In your analysis, what was (were) the main motive(s) for Zetes to undertake an IPO?

Case Study: Zetes’ IPO
Abstract
The Zetes case tells us the typical story of the small Belgian SME which experienced a surprising growth, and succeeded in anticipating technological changes, in part due to the vision of its leader, Alain Wirtz.
The company quickly became a leading systems integrator and started to plan to call on the public market to give itself a new impulse. At some stage, it appeared to them that the right strategic time for an IPO had come, but at the last minute retrieving equity markets and the disappointing IPO of Telenet
were casting doubts on their plans. Whereas leading bankers proposed a more careful price range, Zetes’ executives started questioning the fundamental rationale for the IPO and wondered what alternatives remained open. The going public decision plus the pricing process represent the key decisions of the case study. This case study also raises a number of questions relative to the potential materialisation of conflicts-of-interest due to the respective roles of the different parties involved in the IPO process.

Questions/discussion points
1. In your analysis, what was (were) the main motive(s) for Zetes to undertake an IPO?
2. What other alternatives did Zetes have in terms of financing choices? Pros and cons of those alternatives?
3. What were the main (potential or actual) conflicts of interest in this case, in terms of
• the pre-IPO relationship between equity- and debt-holders?
• the IPO decision itself (timing, pricing)?
• the post-IPO control over/governance of the firm?
4. What would the financial implications of the IPO be (particularly, but not only, in terms of capital structure)? How would they be affected by a reduction in the price range?
5. What would your recommendation be – should Zetes push ahead with the IPO (should they then accept a lower price range), or postpone the IPO?
6. Would it be a viable alternative for Zetes to abandon the IPO altogether and pursue its growth with current financial means?