Advantages of going public

• Access to alternative sources of finance
• Creation of a market in the company’s shares
• Enabling the company to expand through acquisitions; by issuing shares rather than cash
• Raising the company’s profile
• Enhanced ability to grow
• Making possible the tax-efficient offering of shares to employees
• A public company supported by a capital market should be able to source conventional bank borrowing

Disadvantages of going public

• The company may be too small and the significant costs of listing could outweigh the benefits
• The company’s growth prospects may not be strong
• Running a public company may not suit the directors due to the greater formality, accountablility to a wider base of shareholders and legislative requirements
• The company’s performance is brought under the public spotlight
• Market constraints can restrict flexibility - for example demands by the market for dividend growth may lead to a reduction in working capital
• Founders of the company will be diluted

The London stock Exchange is one of the most international of all stock exchanges and is therefore an obvious choice for medium or large blue-chip companies with international operations

NASDAQ is one of the major markets in the US and specialises in high-tech entrepreneurial companies. Although principally made up of American companies, increasing numbers of foreign companies are now seeking a listing on this market.

EASDAQ’s rule book is very similar to NASDAQ’s and there are dual trading arrangements which allow companies to have their shares traded in Europe and the US.

Other markets
For many companies, smaller or more local markets are more appropriate. Although the costs of raising capital may not be much lower than on the larger international exchanges, these markets are often a better choice for smaller or domestic companies, offering greater liquidity.

Which market should you choose
Your choice of market will depend on:

• The size and maturity of your company
• The target amount you wish to raise on IPO
• The company’s aims and objectives
• The geographic area in which you intend to operate
We have a thorough knowledge of the markets available to you and can help you chose the right market for your company. When you have made your choice we can guide you through every aspect of the flotation process

How can Grant Thornton help
We can help you make all-important decisions as to whether IPO should play a part in your plans and, if so, which market is right for you. We can advise you what actions will be needed to prepare for this and the process involved – and, of course, we will work with you at every stage to carry it out successfully.

After considering all the issues you may decide that an IPO is not the right step at this stage. If this is the case we can help you formulate alternative strategies to fulfil your business plan. Our very substantial experience can help you raise any finance, which may be necessary at the best terms.