On January 20, 2015, the London Stock Exchange Group and Capital 33, in association with our partners, held a seminar discussing the benefits of listing on AIM, London's alternative investment market, for growth-oriented American companies.
The presentations include an overview of AIM, including why companies should consider a listing, the benefits of listing on AIM, a profile of AIM-listed companies, the steps to consider when preparing for an AIM IPO, a review of the legal issues involved, the role of accountants in an AIM IPO, and much more.
For more information, please visit www.Capital33.com
3. 3
London Stock Exchange Group - Depth and Breadth
Source: www.lseg.com
Primary Markets Trading Post Trade & Risk
Management
Information Services & IP
Technology
4. 4
Access to capital to grow the business –
both at IPO and further capital raisings
Monetisation route for earlier stage
investors
Broaden the shareholder base
Incentivisation of employees
Enhance profile & visibility - with
customers & suppliers
Currency to fund business acquisitions
& expand into new markets
Keep control of business destiny
What are the Benefits of Listing?
Access to deepest pool of international
capital in the world
Proven levels of sustained liquidity
Quality of advisory community and
sell-side research coverage
Choice of markets to cater for all
sizes and stages of company
Respected and balanced regulatory
environment
Enhanced profile and status
Most active European IPO market
Why Consider a Listing? Benefits of London
5. 5
Diverse & deep pool of
capital
Strong support from
institutions
Funding for acquisitions
& expansion to new
markets
Tax benefits
The Benefits of AIM
Access to
capital
Experienced
community
of advisers
Profile
Nominated advisers
Accountants
Lawyers
Banks/Brokers
Analysts
Financial PR / IR
Media
Visibility
Bargaining power with
customers & supplier
Access to incremental research
coverage
Marketability of stock
Global peer group
Balanced
regulatory
approach
Disclosure requirements
tailored to growing
companies
Based on EU FSAP
Directives & UK Prescribed
Market Regime
Local & International
investor confidence in
regulatory framework
6. 6
0
1
2
3
4
5
6
7
8
2009 2010 2011 2012 2013 2014
Moneyraised(£bn)
Further
New
1,104 companies*,
aggregate value of
£71bn (219 Int’l
companies)
A Snapshot of AIM
Source: LSE statistics, December 2014
* 37 companies either suspended or undetermined value
*ICB industry classification
Since 1995 over £89bn
raised in total (£50bn
through further issues)
Profile of AIM Companies Admissions to AIM – 2009 to 2014
Industries Represented – by Number of CompaniesFundraisings on AIM – 2009 to 2014
3
15
41
134
125
175
213
133
145
83
£1bn+£500 - 1bn£250 -
500m
£100 -
250m
£50 - 100m£25 - 50m£10 - 25m£5 - 10m£2 - 5m£0 - 2m
36
102
90
71
99
118
0
20
40
60
80
100
120
2009 2010 2011 2012 2013 2014
Numberofadmissions
UK Int'l
Oil & Gas, 130
Basic Materials,
170
Industrials, 184
Consumer Goods,
63Health Care, 78
Consumer
Services, 121
Telecommunicatio
ns, 16
Utilities, 15
Financials, 207
Technology, 120
7. 7
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
£0-25m £25-100m £100-500m £500m+
Avgdailyvaluetradedas%ofmarketcap
FTSE AIM All Share FTSE All Small
Liquidity and Investors
Source: Data from Bloomberg (6 month average daily value traded before end of December 2014). Liquidity Analysis shows median within each market cap range. FactSet
for institutional holders
*The FTSE All-Small Index consists of all the companies in the FTSE SmallCap and FTSE Fledging indices
• Deep pool of institutional capital, an active retail
investor base and specialist funds, including
AIM VCTs
• Supported by a dedicated network of market
professionals
• Liquidity is ultimately company specific,
dependent on factors including free float,
diversity of investor base & plans for future
liquidity events
Top Institutional Holders Market Value
Invesco Asset Management £1,640.8m
Hargreave Hale £1,141.3m
Henderson Global Investors £943.1m
Schroder Investment Management £919.6m
BlackRock Investment Management £803.1m
Standard Life Investments £766.1m
M&G Investment Management £601.5m
Barclays Bank Plc £577.6m
Liontrust Investment Partners £574.7m
Woodford Investment Management £522.9m
Number of companies in each index and market cap group
£0-25m £25-100m £100-500m £500m+
FTSE AIM All Share 425 243 140 13
FTSE All Small 31 83 253 23
AIM companies have comparable levels of daily liquidity to their Main Market peers*
70
75
80
85
90
95
100
105
110
Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14
FTSE100 FTSE All Share FTSE AIM100 FTSE AIM All Share
8. 8
US LSE Admissions in 2014
Main Market IPO
Money raised: $1.5 billion
Real estate fund
February 2014
AIM IPO
Money raised: $9.6 million
Health services provider
December 2014
Main Market IPO
Money raised: $257 million
Lease & asset finance fund
July 2014
AIM IPO
Money raised: $15.1 million
Human capital management
July 2014
Main Market IPO
Money raised: $199 million
Science & tech development
June 2014
SFM IPO
Money raised: $80 million
CLO investment fund
June 2014
Main Market IPO
Money raised: $58 million
Real estate fund
May 2014
Main Market new share listing
$60 billion share distribution
Global communications firm
February 2014
AIM follow on
Money raised: $10 million
Oil & Gas E&P
July 2014
13. Companies that May Qualify for AIM
• High-growth
• Revenue-producing (generally)
• Have an international component
• Can produce a healthy return
1/20/2015 www.Capital33.net 13
14. Why AIM Over US Public Markets?
• Less Complexity
• Lower Cost
• No Share limits
• No Min. Market Cap
• Lower Ongoing costs
• For growth stage companies
• Liquidity
• A different league to OTC,
NYSE MKT
1/20/2015 www.Capital33.net 14
15. AIM Business Verticals
• Finance
• Consumer Services
• Energy
• Healthcare
• Technology
• Industrial
1/20/2015 www.Capital33.net 15
16. The Capital 33 Process
1. Exploration
2. Due Diligence
3. Document & Roadshow
Preparation
4. Choosing Professional Service
Providers
1/20/2015 www.Capital33.net 16
5. Pre-IPO Process
6. IPO
7. Ongoing PR, IR, Content
Support
17. Other Reasons to Choose AIM
• Designed for Growth
• Secondary Market
• International Focus
• Potential Tax Advantages
1/20/2015 www.Capital33.net 17
18. Thank You!
James Wall
Principal, Capital 33
303-894-3130 ext.
3131
JWall@Agency33.com
www.Capital33.net
Vincent Dipas
Principal, Capital 33
303-591-7919
Vincent.Dipas@Comcast.net
www.Capital33.net
1/20/2015 www.Capital33.net 18
20. 20
Dorsey – A Global Business Law Firm
Dorsey is an international firm with over 550 lawyers in North America, Europe and Asia. Some of the world’s most successful
companies count on Dorsey to help them meet legal and business challenges. From technology, life sciences, health and pharma, to
energy, media, financial services and manufacturing, companies turn to us for assistance with legal issues that impact their business.
21. 21
Firm – Awards & Recognition
• Dorsey ranked No. 27 among the top 100 largest
securities practices in the U.S. by Law360.
• 105 Dorsey lawyers representing 57 practice areas
were recognized in the 2014 edition of U.S. News’
listing of Best Lawyers.
• Five Dorsey partners are members of the American
College of Trial Lawyers (ACTL). Membership in the
ACTL is by invitation only and is limited to only 1% of
total lawyers per state or Canadian province.
• In 2013, World Trademark Review recognized
Dorsey and six of its Trademark lawyers in its annual
World Trademark Review 1000 - The World’s
Leading Trademark Professionals.
• According to Thomson Reuters, Dorsey ranked No. 5
for the number of announced Mid-Market M&A deals
in the U.S. in 2013 (#6 for Small-Cap deals). Dorsey
ranked #6 for the number of completed U.S. deals
(any size) and #15 for the number of completed deals
worldwide in 2013.
• M&A Law Firm of the Year in China by Global Law
Experts in 2014.
• Dorsey has twice been named “U.S. Mining Law Firm
of the Year” by ACQ Magazine in its ACQ Finance
Magazine Country Law Awards. Dorsey was named
2011 “Mining Law Firm of the Year” by Lawyers
World Law Awards and 2011 “Law Firm of the Year –
Mining” by InterContinental Finance Magazine.
21
• Dorsey consistently ranks in the “BTI Client Service A-
Team” (including in 2014).
• Dorsey is recognized as a “Leading Firm" by Chambers
USA. Chambers USA also recognized 52 attorneys in 21
practices in its 2013 edition.
• Dorsey is an AMLAW 100 firm, according to American
Lawyer Magazine and a Top 100 Most Prestigious Firm
according to Vault.
• Dorsey was ranked in U.S. News 2015 Best Law Firms in
26 national categories and 102 local categories for various
metropolitan areas. 97 Dorsey lawyers were honored as
U.S. News 2015 Best Lawyers.
• Dorsey is the only firm ranked Top 10 by volume for US
M&A for each of the past 20 years (Thomson Reuters)
• Dorsey represents many well known Fortune 1000
companies throughout the US, including:
• UnitedHealth Group
• SUPERVALU
• U.S. Bank
• Hormel Foods
• St. Jude Medical
• Apple
• Procter & Gamble
• Medtronic
• Honeywell
• Delta Air Lines
• ConocoPhillips
• Micron Technology
• Wells Fargo
• The Mosaic Company
• Land O’Lakes
• Ameriprise Financial
• Target
• C.H. Robinson
22. 22
London – Overview
Services
Dorsey & Whitney’s London office serves as the backbone
of our European capabilities, providing excellent service to
clients globally.
Opened in 1986, it has grown to more than 30 partners,
associates and counsel. Our lawyers in the London office
have special expertise in the following areas:
• Anti-Corruption
• Construction and Engineering Projects
• Commercial Litigation
• Corporate and M&A
• Corporate Tax
• Emerging Companies and Venture Capital
• Employment
• Fraud and Regulatory Investigations
• International Arbitration
• International Banking and Finance
• International Capital Markets
• Intellectual Property
• Real Estate
Approach
• Our multi-jurisdictional and multi-lingual lawyers offer both
UK and US law capability in order to provide clients with the
most appropriate legal advice and services for their specific
needs.
• Lawyers in London regularly work in conjunction with
lawyers in the firm’s US and Asia offices on international
matters of finance, trade and commerce.
• The firm has developed a specialty in advising Norwegian,
Danish and Swedish companies on their entry into the
international capital markets and in working with global
companies accessing Scandinavian finance.
• The London office’s fraud and regulatory specialists
combine with US counterparts to provide an internal fraud
investigations service for clients with trans-Atlantic
interests.
• Dorsey’s London office prides itself on operating as a
stand-alone mid-market City practice with a cost-effective
offering.
23. 23
London – Awards & Recognition 23
• Firm and individuals ranked across multiple core practice areas by Legal 500 and by Chambers UK
• Corporate INTLMagazine Global Award named Dorsey’s London office:
o 2014 - Cross-Border M&A Law Firm of the Year (England) and Securities & Capital Markets Law Firm of
the Year (UK)
o 2013 and 2014 - Litigation Law Firm of the Year in England
o 2013 - Anti-Corruption Law Firm of the Year in England
o 2012 - UK Litigation Firm of the Year
• No. 1 underwriter counsel and No. 2 issuer counsel for AIM IPOs by deal volume in 2011 by Bloomberg.
• UK Capital Markets Law Firm of the Year for 2011 and 2012 by Lawyer Monthly.
• M&A Law Firm of the Year (UK) for 2014 by Finance Monthly.
• India Deal of the Year award in 2010, 2009 and 2007 by India Business Law Journal
24. 24
Liberty Global plc
$422m private placement and resale
shelf registration
Keywords Studios plc
£49m AIM IPO and £6m secondary
fundraise – advised Numis
Securities Limited as nominated
adviser and broker
Oxford BioMedica plc
£21.6m firm placing, subscription
and open offer – advised Charles
Stanley & Co. Limited and WG
Partners LLP
Velocys Group plc
£52m secondary fundraise –
advised Numis Securities Limited
as nominated adviser and broker
London – Capital Markets Transactions
Rightster Group plc
£70m AIM IPO and £42m secondary
fundraise – advised Cenkos
Securities plc as nominated adviser
and broker
Primary Health Properties plc
£82.5m convertible bond issue –
advised ISM Capital as lead
manager
Heritage Bank Ltd
$100m convertible bond issue –
advised 46 Parallel Ltd as
cornerstone investor
AudioBoom Group plc
Reverse takeover and AIM
readmission – advised Arden
Partners plc as nominated adviser
Monitise plc
£100m placing – advised
Canaccord Genuity Limited as
nominated adviser and broker
Quindell plc
£200m institutional placing
JKX Oil & Gas plc
$48m convertible bond issue:
placing and open offer
Digital Barriers plc
£25m AIM IPO and £30m follow-on
placing – advised Investec as
nominated adviser and broker
Bio City Development Company
$200m convertible bond issue –
advised ISM Capital as lead
manager
ClearStar Inc.
£20m AIM IPO and placing –
advised Cenkos Securites plc as
nominated adviser and broker
SKIL Ports & Logistics Ltd
£110m AIM IPO and Rule 144A
offering
Corero Network Security Plc
Strategic investment into AIM-listed
Corero Plc – and subsequent
placing and acquisition / reverse
takeover of Top Layer Networks Inc
25. 25
Advisers and their roles
Nominated
adviser
- Key role in judging whether the company is appropriate for listing and
advising on ongoing basis of company’s obligations
Nominated
broker
- Responsible for any fundraising at IPO and ensuring successful after
market in company’s shares. Usually same firm as Nomad
Reporting
accountants
- Reviews company’s financial results and reporting processes, prepares
accountants report on historic financial information, reviews company’s
working capital projections and reports on company’s financial systems
and controls
Lawyer - Advises on legal aspects of preparing a company for IPO, the duties and
responsibilities of directors of an AIM listed company and verification
process
PR advisers - Generate positive press interest in the company in advance of
fundraising roadshow
26. 26
Key work streams for AIM IPO
Financial, commercial and legal analysis of business
Due Diligence
Process
Independent research prepared and marketed by investment bank’s analystPre-IPO Research
Short presentation on investment case marketed by the companyInvestor Presentation
Full description of business including accountants’ report and legal reporting
obligations
Admission Document
Investment bank’s placing and underwriting obligations and director lock-ins
Placing/
Underwriting Agreement
27. 27
Potential issues to consider
Planned re-financings or disposals
Pre-IPO reorganisation
Corporate governance and other UK investor requirements
Directors service agreements/board composition
Any existing shareholders to remain significant shareholders on IPO
Management and major shareholders likely to be locked-in
Share option schemes/stock plans
28. 28
Biographies
Kate Francis
Partner
+44 (0)20 7031 3746
francis.kate@dorsey.com
Kate specialises in equity capital markets transactions and public and private mergers and
acquisitions. Kate has broad transactional experience in IPOs on AIM and the main market of the
London Stock Exchange (advising both companies (including non English domiciled companies)
and banks), secondary offerings, public takeovers (including public to private transactions), private
company acquisitions and disposals (both UK domestic and cross border), reorganisations, joint
ventures, capital reductions (both court approved and under the Companies Act procedure),
corporate governance, private equity and general corporate law matters.
Max Beazley
Partner
+44 (0)20 7031 3704
beazley.max@dorsey.com
Max’ primary practice focus is on cross-border mergers and acquisitions and equity capital markets
transactions. Max has extensive experience of UK and cross border private and public
acquisitions and disposals. Max represents banks and issuers on IPOs and secondary issues, both
on AIM and the main market of the London Stock Exchange. In addition to advising a number of
UK and US clients on commercial contracts, private equity, venture capital and angel investments,
Max also advises on the UK and EU securities law elements of cross border fundraising by foreign
and domestic companies, on UK corporate governance matters, and on banking and finance
transactions (advising both lenders and borrowers).
53. Raising Capital on the London Stock Exchange:
The AIM Exchange From an Energy Perspective
JON HUGHES
PETRIE PARTNERS
JANUARY 20, 2015
DENVER, CO
54. Introduction
Commodity Price Environment Overview
Comparative Equity Market Performance
Energy Equity Activity on AIM vs. U.S. Exchanges
Pros and Cons of AIM Listing for Energy Companies
Conclusions
54
Discussion Materials
TOPICS FOR DISCUSSION
55. Recent downturn in the energy markets is prompting energy companies of all
sizes to explore creative solutions to continue to grow
Increased market volatility has made the successful execution of energy
equity offerings more challenging and, in some cases, stalled them
completely
Capital intensive nature of the industry likely to present significant
challenges to smaller companies whose access to capital has tightened
Capital structure management will become a focal point for energy
companies as margins decrease and fundraising flexibility is diminished
across the industry
55
Discussion Materials
INTRODUCTION
56. $30.00
$45.00
$60.00
$75.00
$90.00
$105.00
$120.00
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Consensus Estimates
Historical Spot/Futures
$1.50
$2.50
$3.50
$4.50
$5.50
$6.50
$7.50
$8.50
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Consenus Estimates
Historical Spot/Futures
Current Spot
$3.09
Historical WTI Spot Pricing ($ / Bbl) Forward Curve vs. Spot Pricing ($ / Bbl)
Forward Curve vs. Spot Pricing ($ / MMBtu)
56
Discussion Materials
Historical HHUB Spot Pricing ($ / MMBtu)
COMMODITY PRICE ENVIRONMENT OVERVIEW
Note: Pricing per Bloomberg as of January 16, 2015. Consensus estimates based on Wall Street consensus per FactSet as of January 16, 2015.
Actual Futures
Actual Futures
$6.11
$7.51
$4.92
$3.77
$4.52
$7.92
$3.29
$3.94
$4.36
$4.00
$2.76 $3.74
$4.31
$3.03
$1.88
$3.18
$2.83
$1.82
$3.13
$2.75 $2.89
$1.50
$2.50
$3.50
$4.50
$5.50
$6.50
$7.50
$8.50
2009 2010 2011 2012 2013 2014 2015
YTD
High
Average
Low
$81.04
$91.49
$113.93
$109.49 $110.53
$107.62
$53.27
$61.99
$79.51
$95.04 $94.07
$97.98 $93.00
$48.76
$33.98
$65.96
$75.67
$77.69
$86.68
$53.27
$45.89
$30.00
$45.00
$60.00
$75.00
$90.00
$105.00
$120.00
2009 2010 2011 2012 2013 2014 2015
YTD
High
Average
Low
Current Spot
$48.69
57. 57
Discussion Materials
INDEXED PERFORMANCE (2014 – 2015 YTD)
Source: FactSet as of January 16, 2015.
40%
60%
80%
100%
120%
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15
IndexedPerformance(%)
S&P 500 – 9%
FTSE AIM All Share – (18%)
S&P Small Cap Energy – (41%)
WTI Crude Oil – (51%)
AIM Energy Index – (51%)
59. 59
Discussion Materials
ASSET PROFILES OF AIM ENERGY COMPANIES VS. SMALL CAP US ENERGY COMPANIES
Source: FactSet and company filings.
(1) Based on the AIM FTSE All-Share Energy index.
(2) Based on the S&P small Cap 600 Energy index.
85%
20%
0%
25%
50%
75%
100%
AIM Listed Energy Companies
with Non-U.S. Assets
U.S. Listed Small-Cap Energy Companies
with Non-U.S. Assets
(1) (2)
Small-cap energy companies with non-U.S. assets have shown a
clear preference to list publicly on AIM versus U.S. exchanges
60. BENEFITS AND CONSIDERATIONS FOR AIM-LISTED ENERGY COMPANIES
60
Discussion Materials
Opportunity to access a diversified
investor base
High number of recent small-cap
energy offerings vs. U.S. exchanges
Pragmatic regulatory approach
Listing requirements and issuance
costs favorable to smaller
companies
Strong visibility with premier
institutions
Better acceptance and typically
better valuation for companies with
non-U.S. assets
Institutional appetite for riskier
small-cap energy stocks in current
environment
Broader market uncertainty and
volatility within the Eurozone
Underperformance of AIM listed
stocks vs. U.S. equity market
indices
Recent decline in number and
volume of energy offerings on AIM
Benefits Considerations
61. Despite uncertainty and volatility in the broader market, energy companies
will still seek to secure financing to prosecute their (reduced) capital
programs – creative alternatives may drive successful execution
Continued commodity market headwinds may dampen investor appetite for
high-risk equity within a volatile sector of the market
AIM offers favorable listing requirements and issuance fees among the
lowest of all exchanges, potentially attracting a broader pool of small-cap
issuers
AIM has been a preferred market for listing small capitalization energy
companies with non-U.S. assets
61
Discussion Materials
CONCLUSIONS