Client: Veem Limited (ASX: VEE), a world leader in the manufacture of bespoke marine propellers and assemblage for luxury and commercial marine craft.

Challenge: The company’s Board wanted to list the company and wanted to ensure it was IPO-ready

Outcome: Veem successfully listed on the ASX

The brief

When Perth-based marine technology company Veem Limited (ASX: VEE) decided to IPO it was with a view to provide a financial structure to capitalise on the growth opportunities that new product developments were creating. It was also an opportunity to provide a mechanism to manage succession planning.

The Company has a strong track record of performance, having delivered stable and consistent earnings over many years, building its reputation for quality, efficiency and ability to deliver innovative products globally.

VEEM’s patented gyrostabilisers have been developed over the past five years and eliminate most of the rolling motion of vessels at anchor, drifting, alongside or transiting. These products are now selling into the global marine market and are expected to generate significant sales growth for the Company in the future, displacing cumbersome and less effective stabilisation fins currently in use.

Mark Miocevich, managing director of Veem said: “The board had always considered that becoming a public company, or part of a public company, was a desirable direction, and we did not see any major downsides in pursuing an IPO.

“The cost of the IPO, and the additional board discipline required as a listed entity, were seen as reasonable tradeoffs for the potential benefits that an IPO offered. The IPO process ran smoothly and the key to this success was ensuring the company was IPO ready before the process began,” Mr Miocevich said.

This was demonstrated by having:

  • Many years of audited profitable performance.
  • A potentially high growth future product portfolio.
  • A highly structured, high compliance business profile.
  • A well developed business plan.

“Making the company IPO ready takes many years of product and system development. My advice for those considering an IPO in the future is to make your company think and act like a public company as early as you can. The transition is then smaller to make and will ultimately be more successful.”

He also offers advice on the importance of managing expectations.

“The IPO process time frame was longer than predicted by approximately three months. There were valid reasons for the delay, so my advice to others would be to allow a little longer than is initially thought.

“Because we used the best subcontractors to assist in the management of the IPO process, only realistic expectations were created from the beginning.

“Following the IPO, the overall process could be evaluated against those realistic expectations, and it was considered to be very successful from the board’s perspective.”

Not surprisingly, there was increased workload for the board and senior management during the IPO process. Mr Miocevich’s advice on how to manage this includes:

  1. Having a comprehensive company budgeting model and easily accessible historical financials.
  2. Having a comprehensive business plan including company history.
  3. Engaging a financial consultant whose responsibility it is to prepare the company’s financial modeling for the IPO.

“This is a substantial amount of work in itself and would have placed an unreasonable burden on the board and staff had it not occurred,” he said.

The result

Since listing on the ASX there has been a definite upside impact on the business.

“There is an increased need for public relations to provide the higher public profile required for a public company, which is a positive for all of the company’s stakeholders.

“There has also been an increased focus by senior management, and the board, on meeting all forecasts. This dedication to meeting targets can only have a positive impact on the business.”

Mr Miocevich offers a final piece of advice for those looking to undertake an IPO.

“Perhaps the most significant consideration is to choose the right adviser. One of the most important factors which contributed to a successful IPO for the company was finding the best consultants to guide the company through the process. Without the efforts of Danny Buckley and his team at HLB Mann Judd, we may have been looking at a very different outcome.”