisting with IFRS conversion projects
For more information, please visit
www.pwc.com/ua/capital-markets
• Assistance in the development of an
equity story
• Business enterprise valuation based on
the business plan and on market data
assist
For more information about Deutsche Börse visit
www.deutsche-boerse.com>listing
Legal and Tax
• Assist with implementation of a tax
beneficial group structure
• Assistance in conversion to a German AG
Corporate Governance
• Assist with implementation of German
Corporate Governance Code
• Assist with implementation of a risk
management system
• Assistance in connection with the
German enforcement process
Compliance
• Advice with respect to all publicity
requirements
• Assist with implementation of an Investor
Relations function
• Assist with implementation of a
Compliance Office and compliance
reporting
Listing in
Frankfurt
A guide to
listing on
Frankfurt
Stock
Exchange
• Preparation for becoming a public company
PwC Support
Whether a company is an emerging business seeking venture capital, or an established
company seeking to expand through an IPO, PwC can provide a full range of advisory and
support services.
www.pwc.com/ua/capital-markets
This publication has been prepared for general guidance on matters of interest only, and does not constitute
professional advice. You should not act upon the information contained in this publication without obtaining
specific professional advice. No representation or warranty (express or implied) is given as to the accuracy
or completeness of the information contained in this publication, and, to the extent permitted by law,
PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability,
responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance
on the information contained in this publication or for any decision based on it.
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«PricewaterhouseCoopers (Audit). All rights reserved.
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19.09.12
PwC Capital Markets
Group comprises
specialists who
provide a broad
range of services
to companies and
investment banks
in connection with
capital market
transactions
Why list on Frankfurt Stock
Exchange
A listing on Frankfurt Stock Exchange (FSE) places your
company at the heart of one of Europe’s most important
financial centres. An IPO on the FSE can help companies
access the right capital and investor base needed to grow
their business and develop into truly global enterprises. FSE market segments and transparency standards are set out below:
Market
segments
Transparency
levels
Benefits of a listing on FSE
EU regulated
market
Key factors for a successful IPO
Open market
(Exchange
regulated)
Prime Standard
Entry Standard
General Standard
(EU minimum
regulation)
First and Second
Quotation Board
Planning and good preparation are crucial to a successful listing. The main tasks to
bring a company into shape for going public are as follows:
• Preparation of a well constructed, attractive equity story, supporting the central
statements by reliable data and information
• Establishing high quality corporate governance standards underpinned by robust
management information and management reporting systems
• Composition of the historical financial track record, if necessary conversion to IFRS
• Assessment of the existing capital, organisational and tax structure
Access to a deep pool of capital and a diverse international investor base
Balanced approach to regulation
Save time and money with a simple and cost-efficient listing process
• Implementation of legally compliant processes, to be able to fulfil ongoing reporting
Competitive fee structure
FSE offers the most competitive admission
and introduction fees, compared with its
peers, e.g. HKEx, LSE, NYSE, Euronext.
One of the fastest listing processes worldwide
requirements and to establish an efficient capital market communication process
Prime Standard and
General Standard: € 3.000 + € 2.500
• Management and employee incentive arrangements
Increased profile especially for high-tech, pharma and ‘green’ companies
Strong peer groups, Cleantech, Renewable Energies, High Tech Engineering and
internationally established indices e.g. DAX, etc.
It offers also the most competitive
annual listing fees.
Prime Standard: € 10.000
General Standard: € 7.500
Approved EU prospectus counts as ‘EU passport’ giving access to other EU-regulated markets
Focus on Prime Standard
International companies
welcome
In today’s world cross-border listings are increasingly common. FSE boasts a significant
number of international listings. There are no legal restrictions for a listing of international
companies on FSE. Companies can also list shares on FSE even if they are listed on another
exchange (dual listing).
Overview of FSE market segments and transparency levels
FSE provides two market segments for companies, each with two different transparency
levels. These segments and levels are designed to meet the different capital needs of
companies and their investors from all over the world.
Prime Standard has the highest level
of transparency and is the first choice
for companies planning a major and
internationally focused IPO
Entry Standard offers low costs and flexible
access
General Standard is based on minimum
EU-regulation
An inclusion in First Quotation Board
means even less stringent formal
requirements
All companies, whose shares are already listed, or included on another international or
domestic trading venue and apply for inclusion in the Open Market are listed on the Second
Quotation Board.
The Prime Standard is tailored to the needs of companies seeking to attract global investors
and to enhance substantial future growth at comparably low cost of capital to other
exchanges. Admission to the Prime Standard is one of the prerequisites for acceptance of
companies in the selection indices DAX, MDAX, SDAX and TecDAX.
Overview of admission requirements for Prime Standard
In order to obtain a listing on the Prime Standard, a company must meet the following
admission requirements.
Prospectus
1
Organisational setup
and documentation
Is your company marketable?
2
Investment case
Is your company concept
interesting for investors?
3
Business plan / data
preparation
Can you communicate your
investment case clearly?
4
Valuation of your
company
Which price can you reach at
the capital market?
5
Selection of banks / IPO
strategy
Number of shares to be listed at
which stock exchange? How do
you communicate with banks,
analysts and investors?
6
Application for listing /
pre-marketing
Which criteria will you have to
meet?
7
Book-building and
placement
How deep is the capital market’s
demand?
8
Post-IPO
How do you secure a steady,
positive stock chart?
Required
Issuer
Must have existed as an enterprise for at least
three years. Existence in current legal setup for this
period not mandatory.
Accounting standards
EU-issuers: IAS/IFRS
Non-EU issuers: IAS/IFRS or accepted equivalent
Publication language
German and English (only English for foreign
issuers)
Reporting history
3 years, exemptions possible (e.g. SPACs)
Minimum issuing volume
10,000 shares
Minimum market capitalisation
€1.25 million
Initial free float
IPO Readiness focuses
Predictable time schedule for IPO
Minimum of 25%, exemptions possible