An IPO can strengthen and secure the continuation of the family-run business

Most family businesses tend to be over-controlling of their destiny, which sometimes can limit their potential to grow and, in some cases, survival. Well-established Maltese family businesses would do well to consider going public to exploit new sources of capital. By doing so, they not only build long-lasting legacies but also manage to address and balance the family’s obligations. Going public can strengthen a family business for generations to come and cement the family’s long-term influence, argues Mark Aquilina, founder and Chief Visionary Officer of NOUV.

Many Maltese companies have what it takes to go public if only they embraced the idea and made it part of their mindset. Each family has a unique DNA, but unfortunately, many share a similar passive attitude and, at times, a complacent way of doing business.

There are 30 companies listed on the Malta Stock Exchange Equity table. Specifically, banks, insurance companies, and property development-related projects dominate that list. So, what could be the rationale of traditional Maltese businesses who still prefer raising finance through debt, including a corporate bond issue, rather than opting for an IPO?

One of the main motivations behind this reasoning could be the lack of appetite of most businesses to bring in external executives and transform corporate governance.

It is only natural to be over-protective of a company’s legacy, which most times represents the history of entire families. I can only imagine how challenging it must be for the owners of family enterprises to balance safeguarding their family’s wellbeing and business culture with the ambition to grow the business further. But times have changed, the world is connected more than ever, and agility has become the name of the game. 

As the founder of my own company, I can understand the struggle of selling company equity. But it doesn’t have to feel that way. Family members can remain at the boardroom table to ensure the company remains steadfast and grounded in its culture.

Venture capital or private equity investors usually take a seat on the board in some supervisory form; however, with an IPO, shares can be publicly traded and not restricted to one investor allowing the family to keep its footprint and stronghold.

Moreover, by introducing external management to the board, the family brings greater scrutiny to decision-making at the executive level, highlighting the importance of governance.

Let’s go through the pros and cons of going public.

It remains a fact that going public is a decision only the family can take – following careful consideration of the company’s vision and where it wants to be in the near and not so near future. It is a very personal and important decision, which must be handled with rationale and taken in an informed and logical manner by weighing the main pros and cons of going public as follows:


• Take the opportunity to structure and value the business. 

• Malta provides fiscal incentives for transferring securities to a listed company.

• Increase the image and prestige of the family business.

• Put in place the necessary succession planning processes, and by doing so, the company will become more attractive to C-level external managers wanting to join a listed company with transparent corporate governance.

• Improved access to capital markets.

• A diversified mix of public investors can secure the balance between remaining in line with the company’s culture and achieving more independence.

• The company goes to the next growth level and turns into a brand of IPO levels, making it easier to interact with stakeholders.


• Going public is lengthy due to the regulatory aspects and obligations.

• The costs of the process are relatively expensive.

• Public disclosures lead to more transparent operations.

• The commitment to deliver can yield additional pressures.

• New external shareholders and board members mean family members get to share their daily business lives with outsiders. However, external capable people will not only help see things from outside the proverbial ‘box’ but will also bring a fresh way of doing things. 

We can safely say that an IPO can bring a much-needed transformation to a family business’s corporate governance. 

Why should I do it and when best to go for it

While each family business has its dynamics, the reasons to go public could be:

• Strategic adjustments such as an acquisition or merger, consolidation or restructuring.

• Capital raising to finance growth or a new project. 

• Changing family priorities, such as shifting to a new generation or a part of the family, might decide to move out. 

The maturity level of its products or services, operations, finances, image, branding and customer service must be at the highest. 

Preparing for an IPO

When the time comes, a company should keep its focus on the factors it can control, namely:

• Developing a business model with sustainable growth potential.

• Putting together a strong team in the run-up to the IPO and beyond.

• Ensuring a solid business infrastructure is in place and systems implemented to facilitate financial planning and forecasting.

• Developing appropriate risk management practices and smooth financial reporting processes.

• Allow ample time to ramp up for the IPO, usually 24 months. 

Once a company decides to go for an IPO, it is crucial to be guided and adequately prepared, as this preparedness can also significantly enhance its valuation. Most often, the lack of readiness is due to the inability of management to appreciate the effort involved in the process entirely. These challenges are preventable with proper insight and resources from independent firms like ours that help the company evaluate and enter this process with a complete understanding of the opportunities and risks. 

Post IPO: What’s next?

The actual work starts on the dawn of the day after the IPO’s completion!

Following the IPO, the CEO and his team should be driving a newly asserted drive towards developing a stronger and more inclusive culture. Awareness of the importance of culture within the new organisation is crucial for the success of any IPO because the company’s culture now concerns the people within the organisation and the new shareholders (the public).

More effort should be in place to incentivise established large Maltese businesses to go public. Creating a forum of discussion to explore this prospect better and learn from the experience of others would be a good start. 

NOUV prepares organisations to ‘go to market’ by helping them move forward quickly, reducing business disruption to day-to-day operations while implementing the changes that matter. We provide an array of capabilities to support investment decision-making, backed by expertise across diverse industry sectors and all business functions, including governance, operations, finance, human capital, technology, sustainability and regulatory.