5 Pointers on Launching a Successful IPO Strategy

5-pointers-successful-IPO-strategyThe IPO that didn’t happen
But on the morning of November 20, when CEO Bill Reminder was supposed to be ringing the NYSE’s opening bell, instead he “postponed” the IPO amid a shaky market environment and a discomfiting appetite for its stock.

Indeed, in holding off on an IPO for now, Reminder is like dozens of mid-market chiefs of growing companies that continue to experience cold feet about going to the public equity markets, even though those markets have been trading at record levels lately.

“I still think an IPO is in our future,” Reminder told Chief Executive. “I can’t guarantee that, but I like to have that choice. As markets continue to stabilize, we will make sure we’re in a position to do a public offering, but right now we’re just focused on running the business. “Being publicly traded would reduce our debt and give me another currency to go out there and do acquisitions,” he said. “It would be good for us and also good for the investment community.”

“Start a year in advance of a planned IPO date so people know you and your story.”

Staying focused on growth
In the meantime, Reminder is running quite a company. Since he founded it in 2007, Truck Hero has managed to grow and consolidate several brands in the pickup-accessory business at a time when U.S. truck sales have been absolutely booming, and when owners—both business and “lifestyle” buyers—seem to be accessorizing their rides more than ever before.

Another attractive feature is that Truck Hero products are all made in America, where the company employs 1,900 people. “Consumers aren’t making purchase decision on that,” Reminder allowed, “but it does reaffirm their purchase.”

Overall, Reminder said, Truck Hero has a robust 60% share of the markets in which its products participate, selling through 14,000 independent retailers. That has added up to five-year organic compound annual growth in sales of more than 17% and, last year, $520 million in revenues.

Tips for other CEOs
To date, Reminder hasn’t rescheduled an IPO. But if you find yourself in a similarly questionable position, he has some advice to help you decide whether to move forward, stay in a holding pattern or pull the plug.  Here are his 5 pointers for other mid-market CEOs considering an IPO.

1. Hire the best advisors. “Surround yourself with good advisors—bankers, attorneys, and others in the business,” Reminder said.

2. Use multiple sources. “Have more than one advisory team, that you talk to all of them, and that you get their advice one on one,” he said. “The more smart people you talk with, the better a decision you can make.”

3. Keep your promises. Truck Hero’s growth has continued to validate the proposition behind its IPO plans, and that is crucial. “Do what you say you’re going to do,” he said. “Don’t over-promise and under-deliver, or sandbag and way over-deliver. Be forthright about the performance of the business, and make sure your success is real, genuine, and sustainable.” Ultimately, he says, that will resonate with investors.

4. Start a year out. Perform “as much advance public relations and investor relations as you can,” Reminder advises. “Start a year in advance [of a planned IPO date] so people know you and your story. You’ve got to do that education with the investment community.”

Despite, Truck Hero’s IPO withdrawal, they continue to have good analyst support due to an impressive business record. “Investors got the story the first time—but they understand it better the now.”

Looking back at the last 12 months, Reminder says that nothing can set up an IPO better than beating projections. “We just focus on running the business right now,” Reminder said. “And we’re doing everything that we said in the road show that we were going to do.”

 

 

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