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Corporate Finance

Opportunity to AIM high for Northern Ireland companies

Charlie Kerlin Charlie Kerlin

“Listing is only for large, established businesses.” This myth bears little scrutiny in reality.

Following the recent admissions of Diaceutics and Fusion Antibodies, the potential of a listing on the London Stock Exchange has become a keen topic of discussion for ambitious SME businesses in Northern Ireland. Growing businesses need funding, and one, often overlooked option, is the public markets. Markets are sector agnostic but require a strong growth story underpinned by a credible management team.

Grant Thornton has been the leading independent nominated adviser (NOMAD) to Alternate Investment Market (AIM) companies in recent years, having completed over 250 transactions. In that time, Grant Thornton’s AIM listed clients have raised in excess of £3 billion in the primary and secondary markets.

Whilst listing on a stock market is not for everyone, there are clear benefits for those that are currently on the public markets. As noted earlier, the ability to raise external finance substantially improves with a listed entity. In addition, companies indicate that they find it much easier to conduct Merger and Acquisition (M&A) activity with the ability to pledge shares and cash for consideration. With listing there is also a clearly established valuation for the business, which sets a benchmark for pricing of acquisition targets.

In the war for talent, many companies see the increased profile of a listed company as being an attraction for new recruits. With the ability to have a ready-made market for shares, this can provide a distinct recruitment advantage for companies.

Listing on a stock exchange brings significant exposure to the company and its financial performance on a regular basis. The market capitalisation, reflecting the company’s current value, will move on a regular basis and can be impacted both positively and negatively in the short-term by market sentiment issues. A seasoned CEO of one of our clients indicates the importance of watching the share price but states that there is no substitute to strong communication of your plan and then hitting your numbers!

On 21 June we will be exploring the benefits and costs of IPOs in more detail in our Belfast office, assisted by input from our specialist Capital Markets team and CEOs of listed companies. To learn more please contact me at charlie.kerlin@ie.gt.com.