While the markets are in turmoil, it may seem strange to talk about a listing on Nasdaq. But there is a considerable amount of background work that can be done to ensure that you and your business are “transaction ready” and can move quickly when the opportunity arises.
Any listing, whether on a domestic or a foreign market, is a formidable and expensive task and potentially distracting to senior management. The in-house legal function can play a key role in insulating the business from this.
A listing is a multi-disciplinary process that touches all parts of the business, all of which must be managed. It includes:
In-house:
- finance;
- marketing;
- the board;
- HR;
- legal; and
- company secretarial;
External advisers:
- auditors;
- UK and US counsel; and
- bankers.
The in-house legal team is well placed to co-ordinate these disciplines, as the listing is in essence the filing of legal documentation with cross-functional support, in-house and outside.
With such a broad grouping of interests, there is a danger of meetings with 20-30 attendees. Try to avoid this because they are rarely productive and are costly, in time and in professional fees. A small working group of six to eight people is big enough, as long as they represent the constituencies of the larger grouping.
A weekly list of issues outlining everyone’s responsibilities is a useful tool for keeping the wider group up to date and acts as an effective aide-memoire.
It is advisable to appoint someone, such as your chief executive, to keep any internecine struggles under control and harness wayward advisers.
The following are the key issues:
Data room
A secure comprehensive data room is a boon, as there will be a broad constituency of people who will need to perform due diligence on the company materials as part of the verification process.
Unlike the UK process, it is the legal advisers who have to give the comfort to the bankers. As well as the legal advisers, the underwriters’ counsel will also require access because it is they who will be writing the 10 (b) (5) opinions for their clients.
Do not be surprised to find that if you are an in-house lawyer, the underwriters’ counsel will be expecting an opinion on the company’s memorandum, articles and corporate capacity from you.
Apart from the usual content of the data room such as statutory documents and directors’ contracts, you will need several other documents, including customer contracts (if you mention the customers in the business description), materials relating to executive officers, market research reports, trademarks and patent applications.
The sooner the room is established and catalogued the easier your life will be.
It is also sensible to appoint one person to the key role of ensuring that the contents are updated to reflect the latest draft of the registration statement.
