Why AIM?

Rationale for AIM

There are many reasons why U.S. companies decide to complete their IPOs on the Alternative Investment Market (AIM) of the London Stock Exchange (LSE), some of which are unique to London's AIM and some of which are not.

  1. Raise cash to fund existing operations through to profitability
  2. Raise cash to fund organic growth and/or acquisitions
  3. Raise cash to fund international growth, preferably UK/EU
  1. Create a liquid currency in London AIM-listed shares for acquisitions
  2. Diversify the shareholder base across many large institutional investors with deep pockets
  3. Exit, partial or otherwise, of existing shareholders
  4. Recapitalize the balance sheet by swapping debt for London AIM-listed equity
  5. Establish a market value for the company on AIM if the longer term strategy is to be acquired
  6. Prepare the company for a dual or primary listing on NASDAQ
  1. Regulation on London's AIM is appropriate for the company’s size and stage of development
  2. Attract an appropriate shareholder base and equity research following
  3. Bolster confidence with current and prospective business partners
  4. Attract, retain and incentivize employees and the board with AIM-listed shares and options
In the current banking environment, opportunistic companies may access London AIM-listed equity financing to:
  1. Continue with their organic and/or acquisitive growth plans
  2. Swap debt for London AIM-listed equity to deleverage; reducing risk and interest expense
  3. Use their new London AIM-listed shares to affect acquisitions of weak competitors that have:
    1. Valuable IP
    2. Rich customer lists
    3. High quality employees

Assembling an appropriate team of professional advisers in London and the U.S. is crucial to achieving a successful listing on London's AIM.  While some professional advisers are generic in nature, others, such as a company’s AIM Nominated Adviser and AIM Nominated Broker, are not.  They often focus on companies in particular industries (sectors) as well as companies of a certain size in terms of market capitalization.  Unfortunately, 50% of the 47 London AIM listed companies operating in the U.S. have changed their Nominated Adviser and/or Nominated Broker on one or more occasions.  Sometimes this is the natural evolution of things where a company outgrows its Nominated Adviser and/or Nominated Broker, or vice versa, and sometimes this is because a company did not fully consider the alternatives at the time of their AIM IPO or in the aftermarket and made a poor choice.