The initial public offering (IPO) process presents unique challenges and is best conducted with an experienced and knowledgeable team at the helm.
- margarethcubo
- May 13, 2024
- 2 min read
M&A advisory teams are composed of multidisciplinary groups, including advisors, banks, lawyers, auditors, and accountants, working together in key phases for an IPO:
A. SHAREHOLDERS' MEETING APPROVAL PROCESS (for closed-end corporations) or MEMBERS' MEETING (limited liability companies):
Partners, directors, advisors, and banks work on the proposal, objectives, business plan, and financial projections for the IPO.
B. REVIEW AND ENDORSEMENT OF FINANCIAL STATEMENTS:
Advisors, auditors, and accountants work alongside the management. Financial statements from the previous five years are carefully reviewed and, if necessary, restated to comply with Generally Accepted Accounting Principles (GAAP).
C. NEGOTIATE AND SIGN LETTER OF INTENT WITH INVESTMENT BANK:
Advisors and lawyers work with the management in selecting investment banks, defining terms, and drafting the letter of intent to formalize the relationship, setting investment bank fees, offering size, price ranges, and other negotiation parameters.
D. DRAFT THE MARKET PROSPECTUS:
Advisors, lawyers, and the bank work with the management in drafting and defending the prospectus to the Board of Directors.
E. DUE DILIGENCE:
Auditors and accountants work alongside the management.
F. PRELIMINARY PROSPECTUS:
Advisors, banks, and lawyers work with the management. A preliminary prospectus must be submitted to the Securities and Exchange Commission (CVM), which typically provides comments and guidance for improvements and additional requirements
G. FORMATION OF BANK CONSORTIUM:
Banks and advisors work with the management. The contracted bank forms a consortium with other investment banks, jointly attempting to sell portions of the offering to investors. This work often generates useful information to help management and advisors narrow down the stock offering price range based on investor reactions.
H. ROADSHOW:
Banks and advisors work with the management. In this phase, the company's management, supported by banks and advisors, holds a series of meetings with potential investors and analysts. This roadshow is a formal presentation by the management on the company's financial situation, operations, performance, markets, and products or services. Potential investors and analysts then ask questions about the company.
I. FINALIZATION OF THE PROSPECTUS:
Banks and advisors work with the management. After the CVM declares the registration effective, the company can release the prospectus in the open market.
Given the essential role of advisors in the above steps, Terus Consultoria works with clients who have a vision and plans for an IPO in 2024 or 2025 at every stage.
Be one of them! Seek guidance from Terus Consultoria now!
"Terus, intelligence, advisory, concrete cases, and objective actions!"
Contact Terus right now: contato@terusconsultoria.com.br / +55 011 2503-6747.
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