Quietly, IPO market is staging a rally

Deal pipeline approaching pre-crisis levels; surge in international registrations

Oct 26, 2010 @ 3:10 pm

By Jeff Benjamin

The initial public offering market is alive and well, surging to its highest level since 2007, according to a report from Ernst & Young LP released today.

For the quarter ended Sept. 30, there were 133 companies in the IPO pipeline, a 9% increase over the second quarter when there were 112 companies set to go public.

IPOs for technology companies and Chinese businesses fueled the increase in the third quarter, Ernst & Young said. Total dollar volume grew by 4% to $26.4 billion.

Nevertheless, the average deal size during three-month period, which saw 33 companies go public, declined by 12% from the previous quarter, to $198 million. The reduced deal size reflects an appetite for smaller-company IPOs, according to the report.

The numbers tell the tale. Of the companies registered in the third quarter, 70 were seeking to raise $100 million or less. In the second quarter, only 59 companies were looking to pull in $100 million or less.

Of the 19 foreign companies registered to go public, 16 are from China; all those are looking to raise $100 million or less.

“We saw a surge in international registrations this quarter, especially from Chinese companies,” said Maria Pinelli, Americas director of strategic growth markets at Ernst & Young.

By industry, tech companies represented 21 of the third quarter registrations, and 11 of the IPOs during the quarter were for technology outfits.

The third quarter numbers recall the heady days on Wall Street before the financial markets imploded. In the third quarter of 2007, for example, there were 151 companies, worth a total of $30.4 billion in the IPO pipeline.

The average deal size of the 26 companies that went public in that quarter was $201.5 million.

A year ago, there were just 34 companies in the IPO pipeline. All told, those companies were aiming to raise less than $11 billion.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Tech tools of tomorrow: Innovations your firms can't live without in 2020

Gadget Girl hits the tech pavilion at Pershing INSITE to see what exciting new tools advisers can't afford to miss.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.

CFPs, including brokers, may have to adhere to a stricter fiduciary duty

CFP Board revises its standards and aims to beef up fiduciary requirements of certificants.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print