Jul 2010
IPO pipeline remains robust for remainder of 2010; financial sponsors provide leadership
Continuing the momentum from the second half of 2009, US IPO activity pushed forward in the second quarter of 2010. A year-over-year comparison indicates a significant increase in IPO activity in the second quarter of 2010, nearly tripling the number of deals seen during the same period in 2009. For the three months ending June, there were 39 IPOs that raised $5.1 billion compared with the 12 IPOs raising $1.6 billion in the second quarter of 2009.
For the first six months of the year, IPO volume reached 66 deals, raising $9.2 billion versus 14 deals raising $2.3 billion in the same period last year.
While the number of IPOs was up in Q2, the second quarter witnessed a steady decline in the number of completed offerings each successive month, with 17 completed deals in April, followed by 11 in May and 11 IPOs in June. In May and June, 15 IPOs were either withdrawn or postponed.
"Despite recent market hurdles, the IPO pipeline continues to build with an additional 68 companies registering new deals during the second quarter," said Scott Gehsmann, capital markets partner with PricewaterhouseCoopers' Transaction Services in the US. "While recent market swings have posed a short-term threat to companies looking to price their IPOs, the path to a successful IPO is a journey - not a sprint. Interim market challenges provide opportunities to reflect on the adequacy of the issuer's readiness to enter the public equity markets and the post-IPO strategic plan."
Financial sponsors continue to provide leadership in the US IPO market. The second quarter saw 32 of the 39 new deals raising $4.2 billion coming from financial sponsors, representing approximately 84% of total proceeds.
In terms of deal size, we expect small and mid-cap deals to continue dominating IPO volume. At the same time, a number of deals with offering proceeds in excess of $1 billion are expected during the second half of 2010. The volume and value of IPOs from foreign private issuers, particularly China, are also expected to grow during the second half of 2010. Foreign private issuers contributed a total of 9 offerings raising $540 million during the second quarter; China leading the pack with 6 offerings.
| |
$ (in millions) |
Number of IPOs |
| US |
$4,530.7 |
30 |
| Non-US |
540.5 |
9 |
| Total |
$5,071.2 |
39 |
Twenty NYSE listed IPOs in the second quarter raised $3.4 billion, while the NASDAQ saw 19 IPOs raising $1.6 billion.
|
$ (in millions) |
Number of IPOs |
| NYSE |
$3,477.9 |
20 |
| NASDAQ |
1,593.2 |
19 |
| Total |
$5,071.2 |
39 |
The energy sector led industry deal value with four IPOs raising $1.3 billion dollars, while the technology sector contributed the majority of deals with 11 IPOs raising $778 million. The financial, industrial and services sectors each contributed five deals, raising $1.2 billion, $521 million and $403 million, respectively. We believe that the diversification across industry sectors bodes well for the overall health and long-term viability of the IPO market.
Three months ended June 30 - Volume and value by industry
|
Value (USD millions) |
Number of IPOs |
| Energy |
$1,288.7 |
4 |
| Financial |
1,237.3 |
5 |
| Technology |
778.4 |
11 |
| Industrial |
520.5 |
5 |
| Services |
402.6 |
5 |
| Consumer |
327.5 |
3 |
| Transportation |
374.5 |
2 |
| Healthcare |
141.7 |
4 |
|
|
|
| Total |
$5,071.2 |
39 |
A table outlining IPO value and volume by quarter beginning in 2007 is as follows:
PwC US recently released the fifth edition of the
Roadmap for an IPO: a guide to going public, which provides companies considering going public with guidance and insights on:
- The going public process
- Significant accounting, compensation, regulatory and tax-related considerations
- Ongoing reporting requirements and operational considerations of being a public company
PricewaterhouseCoopers Global Capital Markets Group is a dedicated global team of professionals that provides high-value accounting advisory services to non-US companies keen to tap the US or other international capital markets. They are specialist in both US generally accepted accounting principles and International Financial Reporting Standards. With professionals based in a total of 25 countries, it advises and supports clients on issues relating to the application of accounting standards, rules and procedures of the US Securities Exchange Commission, including GAAP conversions, capital markets fund raising, cross-border filing compliance and the other regulatory requirements.
