As businesses grow, so do their opportunities. Those considering an IPO, a sale or another type of exit strategy need to begin the analysis early to maximize value. KPMG can help you make the right decision with a broad range of investment banking and strategic advisory services.
Determining the best exit
Exit strategies require businesses to proactively plan for their futures. Management teams will need to determine an exit that meets the financial and operational goals of the company and its shareholders. This type of analysis is complex and depends not only on the company’s own business model but also on a host of macro-economic factors. KPMG has experience maximizing value in the face of multiple scenarios.
Deciding between an IPO and a sale requires an analysis of timing of the liquidity event, and an evaluation of the benefit from ongoing increases in valuation over time, among other factors. An IPO can be an ideal exit for companies with strong growth records, accurate forecasting ability, and the ability to meet public market requirements. However, there are other financial alternatives that might be an even better fit. These include a sale to a strategic buyer, a sale to a financial buyer, refinancing or raising debt capital or an ESOP.
Our team can help you both evaluate and prepare for all of these scenarios. A company planning for an IPO needs to be able to function as a public company from day one with a strong management team, a proven corporate governance structure, the requisite annual audits and quarterly reviews, a reliable ERP and the ability to reliably forecast results and the ability to meet SEC and SOX requirements, among other requirements.
Companies planning for an alternative exit should establish a transaction strategy, get its records in order, identify and optimize key metrics and understand the sale process.
Frequently, it is beneficial to pursue multiple paths to maximize value.
KPMG thinks like an investor and emphasizes strategic planning, valuation and success that does not end with the transaction as issue, but that continues into the future. Superior due diligence limits risk and high-level analysis sets companies up for long-term success. At KPMG, we help ensure that your business is ready before it is sold or goes public and we emphasize planning and execution to create value, regardless of the exit chosen.