Article
Want to be ready for IPO? Prepare now with these six steps
Feb. 5, 2020 · Authored by Taft Kortus and Steven Schechter
If you have a transaction on the horizon — or you want to be prepared in the event that one presents itself — there are strategies and checklists across multiple areas of your business and personal finances that could make your business more attractive for a potential buyer.
Some of these benefit from being reviewed and monitored throughout your company’s life-cycle, which gives you time to make adjusts as needed:
- Executive retention
- Cybersecurity
- State and local tax liability
Here are three others to include on your pre-transaction list:
- Due diligence
- Personal financial plan
- Post-transaction integration
Unique M&A landscape
Technology, communications and media, and life sciences sectors have become the focus of mergers and acquisitions activity as they continue to attract more capital, even from suitors that have historically not paid attention to these sectors.
Transactions aren’t predicable anymore — an offer could happen tomorrow. While this could work to your benefit, it does create a more frantic mergers and acquisitions environment. Want to learn how to prepare for an IPO? The key is to prepare early so you’re ready when someone shows interest.
Ongoing assessments
Things move quickly once a transaction is in the works. With cybersecurity and tax efficiency, it’s best to assess your risk and liability, respectively, so you can make improvements prior to a transaction. The same is true of executive retention.
1. Executive retention
In today’s environment, if you have financial buyers, they’re investing in the future of the business, but they don’t want to necessarily run the business. If you can incentivize the executives to stick around for the second generation of owners, you could help alleviate transaction risk.
There are additional benefits from spending the necessary time and money to improve employee retention rates. Executive retention in particular supports:
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.
