IPO – The Birth of a Listed Company

IPO – The Birth of a Listed Company

SoftwareONE, based in Central Switzerland, went public on the Swiss Stock Exchange in 2019. CFO Hans Grüter recounts the exciting and emotional time.

The moment arrived on 25 October 2019. At exactly 9:01:29 a.m., the four letters SWON scrolled across the big board of the Swiss Stock Exchange for the very first time. That ticker symbol belongs to SoftwareONE, based in Central Switzerland, a world-leading supplier of end-to-end software and cloud solutions that operates in 90 countries. SoftwareONE opened at a price of CHF 18.00 per share and an IPO market capitalization of CHF 2.85 billion. How did the CFO of SoftwareONE (picture above, (picture above, second from left) experience the initial public offering? “The emotions were akin to what one feels at the wedding or birth of a daughter or son,” says Hans Grüter, a father of two. “I view SoftwareONE as our baby that has now grown up.”

SoftwareONE’s initial public offering was one of seven new company listings on the Swiss Stock Exchange in 2019, marking a continuation of the positive trend in recent years registered by exchange operator SIX. “SoftwareONE shows that we are an attractive stock exchange also for the IT industry,” Jos Dijsselhof, CEO of SIX, says. “The IT sector is fundamental to innovation and economic development.” Grüter confirms that “SIX provides an attractive trading venue for tech companies.” The CFO adds that “there is a good investor base and vibrant investor demand here.”

Advantage Switzerland
Grüter always knew deep down that SoftwareONE would list in Switzerland: “We’re a Swiss company headquartered in Stans, our founders and many members of our executive management team are Swiss, and they adhere closely to Swiss values. Swissness is part of our DNA.”

Attention leads to new customer contacts.

Hans Grüter, CFO SoftwareONE

“There are many good reasons to go public on the Swiss Stock Exchange,” explains Valeria Ceccarelli, Head Primary Markets at SIX. “To start with, the Swiss Stock Exchange provides access to large pools of capital.” Assets totaling more than CHF 6 trillion are managed from Switzerland, and Switzerland is the world leader in global cross-border asset management, with a market share of around 25%.

Measured by the free-float market capitalization of its listed companies, the Swiss Stock Exchange is one of the largest securities exchanges in Europe. Ceccarelli, who has been involved in around 40 company listings, cites the high visibility and raising of a company’s profile as another selling point. A listing on the Swiss Stock Exchange is a statement for transparency, she says. Moreover, the resulting concentration of coverage by financial analysts raises a lot of attention among investors and the media, she adds. SoftwareONE is a good example of that. “One goal of our IPO was to further elevate our name recognition, visibility, and global profile,” Grüter explains. “Prominent visibility is a huge advantage,” he says, because “attention leads to new customer contacts.”

Countdown to IPO Day
The regulatory requirements from SIX Exchange Regulation meet the strictest international standards. Nonetheless, the Swiss Stock Exchange is market-oriented, Ceccarelli says. The listing procedure is fast and uncomplicated, and a listing application can be approved in just four weeks. Grüter concurs: “Access to the regulator was definitely important to us.” SIX supports companies with comprehensive services throughout the entire process. “We felt very welcome,” Grüter says. “The communication with SIX was straightforward, good, and trustworthy.”

SoftwareONE spent years preparing for IPO day. One example that Grüter cites was broadening the shareholder base and strengthening SoftwareONE’s balance sheet, but always in alignment with the company’s traits because “it’s essential for a company to stay true to its DNA. The IPO should mark a further chapter in the company’s ongoing unique success story.” “A very intense summer got underway” around six months prior to the IPO, Grüter says. He recalls experiencing that period as being very time-consuming, but also very exciting. The team grew closer together and learned a lot more about itself through the questions posed by investors, he recounts.

The IPO enabled incumbent investors to cash out part of their holdings and made it easier for SoftwareONE’s 5,300 employees to acquire an equity interest in the company. Employees taking an ownership stake is important for the corporate culture and solidarity, Grüter says, because “it strengthens mutual interests.”

Now that shares of SoftwareONE trade publicly, strict rules apply to corporate reporting, and the company must communicate more with investors. That means more work for the CFO. Is that a burden? “No.” The dialogue is fascinating and instructive, Grüter says. “Good investors challenge you and help you to sharpen your focus and spot potential for improvement.”

Grüter, who has been with the company since 2014, always kept an eye on the stock-market price during the early post-IPO stage. Volatility subsequently diminished, and the CFO could transition back to routine day-to-day business.