The U.S. IPO market is building momentum, and listings through the third quarter of 2013 have already outpaced the total number of IPOs for all of 2012. Healthcare is leading this trend. Based on the EY Global Trends Report Q3 2013, North America reported 36 healthcare IPOs during the first nine months of 2013 compared with 22 in real estate and 20 in technology, the next two most active sectors. The largest IPO in the third quarter of 2013 was a healthcare company – Envision Healthcare Holdings Inc., raising $1.1 billion with its listing on the New York Stock Exchange. At 9.3 percent, the median first-day return from healthcare companies outperforms the median return for all U.S. IPOs of 5 percent. This strong market performance is expected to continue into 2014.
A strong industry profile helps a company achieve a successful IPO. Given SEC regulations and quiet period restrictions, companies planning to go public need to consider their communications strategies well in advance of an IPO. Once a company announces its intention to go public and files a registration statement with the SEC, management will need to review its communications policies and procedures. The SEC generally allows companies to continue their established communications protocols to support standard business activity.
Ongoing communications for healthcare companies is particularly crucial. Corporate communications departments have important audiences to consider beyond the investor and analyst communities – physicians and medical staff, referrers, employees, patients, B2B partners, regulators, and the general public. Companies with well-established communications procedures have a better chance of maintaining those policies and tactics for a more consistent flow of routine company news during the IPO process.
The head of communications for a pre-IPO company needs to demonstrate a solid track record of press release protocols, industry event participation, marketing and adverting strategies, and social media activity. And because healthcare companies often face outlier challenges – such as negative patient events, poor regulatory surveys, medical malpractice claims and above average union interest – having a solid and proactive communications strategy will help prepare the company to weather those storms.
After a company files its registration statement with the SEC, even basic PR initiatives that were not previously part of a company’s regular communications plan can pose challenges. The quiet period during an IPO does not necessarily mean NO communications, but companies need to approach their communications strategies thoughtfully long before they consider their IPO.