There is no price list on IPO. Total expenses vary from one company to another and depend on multiple variables. It's also hard to rely on market data, because only a portion of the costs incurred as part of the IPO are disclosed publicly. However, a thorough understanding of such costs can help better estimate the total outlay. PWC identifies several types of IPO costs not only for going public, but also for being public.
COSTS OF GOING PUBLIC
Directly attributable to the offering (netted against proceeds):
• Underwriter discount, which based on public registration statements, result in fees equal to
5%-7% of gross proceeds.
• Legal, accounting and printing fees associated with drafting the registration statement and comfort letter.
• Road show expenses.
• In addition to underwriter fees, on average companies incur $3.7 million of costs directly attributable to their IPO.
Other incremental organizational costs (expensed as incurred):
• Tax and legal entity restructuring costs in anticipation of the IPO.
• Additional audit, interim/quarterly review costs, advisory accounting and other costs to make the financial statements S-X compliant.
• Valuation reports.
• Costs to draft new articles of incorporation, audit committee charter, by-laws, and other agreements.
• Based on our survey results, on average companies incur more than $1 million of one-time costs as a result of going public.
COST OF BEING PUBLIC
One-time costs to convert the organization to a public company (expensed as incurred):
• Costs to implement new financial reporting systems and processes.
• Initial costs to document internal controls and comply with SOX.
• Costs to identify and recruit a new board of directors.
• Costs to implement new executive and employee compensation plans.
• Typically, we estimate companies incur more than $1 million of one-time costs to convert their organization to a public company.
Recurring incremental costs of being a public company (expensed as incurred):
• Incremental internal staffing costs (accounting, tax, legal, human resources, technology, internal audit, and investor relations).
• Professional fees for legal and accounting advice.
• Based on our survey results, on average companies incur $1.5 million of recurring costs as a result of being public.
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