04-06-2005, 03:06 AM
SARBANES OXLEY SLOWS IPO ISSUE - WALL STREET JOURNAL 31 MARCH 2005
Some companies in the US are finding that the Sarbanes-Oxley Act is slowing their progress towards a listing on the stock market. The additional costs and requirements of the legislation have persuaded the companies to take private-equity money rather than opting for a fast initial public offering of stock. While they are still aiming for an eventual IPO, the companies are taking extra time to make sure their houses are in order. Consequently, private-equity investors are being given more opportunities to buy into companies before they go public. Also, Sarbanes-Oxley has made it harder for some small companies to attract outsiders to sit on their boards. âThe environment is such that outside directors who donât need to do these kind of things â who are wealthy and successful â conclude that they donât want to put their fortunes and reputations at risk in the environment weâre in,â says Bruce Evans, managing partner at private-equity and venture capital firm Summit Partners.
Some companies in the US are finding that the Sarbanes-Oxley Act is slowing their progress towards a listing on the stock market. The additional costs and requirements of the legislation have persuaded the companies to take private-equity money rather than opting for a fast initial public offering of stock. While they are still aiming for an eventual IPO, the companies are taking extra time to make sure their houses are in order. Consequently, private-equity investors are being given more opportunities to buy into companies before they go public. Also, Sarbanes-Oxley has made it harder for some small companies to attract outsiders to sit on their boards. âThe environment is such that outside directors who donât need to do these kind of things â who are wealthy and successful â conclude that they donât want to put their fortunes and reputations at risk in the environment weâre in,â says Bruce Evans, managing partner at private-equity and venture capital firm Summit Partners.
