Cost of Ipo
Considering an IPO? The costs of going and being public may surprise you
September 2012 A publication from PwC’s Deals practice
Table of contents
The heart of the matter
1
Embarking upon the IPO process requires insight into the costs
An in-depth discussion
4
The initial public offering
Cost of going public Cost of being public 5 12
What this means for your business
27
Assess the readiness of your organization for an IPO to appropriately stage the costs incurred and to minimize unexpected surprises
July 2012
The heart of the matter
Embarking upon the IPO process requires insight into the costs
Costs directly attributable to an IPO can vary widely based on complexity, size of the company, and a company’s readiness to operate in a public environment
Initial public offerings (IPOs) give companies an opportunity to reinvent themselves. Despite the transformational nature of an IPO, which requires several different parts of the business to work together, many companies embark upon the process without a thorough understanding of the costs. Companies frequently underestimate those costs, as well as the time and complexity associated with this event. According to the results of a recent PwC survey1 on managing the costs of going public, as many as 48% of participating CFOs with firms that had gone public in the United States in the past several years said that the one-time costs associated with their IPOs had exceeded their expectations.
The magnitude and scope of IPO costs can vary significantly from offering to offering based on a number of variables, such as the size of the offering, the complexity of the IPO structure, and the organization’s readiness to be a public company. Factors impacting the cost of an IPO include: • Direct costs, such as underwriter, external auditor, legal and financial reporting advisor fees • Longer-term costs such as the need to develop external reporting, investor relations and human
September 2012 A publication from PwC’s Deals practice
Table of contents
The heart of the matter
1
Embarking upon the IPO process requires insight into the costs
An in-depth discussion
4
The initial public offering
Cost of going public Cost of being public 5 12
What this means for your business
27
Assess the readiness of your organization for an IPO to appropriately stage the costs incurred and to minimize unexpected surprises
July 2012
The heart of the matter
Embarking upon the IPO process requires insight into the costs
Costs directly attributable to an IPO can vary widely based on complexity, size of the company, and a company’s readiness to operate in a public environment
Initial public offerings (IPOs) give companies an opportunity to reinvent themselves. Despite the transformational nature of an IPO, which requires several different parts of the business to work together, many companies embark upon the process without a thorough understanding of the costs. Companies frequently underestimate those costs, as well as the time and complexity associated with this event. According to the results of a recent PwC survey1 on managing the costs of going public, as many as 48% of participating CFOs with firms that had gone public in the United States in the past several years said that the one-time costs associated with their IPOs had exceeded their expectations.
The magnitude and scope of IPO costs can vary significantly from offering to offering based on a number of variables, such as the size of the offering, the complexity of the IPO structure, and the organization’s readiness to be a public company. Factors impacting the cost of an IPO include: • Direct costs, such as underwriter, external auditor, legal and financial reporting advisor fees • Longer-term costs such as the need to develop external reporting, investor relations and human