How going public helped: Learn why listing on public markets suited Fever-Tree’s growth aims more than other forms of finance.
Fever-Tree’s success attracted plenty of Private Equity suitors but, convinced by the long-term potential of the brand and not looking for a quick sale, decided not to take them up on their offer, preferring to float on AIM instead. Here’s why.
Fever-Tree business fact-file
|Sector||Food (Soft drinks)|
|Type of funding||IPO|
Fever-Tree's journey to finance
- Fever-Tree is a premium tonic water that was created in 2003. At the time Tim Warrillow, CEO and founder, approached Charles Rolls, an experienced head in the world of gin, and he put early seed finance into the product alongside other investment.
- It moved from seed funding to Private Equity fairly quickly after tasting success among hotels, restaurants and retailers, but after five years the investors wanted a return - Fever-Tree thought they were mad and were getting out too early.
- In 2012 Fever-Tree went though another round of Private Equity and were flattered to receive so much interest but it lengthened and complicated the process.
- Realising the opportunity out there and the long-term potential of Fever-Tree it was clear it was more suited to floating than Private Equity which feeds off exponential rather than steady growth.
- Fever-Tree's experience with Private Equity funding rounds put it in a good position for an IPO because of all the due diligence involved and by spring 2014, it was ready to float.
- The whole process took four months and cost less than a previous Private Equity deal. It appealed to Fever-Tree because financial reporting takes place twice a year on AIM, which for us as a company with a relatively low headcount is important. It also boosts profile at home and internationally.
- Fever-Tree successfully listed for £154m.
Fever-Tree's Top Tips
Only consider this if you have a really good finance director and a well organised finance department.
Listing allowed us to fulfil our business' potential in the long term.
The best bits about an IPO
- Our equity house allowed us to run the process.
- Most of the float was made up of the Private Equity house selling their shares.
- An IPO allowed us to fulfil our long-term aims and the Private Equity firm to realise some of their investment.