_8867.jpg)
Leading dealmakers and IPO teams are finally – and effectively – addressing the number one cause of post-transaction challenges: unpreparedness. True deal readiness now means pre-IPO companies are operating like public entities across a variety of markers and corresponding to their individual circumstances.
For Shari Mager, US National Capital Markets Readiness Leader and KPMG Private National Advisory Partner at KPMG LLP, this shift is increasingly visible in investor conversations. Companies that establish strong controls around data, processes, and people often enter transactions with greater credibility, and that preparedness can help build investor confidence.
Sal Melilli, Managing Partner of KPMG's New York City Office, sees a similar trend. Today's environment has given many companies more opportunity to strengthen their operating foundations before pursuing an IPO or other major transaction, creating a greater focus on preparation well in advance of execution.
“The companies that prioritize readiness early and embed a control environment around their data, processes, and people are the ones who enhance their own credibility,” says Shari Mager, “And that readiness is translating into investor confidence, which paves the way for IPO or major deal success.”
Sal Melilli agrees. “The current environment has allowed leaders to take advantage of a unique time frame,” he says. “Today’s liquidity accumulation has reduced pressure, and with that, companies are owning their operational readiness like never before.”
Today’s major deal environment creates more transaction-ready companies
Headlines within the IPO and capital markets boldly defy today’s geopolitical and macroeconomic news trends. “Dealmakers now acknowledge and accept a sort of enduring volatility,” Mager says. “Major M&A deals and IPOs are very important to the ecosystem, so leaders are maneuvering through the volatility to start clearing the backlog.”
As US deal sizes, volumes, values, and velocities continue to break records, Melilli says that successful post-deal outcomes have one commonality: deal readiness. “Success is more likely today for companies who can dictate deal timing rather than waiting for the proverbial windows to open and close,” he says. “And deal readiness alone makes that possible.”
Markers of major deal readiness, and how institutional investors view them
According to Mager, deal readiness is a mindset, not an event-based diligence exercise. “One big impediment is when a company treats readiness as IPO or exit event transaction work, and not as an ongoing business imperative,” she says. “Maturity is when a strong control environment can be sustained on a go-forward basis.”
Melilli says that evolution is one of the most notable shifts in today's market.
"Historically, readiness was something companies rushed toward in the final stretch before an IPO," says Melilli. "Today, we're seeing more leaders make readiness part of how they run the business. The result is an organization that's often better positioned for growth, scrutiny, and strategic opportunities."
Specific markers vary by region, product, industry, and growth stage, but generally, major deal-ready companies can…
- Show a history of consistently on-time, accurate financial reports.
- Provide proof that previous forecasts were modeled accurately
- Maintain a leadership tone that prioritizes corporate governance and champions internal controls beyond compliance.
- Demonstrate resilience through previous economic turbulence with provable strategies (like diversified revenue streams, responsible growth, and contingency plans).
- Manage systems of record to access complete, accurate, and clear data for investor updates – both scheduled and spontaneous.
- Articulate the corporation’s go-forward story, and what fresh capital will do for growth and continued maturation.
No pre-deal company achieves the gold standard of all of the above markers. Instead, successful deals involve leaders who prioritize achievable standards that make sense for their own sectors, investor profiles, and deal types.
“There’s a spectrum of operational readiness,” Melilli says. “Investors increasingly expect management teams to operate like public companies before they become public companies. We're seeing organizations pressure-test reporting processes, strengthen controls, and prepare executives for investor scrutiny much earlier in their journey.” Melilli adds that the closer a company gets to their planned event, the more beneficial these exercises become.
The results: How readiness markers predict outcomes
Mager says the benefits of readiness manifest in a variety of ways beyond stock prices or market confidence.
Time to mediate
Preparedness creates the luxury of time. “The most important reason for starting early is runway,” Mager explains. “Companies who identify gaps months in advance can proactively address them, rather than being under the pressure of a live transaction.”
Optionality
The slower pace of finding and fixing issues allows leaders to model, consider, and even pressure-test multiple solutions, ultimately electing the most favorable ones.
"One of the biggest signs of readiness is having the confidence to wait," says Melilli. "Companies that have done the work can take a more deliberate approach, with a clearer understanding of their risks, opportunities, and what success requires."
Reputation
Major deal readiness provides cover for companies navigating maturation, a luxury not afforded rushed or reactive deal teams. Regulator and investor confidence remains intact as executives lead the narrative – on their terms.
Lower costs
Leaders who address problems early, in an unrushed and unpublicized way, can involve their whole team – current executives, department heads, managers, and team members – instead of relying entirely on third party advisors.
Stronger leadership teams
Having weathered storms pre-IPO, deal-ready leaders now face future turbulence with real life lessons learned.
Leaders can assess their readiness today
Proactive business leaders understand that evaluating organizational readiness is a critical, ongoing discipline, not just a preparatory step for a major transaction like an IPO. Regularly assessing key operational benchmarks, such as a company's scalability and resilience, provides crucial insights for strategic planning. This process helps leadership teams identify potential vulnerabilities and confirm that the organization's infrastructure can support its long-term growth ambitions. To learn more, contact the KPMG Private team today.
Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.
