The AIM

[Obiwonkeyblokey]

Morning Guys

Does anyone have experienc eof taking a company on the AIM. Its something Ive been thinking about doingin 3-4 years time and if we go that route I would like to start preparing the company now in the best way.

Ive read through the various LSE websites and know about Nomads etc. but in simple terms ( which I can relate to!) what size of busness would you typically need to be to qualify and how long does the process take?

The reason for doing it is part of a potential exit strategy for 2012.

Thanks

O

[wattsm666]

My guess you probably need to be worth £20m minimum at float, but probably want to be considerably more than that. The costs involved are high and it might be appropriate to consider a trade sale or an exit to a private equity house/management team.

[Obiwonkeyblokey]

Thanks Michael,

Thats the sprt of figure we are hoping for. The plan is 3-4 years away and we figure that if we set the business up for a possible AIM float, then it is also in its best "condition" to be sold or MBO.

Owen

[flyingjase]

Hi Owen

Agree with you on the thinking ahead around structure and governance, however I would question whether AIM is actually an exit strategy, certainly in the short term after IPO. Unless you have someone in place with a proven ability to drive your business forward, investors will be looking for you to stick around and move it forward. Also the drivers around AIM IPO are usually to raise cash for future growth, not to line the pockets of the Directors!

Good luck with it

Jason

[ginettag27]

Searched for a couple of links that may help..

http://www.mybusiness.co.uk/YawrbFdoAI8d7Q.html

http://www.businesslink.gov.uk/bdotg/action/detail...

and also this link!

http://www.mccormicks-solicitors.com/news/get_pdf_...

What sort of business is it? Would other PHers be interested in investing in it?

[wattsm666]

Obiwonkeyblokey said:

Thanks Michael,

Thats the sprt of figure we are hoping for. The plan is 3-4 years away and we figure that if we set the business up for a possible AIM float, then it is also in its best "condition" to be sold or MBO.

Owen

Totally agree that you need to get your house in order for any exit plan, it will give you the best price with the least amount held back. Things to watch out for, that de-value a business significantly:

Undue reliance on a particular customer or group of customer

Undue reliance on particular members of staff (e.g. Sales consultants) or Directors - can the company run without them.

Watch for key contracts with customers/suppliers that can be terminated on a change of control, which would include a float. We see many profitable business that struggle with contracts like this.

This is just a starter, there are many other aspects. You will also need to ensure you have three years of audited accounts prior to float. So if your accounts aren't already audited start now, otherwise they will have to go back and audit the previous years accounts!

HTH

[Obiwonkeyblokey]

Thanks for the advice so far. The intention is to have 3 main managers running the business with me in the background. I have no intention of being the main controller of the business when the time comes.

I have recently put a share options scheme in place which ties these chaps in for the long haul. I have also appointed a qualified accountant who I have been working with for some time as a part time FD to start tidying up the loose ends.

Advice on 3 years audited accounts is very helpful as we have not been getting our accounts audited but intend to from this year so that we dont have to backdate them when the time comes.

Although this is not meant to be a cash cow for me, the two exit stategies I am looking at are the AIM and a sale to a third party. Both of these should enable me to walk away providing we start working on the company structure now and both of these should provide a cash windfall for those people who have been instrumental in the growth of the business.

I had a 10 year plan, the first 5 years have been and gone with great success, thankfully - now the hard work starts!

Thanks again

O