As a business owner — whether you’re running a burgeoning start-up or an established multinational corporation — one of your main concerns is no doubt maximising shareholder value. At times, this can seem like a buzz term: what does maximising shareholder value actually mean?
Fortunately, Calibre Business Advisory is here to help you answer this question (and more) with our broad range of valuations and business exit services.
As experienced corporate and business advisors, we know that each company has their own measure of success. Our team will work with you to help define this and achieve maximum outcomes for your shareholders. Our services in this area are comprehensive, and our flexible and tailored fee structure ensures all clients can benefit from our expert advice.
An initial public offering, or IPO, is the process where a private company offers its shares to the public via a new stock listing. Thus, the private business is now known as a public company and has additional opportunities to raise capital by selling shares.
Preparing for an IPO is a comprehensive process that should be led by an experienced team. Your company will need to prepare a prospectus, which is a document that includes all the information required for an individual to decide whether they want to invest — a description of your company, terms and conditions of the stock offering, and more.
The due diligence required for an IPO is significant and will require the input of several stakeholders. In Australia, public companies are listed on the Australian Securities Exchange, or ASX. The ASX has its own prerequisites from a legal, operational, and financial perspective that must be met before a listing is approved. Even if you have some knowledge in this area, it’s well worth investing in external assistance to ensure the IPO goes smoothly from beginning to the final listing.
Perhaps your business currently is public and you’re interested in moving in the opposite direction. Privatisation is the sale of publicly owned assets to the private sector. A management buyout occurs when a team of employees makes the decision to invest in the company they work for.
There are many benefits to this type of transaction. It doesn’t involve a change of leadership and it can provide peace of mind to the seller that their company is in safe hands. As is the case with any type of sale, this process involves comprehensive due diligence to ensure that shareholders are adequately informed, which Calibre Business Advisory can certainly assist with.
Valuations and independent expert reports
Maximising shareholder value means making sure every decision you make is in the best interests of your shareholders. Achieving this can be challenging, particularly when facing complex decisions that have long-term consequences.
You must keep stakeholders informed about potential transactions, which is where independent expert reports, or IERs, enter the picture. An ‘independent expert report’ is an objective analysis of a proposed transaction. In some cases, the ASX or the Australian Securities and Investments Commission (ASIC) may prescribe an IER to ensure stakeholders benefit from independent advice. Alternatively, a business may decide to issue an IER voluntarily to help shareholders better understand the direction the company is headed.
An IER will contain detailed, analytic, independent information to break down a proposed transaction to shareholders. It will also include an opinion as to whether a transaction is in the best interest of shareholders. As experienced business advisors, Calibre Business Advisory understands the importance of independent expert reports and the type of information required that will best benefit shareholders.
Whether you are buying or selling, due diligence is required to mitigate risk.
Perhaps you are looking to exit your business through a private sale. To ensure the transaction runs as smoothly as possible, you need to prepare yourself for any questions a potential buyer might have. Conducting vendor due diligence with an experienced business advisor in Sydney will help you to get your affairs in order and give your business the best chance possible of participating in a successful sale.
On the other hand, companies looking to expand their operations via a merger or acquisition must conduct due diligence on behalf of their shareholders. The last thing you want is to make a significant decision, like purchasing another company, only to find that you have put shareholders in a precarious position.
The process of maximising shareholder value is critical and complex. For more information about the types of services offered by Calibre Business Advisory’s team of qualified and experienced business advisors, contact us today.