TT273: You have a successful company – Is flotation a viable exit route for you?

July 18, 2018

In past Topical Tips, we have discussed the possibilities of preparing your business for sale or the potential for structuring a Management Buy-Out.

Following a recent successful flotation by one of our client onto the Alternative Investment market (“AIM”) we can report on the process and explain how your company might also consider this route.

Egg Free Cake Box

Our client, Cake Box Holdings Plc (referred to as “Egg Free Cake Box”), has recently listed on AIM with the first day of share dealing being 27 June 2018.


The company was formed by Sukh Chamdal and Pardip Dass in 2008, inspired by the fact that many of the founders’ family members follow a lacto-vegetarian diet, plus the perceived need in the market for products for consumers with egg allergies or religious requirements. To date the company has 91 branded franchise stores and in the year to March 2018 added new stores at an average of 2 per month. It is the directors’ stated view that they will grow the business to 250 stores. What’s more, the team at Barnes Roffe can confirm the cakes are delicious!

The deal

The directors appointed Barnes Roffe LLP as tax advisors and auditors five years ago. In late 2017 the directors appointed Shore Capital as NOMAD (Nominated Advisers) and Broker to assist with the flotation, CRSB Law as Reporting Lawyers and RSM UK as Reporting Accountants for the flotation.

The outcome

The client successfully floated 49% of their shares on AIM at £1.08 per share. The founders took the opportunity to release some of their value and staff and franchisees also benefited from the sale of their shares. This valued the business at £43.2 million.

The process

There are several key steps to follow in a flotation process:

  • Investor presentation (prospectus) – assisted by the Broker you will prepare and present your proposition to your Broker’ and NOMAD’s sales teams to ensure the Company is ready and credible and has potential for a successful roadshow to potential investors. This presentation is verified by the Reporting Lawyer.
  • Legal due diligence – your lawyer will undertake due diligence and issue a report to the NOMAD.
  • Long form report – this is produced by the Reporting Accountant for the NOMAD
  • Working capital report and sensitivity analysis – this is produced by the Reporting Accountant for the NOMAD. Barnes Roffe can prepare the budgets/forecasts for distribution to the Reporting Accountant and then perform sensitivity analysis as required. It is a forecast and cashflow model for the business.
  • AIM Admission Document – this is prepared by the Broker and verified by the Reporting Lawyer and by the NOMAD’s independent lawyer.
  • Your appointed Marketing Consultants will develop an investor website, plus publicity and communication material.
  • The Broker will arrange a roadshow to present to potential institutional investors who will indicate their interest a week later, stating the price per share and number of shares they wish to take up. If an offer is oversubscribed then the directors can pick the investors who they wish to work with.
  • Initial Public Offering day – the company is floated on AIM!

Our team and involvement

Our team supporting Egg Free Cake Box were Layla Martin (Tax Partner), Stuart Moon (Audit Partner), Jamie Henderson (Audit Manager) and Parminder Gharial (Tax Manager).

In the preparation for sale our team were involved in advice covering many areas, including tax planning, group structure matters, share options, accounting policy review, audit of the three years accounts preceding listing and translation of the accounts from UK Generally Accepted Accounting Policies to International Financial Reporting Standards.

We congratulate the staff, directors and shareholders at Egg Free Cake Box on their hard work and achievements and wish them continued success in the future.

If you would like to discuss preparing your business for a sale or whether a floatation could be right for you please do not hesitate to contact your Barnes Roffe Partner.


Relevant links

Egg Free Cake Box

Investor website

Financial Times article

London Stock Exchange announcement



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