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INITIAL PUBLIC OFFERING ADVISORY

Houlihan Smith & Company’s IPO Advisory division guides clients through the critical decision to go public through an Initial Public Offering (“IPO”). Going public is a major step in the development of every company, and Houlihan Smith & Company’s IPO Advisors help clients evaluate the appropriateness of an initial public offering and execute a public offering. The initial public offering (IPO) process is fast-paced and difficult for management teams that are unfamiliar with the process. The market (represented by investors) will ultimately determine if a deal is completed or not, and at what price. However, an insightful, current business valuation provides company management and its shareholders an excellent foundation for IPO pricing negotiations with underwriters.

With the IPO, a company secures the necessary financial means for internal and external growth. Implementing an IPO is a complicated and time-consuming process that requires the involvement of an experienced advisor to help address the numerous issues and problems, and achieve a successful offering. Houlihan Smith & Company’s IPO Advisory division provides comprehensive advisory services to support financing and navigate through the substantially increased demands from the capital market. Houlihan Smith & Company has the breadth and depth of expertise of not only our IPO Advisory division, but the expertise of a full-service investment bank able to guide you through all processes that may arise.

Our services are designed to assist business owners at every step of the process.

  • Our team will assist in determining whether an IPO is the right step in the company’s development
    • We will assess whether the business is ready to operate as a public company, including reviewing the following areas:
      • Does the company have a sufficient system of internal controls given Sarbanes-Oxley requirements?
      • Is there sufficient financial information available to meet registration requirements?
      • Does the company have appropriate compensation arrangements in place with key executives and employees to retain and motivate them in the public environment?
    • Through the integration of our various other practice areas and creating an Initial Public Offering roadmap, we can supplement the company’s resources to address these and any other needs that are identified in the overall assessment.
    • If an IPO isn’t the right step our Strategic Group can help identify potential alternatives, including joint venture opportunities, strategic investors, or sale or merger opportunities.

Going Private

While it may be advantageous for privately held companies to go public, a "going private" transaction may be an excellent vehicle for a public company that has determined itself to be undervalued in the marketplace. A "going private" transaction reclassifies a public company to a private company. While anyone can initiate a "going private" transaction, a group of insiders (majority shareholders or management) or a group of affiliates is often the initiator of "going private" transactions.

"Going private" can benefit three major parties to the transaction, whereby i) the shareholders in the company are typically offered a premium to the current stock price, ii) the acquirers are typically buying the company at a discount to the price paid for a comparable privately held company, and iii) the management team receives new financing and often times a better incentive package.

Over the past 10 years, "going private" transactions have increased in popularity partly due to an increase in compliance and insurance costs, the ability to contain confidential information. The acquirer, the board of directors and the special committee to the board of directors can help protect themselves by engaging an independent financial advisor who understands the "going private" process and can opine upon the fairness of the proposed transaction.

Houlihan Smith & Company’s Advisor’s are experts at leading companies through the process of "going private." If you or your firm has questions about the "going private" process or fairness issues related to any business combination, please contact Houlihan Smith & Company, Inc. at 312-499-5900.