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IR and communications<br />
5.1 Preparing an IPO communications<br />
strategy<br />
FTI Consulting<br />
There is a strong temptation to view IPO<br />
communications as a listing-day event,<br />
meticulously planning for the inevitable<br />
publicity surrounding day-one trading. In<br />
reality, preparation should begin well before<br />
the registration statement is filed to ensure<br />
consistent messaging and a strong baseline<br />
of communications before the “quiet<br />
period” begins.<br />
Although the IPO prospectus will<br />
be the primary selling document for the<br />
offering, investors and media will look<br />
as broadly as possible for further insight<br />
into the company, its business and its<br />
competitive position. The company should<br />
therefore conduct a thorough assessment<br />
of its brand and reputation, as perceived<br />
by customers/clients, employees, vendors,<br />
regulators, industry analysts and other key<br />
stakeholders as early as possible in the IPO<br />
process so that any remedial actions can<br />
be taken before it becomes constrained<br />
by quiet period rules. Generally,<br />
communications made more than 30<br />
days before the filing of the registration<br />
statement will not be considered<br />
impermissible “gun jumping,” as long as<br />
they do not talk about the offering.<br />
In particular, the company should<br />
review any public commentary about<br />
its financial results or growth prospects<br />
to identify discrepancies between what<br />
previously was disclosed/anticipated and<br />
the information that will be presented in<br />
the upcoming SEC filings.<br />
The company’s communications<br />
review should include the following:<br />
• Media relations activities—the<br />
IPO will attract attention from an<br />
expanded media universe focused<br />
on performance, growth potential<br />
and other financial events. While<br />
the majority of the work in building<br />
these new media relationships begins<br />
after the quiet period, the company<br />
should ensure that key industry<br />
reporters accurately understand its<br />
business strategies and differentiators<br />
in advance of the initial filing of the<br />
registration statement. Activities could<br />
include a series of reporter briefings<br />
(assuming an appropriate news hook),<br />
a review of boilerplate language,<br />
updates to executive biographies and<br />
the creation of company fact sheets,<br />
which can be posted to the website.<br />
Additionally, the company should<br />
review its press release strategies<br />
to maximize opportunities for a<br />
consistent flow of announcements<br />
during the quiet period (i.e., establish<br />
a baseline of new product/client<br />
announcements, key milestone<br />
updates and other news to avoid the<br />
appearance of “gun jumping” during the<br />
registration period).<br />
• Website—many prospective investors<br />
and covering reporters will visit the<br />
company’s website, so it is important<br />
that the site reflects the image the<br />
company wishes to convey, that<br />
corporate information is easily<br />
accessible and that all data points<br />
are consistent with those provided<br />
in the IPO registration statement.<br />
In addition to reviewing the site for<br />
accuracy, the company should consider<br />
adding information about its mission,<br />
vision, and values; an online media<br />
kit; executive biographies; lists of<br />
historical accomplishments and other<br />
reference documents. These materials<br />
will be important media and investor<br />
relations tools to bridge the gap when<br />
communicators are unable to speak<br />
directly with their constituents.<br />
• Marketing materials and other<br />
customer communications—<br />
the company should review its<br />
marketing materials and customer<br />
communications to ensure that<br />
messaging and statistics are<br />
consistent with the language in the<br />
IPO registration statement. Equally<br />
important, it should train public-facing<br />
employees (e.g., receptionists, sales<br />
force, customer service representatives<br />
and others) to respond to external<br />
inquiries within the confines of SEC<br />
regulations and to forward questions<br />
outside their respective areas of<br />
responsibility to the appropriate<br />
communications representatives.<br />
• Employee communications—as with<br />
any major change, an IPO can lead<br />
to employee uncertainty. Employees<br />
may have questions about how the<br />
IPO will affect their jobs, what new<br />
opportunities are available and whether<br />
they will be able to purchase shares.<br />
Additionally, they must understand<br />
that compliance with disclosure rules<br />
and internal control requirements is<br />
everyone’s responsibility and that there<br />
are repercussions for the individual<br />
and the organization for not adhering<br />
to these rules. Training and education<br />
on the IPO process—articulating the<br />
expected milestones—as well as setting<br />
clear expectations about what it means<br />
to be part of a public company, will<br />
help eliminate confusion.<br />
• Business partner communications—<br />
outreach to this group is very much<br />
contingent upon the degree to which<br />
relationships with business partners<br />
are expected to change following the<br />
listing, if any. A company may be<br />
required to disclose information about<br />
its top vendors or customers in its<br />
registration statement and subsequent<br />
filings with the SEC following the IPO.<br />
In these cases, outreach to inform<br />
partners of the required disclosure<br />
or to communicate any changes in<br />
interaction with them may be advisable.<br />
Additionally, management may want to<br />
consider communicating to business<br />
partners more generally around the<br />
IPO listing to promote the message<br />
of “business as usual” or to reinforce<br />
the benefits (e.g., growth, investment,<br />
change in capital structure) of the<br />
transaction.<br />
Among the company’s most<br />
important tasks in building out a<br />
communications platform as it prepares<br />
to go public is the development of a<br />
comprehensive strategy to interface with<br />
a crucial new audience—the investment<br />
community. The way in which the<br />
company communicates to the financial<br />
markets significantly impacts its status<br />
in its industry, the perceived value of its<br />
business, management credibility and<br />
ultimately the valuation of its securities<br />
in the markets.<br />
Preparing for an IPO includes<br />
establishing protocols for how the<br />
company will engage with investors, what<br />
information and operating metrics it will<br />
provide, how it will report its financial<br />
results and what communications channels<br />
it will use. The IPO process will place the<br />
company under acute public scrutiny and<br />
set in motion a whirlwind of activity. It is<br />
50 NYSE IPO Guide