Ways to go public

If a company is considering going public, there is more than one way to accomplish that. On the one hand, there is the possibility of going public through a standard initial public offering (IPO) on the Swiss stock exchange. On the other hand, there is also the possibility of going public using a Special Purpose Acquisition Company (SPAC).

If a company decides to go public in the conventional way, the following steps are to be taken. First, the company’s structure and corporate governance should be examined to determine whether they are adequate to be listed on the stock exchange. Then an initial valuation of the company must be conducted, and a due diligence process must be started. Furthermore, research and disclosure requirements should be established and listing documents should be prepared. In the same phase, a bank syndicate should be chosen to provide support on the way to the IPO. Once these steps have been taken and the listing documents have been filed, it is time for the launch. The IPO is announced and the price range for shares is published. As mentioned, the IPO process is only one way of going public. The other option is through the SPAC, which is explained in the following section.

The SPAC is a shell company with no operations and no assets that is formed solely to raise capital through an IPO to then subsequently acquire or merge with an operating company. This leads to the operating company being listed on the stock exchange. The SPAC has many advantages, especially for smaller companies. There is no need for time-consuming investor marketing or an expensive listing project. Depending on the contract with the sponsors, one could even say that the operating company has no downside by going public via a SPAC. However, this depends on various factors such as possible contractual penalties or unusual concessions in the contract with the sponsors. More detailed information on the functionality on how SPACs work can be found in our focus article.