Successful IPOs, Spin-Offs,
and Dual Tracks
How BCG Supports Effective Transactions

This brochure—one of a series of eight describing BCG’s capabilities
in deal transaction and integration—underscores the importance ofdeveloping a deep understanding of the nuances, complexities, andchallenges that accompany IPOs, spin-offs, and dual-track transactions.
Each type of transaction has unique characteristics on numerous
dimensions. These range from overall design, prospective proceeds forthe parent company, and the potential for capital increase to execution
risk, taxation implications, and shareholder-vote requirements.
This brochure offers insights and advice vital to enhancing the odds
that a transaction will deliver the intended value. It describes a threephase approach to effectively managing an IPO, spin-off, or dual-tracktransaction—starting with conceptualizing the transaction, then moving
to preparing for and finally executing the transaction. For each phase,
we offer tips and tactics for success, and highlight how BCG helps clients
through every step of the transaction.

BCG Has Supported Many
IPO, Spin-Off, and Dual-Track
Transactions.
Imagine What We Could
Do for You
A PROVEN, TIME-TESTED APPROACH
As companies craft strategies for future
growth, executives may consider embarking
on transactions such as IPOs, spin-offs, anddual-track moves (preparing for an IPO whileremaining open to selling part or all of thecompany directly to a private equity investor or
another company). Indeed, many IPOs progress
as dual-track projects: They are initially planned
as IPOs, but ultimately conclude as privatetreaty bids.

IPOs VS. SPIN-OFFS VS. DUAL TRACKSNot all companies that decide to exit and float
all or parts of their businesses through stock
markets choose an IPO—some decide to do aspin-off or a dual track. These transactions differ
on several dimensions, including how shares arehandled, whether the parent company receives
proceeds, and how much execution risk isinvolved.

BCG helps clients compare the pros and cons ofeach approach and arrive at the right decision
for them. And, once they’ve chosen to go with an
IPO, a spin-off, or a dualtrack, we work with themevery step of the way—to help ensure that thetransaction delivers the promised results.

Dimension

IPO

Spin-Off

Dual Track

Overall design

Existing or new shares of
IPO-Co are sold to newinvestors

Shares of Spin-Co are
distributed to existing
shareholders

Pursuing IPO or private treaty sale directly
to a strategic or financial bidder

Proceeds forparent company

Value of existing shares
are offered in the IPO

None

For trade sale: proceeds going directly toparent company

Capital increase

Optional

None

Only possible in IPO option

Execution risk

Higher, since timing
and valuation of the IPO
depend heavily on equity
market conditions

Lower, since the company
doesn’t initially have toattract new investors

Lowest, since trade-sale route doesn’t relyon public market sentiment and private
route may allow deal execution even underadverse conditions

Taxation

Cash proceeds are taxable Tax-free to both thefor the seller of the shares parent company and its
stakeholders in mostjurisdictions

For trade sale: could attract capital gains tax

Shareholder vote

Required

Required for IPO; only needed in trade sale
if major asset divestment

BOSTON CONSULTING GROUPNot mandatory in mostjurisdictions

02

No matter which path a company ends up
taking, these transactions all call for effective
collaboration among numerous players over long
periods of time. Key participants may range frominvestment banks and law firms to accountants
and multiple functions within the organization.

2 months

Confronted by such complexity, many organizations
struggle with how best to conceptualize, prepare
for, and execute the transaction. To ensure thatthe transaction delivers the intended results, BCG
has developed a proven, three-phase approach for
managing the challenges.

5 months

5 months

Phase 1:

Phase 2:
PrepareExecute• Understand IPO
implications• Understand investor
universe and expectations• Finalize and gain approval ofprospectus• Check IPO readiness• Build strong equity story• Plan carve-out• Prepare prospectus andother filings• Prepare analyst presentations andinvestor roadshows

Conceptualize• Review business planand draft cornerstonesof equity story• Decide on capital structureand dividend policy

03 							Phase 3:• Conduct investor education androadshows• Conduct book-building and pricing

SUCCESSFUL IPOs, SPIN-OFFS, AND DUAL TRACKS

Go
publicPHASE

1
Conceptualize

ARE YOU READY?
Clearly, transactions such as IPOs, spin-offs,
and dual tracks can deliver significant proceeds
to the seller and provide the new company
with access to capital markets in the future.
But before executives can decide whether atransaction under consideration makes the mostsense for their company, they should define asound concept for the strategy.
There’s much to consider here. For example,
once a company goes public, it will have to not
only continue competing for customers in its
chosen markets but also start competing forinvestor funds. Management will need to answer
to investors as well as to analysts, who will all
keep an eagle eye on the company’s financial
performance and management practices.
So, the crucial question becomes: “How readyare we for this transaction?”
To help companies assess their readiness forthe capital markets, BCG uses a comprehensive
approach that zeroes in on three readinessdimensions: (1) strategic and financial, (2)reporting, and (3) corporate and governance.
This approach helps illuminate any readinessshortfalls or gaps and can point executives’attention to areas that need addressing to
improve the chances of a successful transaction.
STRATEGIC AND FINANCIAL READINESSWith an IPO, once under the spotlight of capital
markets, management needs to regularly review
and, more importantly, deliver against thecompany’s financial targets. A sound businessplan at the time of the listing preparation is thus
crucial for IPO success and future capital-market
performance.

BOSTON CONSULTING GROUP

Even though the company can’t disclose its plan
to investors in detail, the plan constitutes apivotal part of a successful IPO. Having a soundbusiness plan in place early in the process helps
the company understand how well positioned it
is compared with its peers and what valuationlevels it can expect. It also helps management
make the right decisions regarding capital
structure and dividend policy. After the IPO,
the business plan helps management meet thecompany’s financial targets and win the market’s
trust—and thus attract additional investors.
BCG works jointly with clients to make theirbusiness plan “investor proof.” That is, we put
ourselves in the shoes of different investor groups
to challenge the plan’s substance, its granularity,and its ambition level compared with those of its
peers.
Together with our clients, we help define levers
for improving a company’s performance, andprepare rigorous implementation plans to ensurethat the resulting effects are visible in time forinvestors to recognize them in the IPO.
Building on the business plan, we develop thecornerstones of the equity story, including an
initial set of investment theses and a clear
articulation of the IPO’s strategic intent.
We formulate initial storylines for all of acompany’s businesses—the pearls, certainly,
but also businesses that may be more difficult
to communicate to the market. Additionally, weclosely analyze peers’ equity stories, with an eye
toward understanding how they present theiroverall business and their business segments tothe market. The business plan and equity story
are closely interlinked.
Their consistency is a key success factor in
IPOs; therefore, development of both should go
hand-in-hand.

04

REPORTING READINESSAll companies seeking to go public face amajor challenge: establishing processes andinfrastructure for creating and publishing
financial statements and data on key
performance indicators (KPIs). Such reportingmust meet the strict content and timing rules
required by capital markets (e.g., quarterly
financial statements). Companies must also
compile a comprehensive set of historicfinancial and non-financial data to include in
the IPO prospectus.
BCG helps companies understand these andother reporting requirements and assess
their current setup, so that they can identify
and address any gaps. We also ensure that
the KPIs foreseen for future capital-market
communications are reflected in the historicfinancials, so that analysts and investors havea consistent set of data on hand to informtheir investment decisions.

CORPORATE AND GOVERNANCEREADINESS
In cases in which a company plans to set up an
IPO for only parts of the business, a detailed
carve-out concept is required to separate“IPO-Co” from “Old-Co”—legally, financially,
and operationally. BCG helps clients plan andrun the carve-out process to ensure that IPO-Co
is sufficiently independent by the target IPO date.
Going public also requires a strong governancestructure that complies with relevant regulatory
mandates, such as an independent board andspecial committees. In addition, it calls forchanges in a company’s existing corporate
structure and the capabilities it will need tosucceed. From strengthening the accounting
department to assembling a powerful investor
relations team, BCG helps organizations navigate
these required changes and build the expertisenecessary to go public.
Once executives feel confident about theirorganization’s IPO readiness (or about theirability to close any readiness gaps), they canturn toward the next phase in the IPO process:preparation of the listing.

Creating an Investor-Proof Business PlanQUESTION

FOCUS

TIPS

Are planassumptions
and outcomes
substantiated?

Analyze theplan content
and structure• Review the completeness and overall buildup of the plan
• Test for deviations from trends and from the prior management plan
• Scrutinize all key assumptions• Check for consistency throughout the planIs the ambition Extensively test • Use external market data and benchmarks
level sufficient? targeted growth • Challenge against BCG best practices and peers’ performancelevels• Compare financials with analyst expectations• Assess the magnitude and criticality of deviations for the transaction

Can the plan
be further
improved?

Activate levers
for unlocking
value• Define improvement levers and quantify their potential impacts,
including timing• Consider interdependencies• Prioritize levers with the highest impact• Craft plans for activating top-priority levers

BCG ADDS VALUE IN THESE WAYS:• Helping companies understand what’s needed to successfully compete for investor funds in their industry• Evaluating and improving companies’ strategic and financial readiness for an IPO by examining theinvestment proposition and the business plan from the capital market’s perspective and implementing
improvement measures• Supporting the company to plan and fulfill all other requirements ahead of an IPO decision, such as an
operational carve-out

05 							SUCCESSFUL IPOs, SPIN-OFFS, AND DUAL TRACKSPHASE2
PrepareHAVE YOU SET THE STAGE FOR A SUCCESSFUL LISTING AND MAXIMUM VALUATION?
During the IPO preparation phase, companies
must ensure that all requirements of the IPO
are met, present the asset in such a way that the
maximum valuation and the targeted proceedsfrom the IPO can be reached, and continue
running their day-to-day business effectively.
To meet these imperatives, companies need to
identify and thoroughly understand their future
investor universe. Leadership must develop a
convincing equity story and prepare accurate
and comprehensive filings for the regulator
and the listing venue. They need to decide on acapital structure and dividend policy and makeconsidered decisions regarding the offering’s
technical parameters.
BCG helps clients manage these responsibilities
effectively and efficiently.
UNDERSTANDING THE FUTUREINVESTOR UNIVERSE
To prepare their company for life in the publicmarket, executives must understand who isgoing to invest at the IPO and afterward, andwhat these investors will expect.
A good starting point for building thisunderstanding is to analyze peers’ shareholder
structures to identify prospective individual
investors and investor groups, such as pension
funds, asset managers, hedge funds, and retailinvestors. The next step is to understand theseinvestors’ expectations. For instance, are they
anticipating a constant dividend yield, or are
they looking for aggressive growth at the expenseof lower payouts?

BOSTON CONSULTING GROUP

Companies need to identify
and thoroughly understandtheir future investor universe
Articulating these expectations helps acompany frame its future investor base. This
understanding should influence the strategic
and financial plan that the company presents
to the market.
For example, if the company decides to target
yield-seeking investors, it should orient its
dividend policy, capital structure, and businessplan toward strong cash-flow generation. If thehigher payout will limit the company’s ability toinvest in growth, that fact needs to be reflectedin the equity story.
If all of this sounds complex, that’s because it is.
BCG helps by working with clients to navigate
the investor universe. We apply proven tools toanalyze peers’ shareholder structures and to
identify different investor groups’ expectations.
We conduct in-depth interviews with fundmanagers and analysts to understand theirviews on the industry or sector in question andtheir criteria for identifying the most attractive
assets. We also bring our considerable
expertise in an array of industries. We knowwhat cycle each industry is in, where companies
are in that cycle, and what implications these
realities have for a company’s IPO strategy andinvestors’ expectations.

06

DEVELOPING AN EQUITY STORY
To conduct a successful IPO, companies have toconvince investors and analysts of the offering’svalue ahead of the listing—that’s where a goodequity story can make all the difference. It is thetool for differentiating a company from peers
competing for the same pool of investor funds.
The equity story focuses on the information
most important to investors. These include thekey differentiators between the company onoffer and its peers, a detailed discussion about
and substantiation of the company’s investment
highlights and strategy, and an in-depth lookat the business’s financials. Making thingseven more challenging, the company needs toconvince investors of its value under the capital
market’s tight disclosure rules. Unlike in a
trade sale, the company cannot present the fullbusiness plan to investors and analysts. It can
only provide guidance on a few KPIs.

07 							Companies have to convince
investors and analysts of theoffering’s value ahead of the
IPO listing

SUCCESSFUL IPOs, SPIN-OFFS, AND DUAL TRACKSBCG helps clients formulate their key investment
highlights and pressure-test them to see how
well substantiated they are so that they can be
refined as needed. We then work with clients togenerate accurate and convincing details to craft
the most compelling equity story possible.
We also know that an effective equity story
must be more than just a story. To that end, we
help clients thoroughly evaluate the data theymust provide to meet investors’ and analysts’
expectations. We also help them identify the
optimal way to report their business to themarket, such as how to segment the business
and which KPIs to use.
We then draft the equity story and build thefinancial and non-financial data repository. In
addition, we work closely with the business’s
segments to distill the best possible proof points
for substantiating the investment highlights andto differentiate the company from its peers. We

THE SECRETS BEHIND SUCCESSFULEQUITY STORIESBuilding an effective equity story isn’t as easy as
many might think. And here’s why: How companies
think about themselves doesn’t necessarily gel withwhat the capital market cares about most. The fact
is, most investors and analysts don’t get carried awayby the usual language that companies use to describe
themselves, such as “market leader,” “innovation
champion,” “unique,” “agile,” “lean,” and “global.” Ifsuch language isn’t backed up by substance, investors
and analysts will dismiss it—and put a discount on thevaluation. What’s more, companies seeking to go public
have to paint a picture of the future without being
able to share a detailed outlook on their strategy andfinancials—a challenging task, indeed.
Drawing on our work with clients, we’ve developed a setof best practices for crafting a strong equity story.
• Pick the right peers to compare your company
against: Select peers in your equity story thatwill guide investors and analysts to your targetedvaluation levels. The right peers will also serve asa measuring stick for your preparation work, by
setting the financial and non-financial bar yourcompany must meet to convince investors of its
value.
• Challenge yourself: Ensure that each claim inyour equity story can be compared to your peers’

BOSTON CONSULTING GROUP

also join forces with the CFO to create a financial
section in the equity story that sets the rightaspiration level for investors and that proactively
addresses their questions.
Most equity stories are also accompanied by
an extensive appendix containing data on thecompany’s operations, such as technical details
about its manufacturing plants, products, anddistribution channels. We help companies collectand review all such data to ensure consistency
with data used in previous disclosures and othertransaction documents.
To set the stage for successful execution, we help
clients distill the content and data in the equity
story into presentations customized for analyst
and investor meetings; for example, early-lookmeetings, pilot fishing, and roadshows.

position. By doing so, you’ll address all themes
relevant to your potential investors and analysts.
And, you’ll validate whether your company truly
has a unique position in its industry—or if it’s
merely a copycat. This exercise helps you see
where you can look for a premium compared toyour peers’ valuations and where your story needs
strong lines of defense.
• Prove your points: Thoroughly substantiate
each claim in your equity story, ideally byexplaining tangible initiatives that your company
has implemented—such as recent M&A activity
that strengthened your product offering, or
improvement programs that addressed operational
challenges. Make sure the initiatives behind your“proof points” are reflected in the financials at thetime of the IPO, so that you get credit from thecapital market.
• Show your commitment to value creation: In
your equity story, explain how your company’s
strategic priorities, such as top-line growth, margin
expansion, or cash generation, translate directly
into shareholder value creation. Communicate
clear ambition levels for all such drivers todemonstrate your commitment to the market.
• Build a spot-on financial section: Tailor yourselection of KPIs and your presentation offinancials to what investors and analysts care about
most. Make sure the numbers are consistent withinformation provided in previous announcements.

08

PREPARING REGULATORY FILINGS
To apply for an IPO, companies must compile
a number of documents for filing with the local
regulator and targeted listing venue. The mostprominent among these documents is the IPO
prospectus. Local legislation specifies the exact
content required in the prospectus; in every
case, the prospectus must provide investors
with essential information, such as a detailed
description of the business and its risk factors,
the IPO’s purpose (including planned utilizationof the proceeds), listing details, shareholder
structure and governance, and information on
capital structure and taxation. The prospectus
also includes historic and audited financial
statements for (in most cases) the three years
preceding the IPO. Generally, the prospectus
does not include forward-looking financials, andits content must be closely tied to the informationin the equity story.
In most jurisdictions, the prospectus is aliability document. That is, if information in
the prospectus proves incomplete or incorrect,
investors may claim damages. Therefore,
the prospectus must be prepared with great

diligence, a process that often requires
substantial time and close coordination among
numerous parties.
Financial figures in the prospectus must reflect
the company as if it had already existed three
years ago. The document also tends to beextensive—often exceeding 400 pages—andrequires input from many different parts of thecompany and external sources.
Companies should therefore start this process
very early in the IPO preparation phase.
BCG helps companies manage the big challenges
associated with developing the prospectus andother important IPO transaction documents toensure consistency and accuracy throughout. We
also apply a disciplined process for structuring
the prospectus—including identifying the rightpeople in the organization to provide the rightinformation, and compiling a single repository for
all data and information used in the prospectus
and other documents.

Successful transactions rest on three pillars

Clarity on
investor needs

Convincing
equity storySoundbusiness plan

Which groups of investors can
we attract?

Why would an investor buy
our share?

What does my business planoffer investors?

What do investors care about(e.g., dividend vs. growth)?

What is a compelling
rationale for investing?

Is the business planbullet-proof, from an
investor’s view?

Source: BCG Analysis

09 							SUCCESSFUL IPOs, SPIN-OFFS, AND DUAL TRACKSDECIDING ON CAPITAL STRUCTURE AND
DIVIDEND POLICY
While preparing the equity story and theprospectus, companies also have to makedecisions about IPO-Co’s capital structure anddividend policy. This is especially important forcompanies initiating an IPO for a subsidiary.
The originating company has to decide howmuch debt it wants to “push down” to IPO-Co.
This decision needs to strike the proper balanceamong growth, dividend payouts, and a balance
sheet/debt structure that matches the ratinglevel targeted for IPO-Co. Insights from theinvestor peer analysis help companies determine
investors’ expectations regarding debt levels andpayout ratios. A detailed peer analysis provides
further guidance on which rating and payout
levels will allow IPO-Co to successfully compete
for investors’ funds.
If the company plans to restructure the debt sidewith new instruments (such as a senior bond), it
should reserve sufficient time in the IPO schedule
to prepare and execute the debt strategy. Debt
issuance can create a substantial additional
workload (for instance, it requires a separatebond prospectus), wich will have to be performedin parallel with the IPO preparation. The content
of this extra work must be consistent with thestatements and data subsequently presented in
the equity story and IPO prospectus.

At this point, the company also needs to decide
what portion of its equity to offer and determine
whether to include new (“primary”) shares in the
IPO to collect fresh capital or to sell only existing(“secondary”) shares.
BCG helps companies define the right dividend
policy and capital structure. We build integrated
financial models based on the company’sbusiness plan to simulate the effects of different
payout and leverage levels on operating
performance and financial stability. We also
incorporate expectations from both debt andequity investors to identify which levels can leadto sustainable success in the market.
DEFINING THE OFFERING’S TECHNICALPARAMETERS
Before the IPO execution phase, the company
also has to make a number of key technicaldecisions regarding the offering, including
selecting global coordinators who will orchestrate
the listing and deciding on the listing venue andmarket segment.

BCG ADDS VALUE IN THESE WAYS:• Helping companies compile comprehensive, clear, compelling, and accurate transaction documents• Providing end-to-end support for the equity story by leveraging market insights and combining the story
with the reworked business plan for a strong and convincing package• Working with company leaders to help them make the right decisions about dividend policy, capital
structure, and the offering’s technical parameters

BOSTON CONSULTING GROUP

10

PHASE

3
ExecuteWILL YOU HIT THE TARGETED
IPO WINDOW?
In the home stretch of any IPO transaction, allefforts are aimed at hitting the targeted IPO
window. To reach that goal, companies haveto go through the tightly regulated approval
process for the prospectus with local authorities.
They must prepare the analyst presentation andconduct investor education efforts. And before
ringing the bell, management needs to hit theroad to persuade investors and analysts to invest
in IPO-Co.
GAINING APPROVAL
Gaining approval for the prospectus from theauthorities is a prerequisite for the IPO. Once thecompany obtains such approval, it can publish
the IPO prospectus, an important source of
information for investors. But companies should
not publish too early—if they do, they may haveto create a supplement to the prospectus if
significant new information becomes available
between the publication and the listing dates.
Also, financials in the prospectus can go stale.
In a prospectus used in connection with a Rule
144A tranche, financial statements (including
the company’s balance sheet) must be as of adate that’s within 135 days before closing of the
final allotment of the offered shares.
To gain approval, companies often file draftsof the prospectus with the regulator before thefinal application. This enables them to collectand incorporate feedback from the regulator on
the structure and content of the prospectus. But

to use this approach, companies must have thecore elements of the prospectus ready about
three months before the targeted approval date.
ENGAGING WITH INVESTORS ANDANALYSTS
During the last months before the IPO, thecompany also needs to closely engage withinvestors and analysts, drawing on the equity
story to prepare compelling materials to inform
these constituents. Top management presents
the equity story and financials for the first time toanalysts during a “capital market day.” Analysts
prepare their reports and valuation of thecompany largely on the basis of this information.
Once the first reports are published, management
engages with potential anchor investors to whettheir appetite for the IPO.
In the final week before pricing, top management
conducts an extensive roadshow that includes
stops in key financial centers to meet withbroader groups of investors.
BCG helps companies through the entire execution
phase, including compiling information for analyst
and investor meetings and incorporating feedback
from these meetings into the equity story. We also
help management prepare for these meetings as well
as for capital market day and the roadshow. If time
gets tight before critical deadlines, we switch fromorchestrating internal and external stakeholders
to closely managing the action—hour-by-hour, if
needed, to ensure that deadlines are met.

BCG ADDS VALUE IN THESE WAYS:• Coordinating all efforts required to gain the necessary approvals for the IPO prospectus• Preparing convincing materials for analyst presentations and roadshows• Coaching top management on how to conduct investor meetings and detailed Q&A sessions

BOSTON CONSULTING GROUP

12

Why BCG?

Drawing on our collaborative, rigorous approachto IPOs, spin-offs, and dual-track transactions,
BCG has facilitated many successful transactions
in a diverse array of industries and countries. We
support our clients by:
Setting up a dedicated transaction team:Through the BCG Transaction Center, we bringa strong team armed with specific skills andexperience to help clients manage the IPO, spinoff, or dual track.
Bringing renowned industry expertise to thetable: Regardless of the industry or market, webring the full depth of BCG’s expertise to thetable to shape the transaction strategy, businessplan, and equity story.
Taking a collaborative approach: We work
alongside clients every step of the way. We also
help them coordinate all participants—including
investment banks, accountants, and law firms—
from a strong project management office.

13 							Focusing on value and detail discipline: We
concentrate on the aspects of transactions thathave the most value at stake. We also deploy our
analytical power to ensure that no detail or risk
is ignored—so nothing can jeopardize successful
execution of the transaction.
Serving as a thought partner: We serve as asparring partner for addressing clients’ mostcomplex and daunting issues. No matter what
the question is, we work closely with clients tofind the right answers—and we aren’t afraid tochallenge them to get there.
We apply our support philosophy and ourdisciplined approach throughout every phase of
the transaction process—from conceptualizing
to preparing to executing.

SUCCESSFUL IPOs, SPIN-OFFS, AND DUAL TRACKSReal Deals, Real Results:
BCG helps thyssenkrupp
Manage a Successful Trade
Sale of Its Elevator Division

thyssenkrupp AG (tk AG)—the German multinational
conglomerate focusing on industrial engineering,
automotive, material services, and steel production—
had faced several challenges, including falling demandfor European steel and an economic slowdown
in Germany. As part of a broader transformation
effort, the company considered divesting its elevator
division, thyssenkrupp Elevator Technology (tk ET).
The goal? To infuse cash into the company that could
then be used to transform the remaining divisions.
tk AG prepared for an IPO while also remaining
open to the possibility of a trade sale, which
triggered the interest of multiple private equity
firms and strategic bidders.
The company’s advisory team included BCG in
addition to Goldman Sachs, Deutsche Bank, J.P.
Morgan, and Linklaters. BCG’s role centered on
supporting tk AG and tk ET along the dual-track
IPO and M&A process and then the eventual
carve-out and divestment execution.
Working jointly with investment banks, we
supported the preparation of key selling
documents, such as information memoranda,
management presentation, and the equity story.
As part of our vendor due diligence work, we

BOSTON CONSULTING GROUP

conducted a comprehensive assessment of tk
ET’s market and business plan. Additionally, we
led sessions in which commercial experts andmanagement answered questions from financial
and strategic bidders about the potential forsustainable value generation from tk ET. We also
supported the drafting of the IPO prospectus
and reviewed it for submission to financial
authorities.
After months of negotiations with prospective
buyers, tk AG decided to sell tk ET to private
equity firms Advent International and Cinven.
The two firms are part of a consortium that
includes the Abu Dhabi Investment Authority
and Germany’s RAG Foundation, the top
shareholder of German chemicals group Evonik.
The comprehensive support that BCG provided
contributed to the successful closing of thetransaction in July 2020. Weighing in at a valueof $18.9 billion, the deal constituted the biggest
private equity transaction in Europe since 2007.

14

Five Tips for Effectively
Managing an IPO

01

02

03

Prepare diligently:

Have strong “proof
points”:

Have a “plan B” tomanage execution risk:

Most firms contemplating an
IPO claim that their businessis unique. But is it really?
Investors and analysts will
rigorously challenge yourclaims and translate theminto financial projections.
The better proof points acompany has, the higher its
valuation.

Capital markets are volatile,and windows of opportunity
can close quickly. Many
successful IPOs aredesigned with a range ofalternative pathways—suchas a trade sale (dual track)
or a spin-off option (triple
track)—to serve as a backup
plan in case something goes
wrong during execution of
the IPO.

Successful IPO journeys take12 to 18 months, sometimes
even longer. By preparing
every component carefully(including the businessplan, equity story, andprospectus) and building acapital-market-ready team,companies can improve theodds that the stock market
will apply a high valuation tothe offering.

04

05

Prepare for life in the
public space:

Don’t overlook carveout complexity:

After an IPO, life for acompany’s CEO and CFO
changes radically, as
investors and analysts
keep an eagle eye on
the business’s financial
performance andmanagement practices. The
best way to adapt to such
public scrutiny is to designand execute a rigorous
strategic and business planand to establish a strong
investor relations andcommunications team. Thatway, investors and analysts
always know about thecompany’s successes.

Orchestrating a carve-out
is not the most glamorouspart of the IPO process. It
presents some complexities,
and companies that
underestimate thesechallenges may botch theprocess, putting the entire
IPO timeline at risk.

15 							SUCCESSFUL IPOs, SPIN-OFFS, AND DUAL TRACKSDeals That We’ve
Helped Happen
2021
2021

2021

Selling their metalbusiness toStrategic advisor
to the seller

Strategic advisor
on IPO

$3.5B

$250M

2020

2020

2020

Selling their airline
catering subsidiary toselling theirelevator business toStrategic advisor
to the seller

Strategic advisor
to the seller

Value not disclosed€17.2B

2019
2019

Strategic advisor on IPO

BOSTON CONSULTING GROUP

2019

2019

2019

selling 51% of theirbusiness toselling their European
onshore service business toselling their footcare brand toStrategic advisor
to the seller

Strategic advisor
to the seller

Strategic advisor
to the seller$1.45B

€200M

$585M

16

2019
2019

2019

2019

2019

selling their animal
health business toselling their sun screen
brand toStrategic advisor
to the seller

Strategic advisor
to the seller

Strategic advisor
to the seller

Strategic advisor
to the seller

$7.6B

$550M

Value not disclosed

Value not disclosed

2019

2019

2019

selling their 50% stakein DFE Pharma todivesting their drinks andhospitality business

Strategic advisor
to the seller

Strategic advisor
to the seller

Support forcapital increase

NZ$633M

AUS$10B

€3.6B

2018

2018

sold a minority stake in its
solar energy subsidiaryselling their Consumer
Health (OTC) business toStrategic advisor
to the seller

Strategic advisor
to the seller

Comprehensive support
for carve-out/carve-inof energy businesses

$174M

€3.4B

Value not disclosed

2018

2018

2018

2018

selling their European
generics business Zentiva todivesting their drinks
business toStrategic advisor
to the seller

Strategic advisor
to the seller

Strategic advisor
to the seller

Strategic advisor
to the seller

€1.9B

€4.6B

Value not disclosed

Value not disclosed

2018

2018

2018
2018

Strategic advisor on IPO

Strategic advisor
to the seller$3.15B2018

divesting their heat pumpbusiness (Thermia) toProvided support on
asset identification anddesign of tender program
for the state-owned
railway business

Value not disclosed

17 							SUCCESSFUL IPOs, SPIN-OFFS, AND DUAL TRACKS

2017
2017

2017

2017

2017

selling its S&IP
business todivesting their oil& gas business

Strategic advisor
to the seller

Strategic advisor
to the seller

Strategic advisor
to the seller

Strategic advisor
to the seller€8.0B€21.8B

$7.5B

$7.5B

2017

2017

2017

2017

Sale of restaurants
in the Nordics

Provided support
on privatization
program as partof government
2030 strategy

Developed andimplemented aprivatization program
for the sovereign
wealth fund

Value not disclosed

Value not disclosed

$1.9B

2016

2016

2016

2016

Operational carve-outof generics business

Strategic advisor in spin-off
of fossil fuel assets

Strategic advisor
to the seller

Strategic advisor in spin-off
of cars.com from Tegna$38.7B

$4.5B

$3.0B

$2B

2016

2016

2016

2016

Strategic advisor in IPO

Developed equity story
and business planfor the IPO

Prospectus preparation
and analyst presentation
for IPO

Operational carve-out in
preparation for divestment

Strategic advisor
to the seller

Value not disclosed

Strategic advisor
to the seller

2016

$534M

2016

2016

Strategic advisor
to the seller

Strategic advisor
to the seller$310M

Value not disclosed

BOSTON CONSULTING GROUP

18

Meet Our Team
BCG’s experts represent a rich and diverse group whose
experience comes from solving the key issues faced bycompanies around the world. For every focus area, we also have
local experts who provide pivotal insights into the dynamics ofindividual markets.

Jeff Gell
Managing Director and Senior Partner
Jeff Gell is a Managing Director and Senior Partner based in BCG’s Chicago office. He isa core member of BCG’s Consumer, Operations, and Corporate Finance & Strategy practices and leads the Transaction and Integration Excellence business globally.

Chris Barrett
Managing Director and Partner
Chris Barrett is a Managing Director and Partner based in BCG’s Dallas office. He joined
BCG in 2001, and he has worked on Post-Merger Integrations across many industries, geographies, and topics. Chris has also worked in our Los Angeles and Amsterdam offices.

Dr. Jens KengelbachManaging Director and Senior Partner
Dr. Jens Kengelbach is a Managing Director and Senior Partner based in BCG’s Munich
office. He is the Global Head of M&A and the Leader of the BCG Transaction Center.

BOSTON CONSULTING GROUP

20

BCG’s Corporate Development Practice Encompasses:

More than 150 partners and
700 trained professionals
across all seniorities, each withsignificant experience in corporate
development and corporate
finance.

Teams that always combine
the specialist’s expertise with
our proven industry expertise,bringing strategic know-how to allindustries and geographies.

A “solution first” mindset to help
means we help to constructively
manage the dealmaking process atthe strategic “macro” level as well
as at the levels of detail required.

A collaborative approach frombeginning to end, continuallyworking with the client’s own
experts and management teams
and with key stakeholders such as
i-banks and outside legal counsel.

Daniel Friedman
Managing Director and Senior Partner
Daniel Friedman is a Managing Director and Senior Partner based in BCG’s Los Angeles
office. He is the Los Angeles Office Leader and the Leader of the Transaction and Integration Excellence Business in North America.

Jesper Nielsen
Managing Director and Senior Partner
Jesper Nielsen is a Managing Director and Senior Partner based in BCG’s London office.
He is currently the Regional Leader of our Transaction and Integration Excellence business in Western Europe and South Africa.

21 							SUCCESSFUL IPOs, SPIN-OFFS, AND DUAL TRACKSTeemu Ruska
Managing Director and Senior Partner
Teemu Ruska is a Managing Director and Senior Partner based in BCG’s Helsinki office.
He is the Regional Leader of our Transaction and Integration Excellence business in Central and Northern Europe and Middle East.

Timo SchmidManaging Director and Partner
Timo Schmid is Managing Director and Partner based in BCG’s Melbourne office. He isa core member of the Corporate Development and Principal Investors and Private Equity
practice areas and the BCG Transaction Center.

André KronimusManaging Director and Senior Partner
André Kronimus is a Managing Director and Senior Partner based in BCG’s Frankfurt
office. He is the global Topic Leader for Corporate Finance & Strategy and a core memberof the BCG Transaction Center and the European Corporate Finance Task Force.

Uwe BerberichManaging Director and Partner
Uwe Berberich is a Managing Director and Partner based in BCG’s Düsseldorf office. He
is a core member of the Corporate Development and Industrial Goods practice area aswell as the Corporate Finance Task Force.

Ketil Gjerstad
Managing Director and Senior Partner
Ketil Gjerstad is a Managing Director and Senior Partner based in BCG’s Oslo office. He
is the Regional Leader of BCG’s Corporate Finance & Strategy practice in Central andEastern Europe and Middle East. Ketil is also a core group member of the BCG Transaction Center.

BOSTON CONSULTING GROUP

22

Philipp Jostarndt
Managing Director and Partner
Philipp Jostarndt is a Managing Director and Partner in BCG's Munich office, which hejoined in 2007. He is a core member of the worldwide Industrial Goods and Corporate
Development practices and a core member of the Metals and Mining sector.

Andreas Kyrilis
Managing Director and Partner
Andreas Kyrilis is Managing Director and Partner based in BCG’s Dubai office. He is theglobal IPO and Spin-off Topic Leader.

Decker Walker
Managing Director and Partner
Decker Walker is a Managing Director and Partner based in BCG’s Chicago office. He isa core member of the Industrial Goods and Corporate Finance & Strategy practices withparticular focus on Agribusiness and M&A topics. He is also a core group member of the
BCG Transaction Center.

23 							SUCCESSFUL IPOs, SPIN-OFFS, AND DUAL TRACKSRead All About It
Our clients operate in nearly every industry and region aroundthe world, and they come to us for fresh approaches to theissues that matter most to them. Through a rigorous analysis
of each client’s individual situation, we develop customized
solutions that meet the organization’s specific needs. The caseexamples here illustrate how we help clients sharpen theircapabilities, create value, and deliver sustainable advantage.

Transaction and Integration
Excellence Product Series

Sell-Side Success
How BCG Supports Divestitures

Sell-Side Success
How BCG Supports
Divestitures

Successful Due Diligence
How BCG Supports Strategic Due Diligence

Successful Due Diligence
How BCG Supports Strategic
Due Diligence

Successful Business Separations

Successful Target Search

How BCG Supports Carve-Outs

How BCG Helps Find Strong M&A Candidates

Successful BusinessSeparations
How BCG Supports
Carve-Outs

BOSTON CONSULTING GROUP

Successful Target Search
How BCG Helps Find Strong
M&A Candidates

24

Successful Merger Integration
How BCG Helps Maximize the Value from a Deal

Successful Merger
Integration
How BCG Helps
Maximize the Valuefrom a Deal

The Clean Team Advantage
How BCG Enhances M&A Success

The Clean Team
Advantage
How BCG Enhances
M&A Success

Successful Merger Clearance
How BCG Helps Clear the Path for Acquisitions

Successful Merger
Clearance
How BCG Helps Clear
the Path for Acquisitions

The 2020 M&A Report
Alternative Deals
Gain Traction

25 							SUCCESSFUL IPOs, SPIN-OFFS, AND DUAL TRACKSBCG’s Transaction Center is the hub of the firm’s global M&A expertiseand provides businesses with end-to-end transaction support, including
strategic decision-making in mergers and acquisitions, preparing andexecuting divestitures, and supporting IPOs and spin-offs. The Transaction
Center combines BCG’s deep sector expertise with our comprehensive
knowledge of, and experience in, all aspects of M&A across all sectors
and industries. These services complement the process-focused offeringsof investment banks. With more than 300 professionals worldwide, weconcentrate on the commercial drivers of the business plan and equity
story. We help both corporate and private equity clients execute deals
efficiently and, more importantly, maximize value.

Contact:
Dr. Jens Kengelbach
Global Head of M&A
Managing Director and Senior Partner, Munich
Tel. +49 89 2317 4312
kengelbach.jens@bcg.com
https://connect.bcg.com/transactioncenter

BOSTON CONSULTING GROUP

26

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture
their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we help clients withtotal transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and drivingbottom-line impact. To succeed, organizations must blend digital and human capabilities. Our diverse, global teams bring deepindustry and functional expertise and a range of perspectives to spark change. BCG delivers solutions through leading-edge
management consulting along with technology and design, corporate and digital ventures—and business purpose. We work in auniquely collaborative model across the firm and throughout all levels of the client organization, generating results that allow ourclients to thrive.
© 2021 Boston Consulting Group. All rights reserved. 09/21
For information or permission to reprint, please contact BCG at permissions@bcg.com. To find the latest BCG content andregister to receive E-alerts on this topic or others, please visit bcg.com. Follow Boston Consulting Group on Facebook and Twitter.

27 							SUCCESSFUL IPOs, SPIN-OFFS, AND DUAL TRACKS