Fundraising for growth: IPO vs. Private EquityPresented by Debbie Clarke, Partner, Chantrey Vellacott, DFK LLP

23 September 2014

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Contents

Options for Development Capital IPO vs. Private Equity Private Equity market returns & Case Study Are the Public Markets back? Public Market Case Study

2

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Options for Development Capital

3

Newsflash 2014: Funding is available for growth

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Options for Development Capital

4

Focus on Private Equity and IPO

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IPO vs. Private Equity (Pros and Cons)

IPO Pros

Public exposure (marketing)

Generate new investors (capital raising)

Cons Public exposure (always in the public

glare)

Compliance (increased costs)

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Private Equity Pros Funding flexibility (capital raising)

Board support (growth)

Cons 3rd Party Involvement (additional

stakeholders)

Possible loss of control (investor position)

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IPO vs. Private Equity (Preparation and Documentation)

6

Identify suitable advisers Early adoption of IFRS Corporate governance review

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IPO vs. Private Equity (Preparation and Documentation)

7

IPO Prospectus (published)

Long Form (private)

Short Form (published)

Working Capital Report (private)

Financial Reporting Procedures (private)

Private Equity Financial forecasts (private)

Business plan (private)

Share purchase agreement (private)

Investment agreement (private)

Identify suitable advisers Early adoption of IFRS Corporate governance review

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Private Equity returns

8

PE backed companies showing YoY increase in EBITDA, growth in employment and decrease in leverage

BVCA: 5-year IRR (2013) for surveyed funds covered was 11.1%, UK pension fund assets of 10.1% & FTSE All-Share of 14.3%

Corporate Venture Capital, UK lagging behind US and Europe

UK private equity returns 15.7% over last decade

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Case Study – Ministry of Cake

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150 years experience of manufacturing high quality desserts (producing over a million slices of cake a week).

From: Private acquisitive company; to Large corporate subsidiary; to Private again with support of LDC

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Are the Public Markets are back ?

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Focus on AIM Average market capitalisation £68.1m (median £22.1m) £4.16bn raised to July 2014, 113% of 2013 full year Most money raised in last 7 years

Can AIM reach 2004 levels?

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Widest range of sectors on AIM

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New AIM companies in 2014

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When to go to the market

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Markets are still volatile and investor appetite changes

3 year FTSE AIM All Share

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No one wants to have to buck a trend

13

Patisserie Holdings

Boohoo.com

Epwin Group

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Case Study – Patisserie Holdings Plc

Grew from 8 stores in 2006 to 138 Significant growth forecast through

further sites and brand acquisitions

14

Founded 1926

PE backed (2001)

Acquisition spree: * Druckers (2007)* Baker & Spice (2009) * Flour Power City Bakery (2013) *Philpotts (2014)

IPO on AIM (Jan 2014)

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Conclusion

Options for funding: availability strongest for last 8 years Private and Public Equity markets provide different options

for growing companies Prepare type of growth and funding required Should you remain private or benefit from public market

exposure?