12/09/2013
At the second Session of the forum for family businesses shifting to contribution
'Family ' to a ' contribution ' means to increase added value and maximize return
In the second session entitled ' how to shift from family business to public companies ' said Russell Taylor (Price Water Coopers Housefirm) the challenges facing family businesses in the process of transition to stock companies, including financial matters, as well as the acquisition and merger, pointing out the need to have a family business causes a logical transition to shareholding companies. The basic requirements for the transformation was to meet the requirements of the capital market for trading and a managing for shareholder funds, as well as the complete independence of the Governing Council, stressing that the subscription process is not an end but a means to other ends.
Taylor said that investors expect financial returns from investing in the shares of the family business after putting them to subscribe, requiring greater transparency and focus on corporate governance, as well as a mechanism for financial record cleaner which means disclosure of sources and corporate financial resources after being put to the public, adding that challenges facing family businesses is the lack of independence of Board-level, public companies differ from the family business, as well as disclosure, transparency and financial control. Taylor called a culture of transformation to public companies, stressing the need to prepare a new release process, so at least the preparations for two years.
In the second paper, entitled (business valuation), Chairman of the investment banking group (Falcom financial services) Moaz Al-Khasawneh that evaluation is the process of investigation and analysis to determine the economic value of the company, which is in the family business by the book value, or book value, or the market value of the assets of the company, or alternative value.Pointing out that during the assessment process should take into account the company owners and investors. He said that the factors contributing to the increased value of the company, including external factors cannot fully control but must be monitored, and the accounting system of the company management, and sales growth and improved profit margins and capital structure in a manner appropriate to the needs of the company.
Speaking at the same meeting, Senior Vice President and Director of corporate investment banking Riyad Mohammed Sharif (Pre IPO preparations), which produces up to provide sufficient time for the company to modify and improve their work, and reduce the cost of consultants, to prepare the company for listing on the stock market, and to take appropriate advice from a financial adviser. Al Sheriff reviewed some of the challenges facing family businesses, both with regard to ownership in the company, or management or internal and external competition, as well as funding. Noting the need for transformation into joint stock companies, to ensure the continued survival of the company and increase organizational efficiency, and give them the ability to expand and ease access to funding sources, and so on.
Also he turned to the initial considerations, notably the involvement of strategic investors, the reorganization and restructuring of assets and business of the company, and the application of corporate governance and capital market authority regulations concerning the publication of the financial statements, and building a strong management. For his part, in a working paper entitled (The Road to a successful IPO), Chairman of the private equity and investment banking firm Jadwa investment Tariq Al-Sudairy said of the successful IPO is a financial return (Shares Valueupon subscription and after), and trade impact (structuring the subscription process to meet the current needs of the company, and can at the same time enhance growth opportunities in the future), and the reputation of the company and its owners (through the positive impact of the underwriting company and owners can continue their development without negative effect may result from public offering). He stressed the importance of setting before initial subscription (set in early to avoid doing the work twice, and set up an integrated and compelling investment story of the investor, the subscription structure in line with the business model and operating company).
