New registrants in the IPO pipeline reach levels not seen since Q3 2008
NEW YORK, Oct. 26 /PRNewswire/ -- The IPO pipeline increased to 34 registrants
seeking to raise $10.9 billion as of September 30, 2009, up from 28
registrants seeking to raise $7.6 billion at the end of Q2 (June 30, 2009),
according to the quarterly Ernst & Young LLP US IPO Pipeline study.
This increase reflects tremendous activity throughout the quarter, including
30 new registrants, 14 companies that went public (including some of the new
registrants) and 15 companies that passed the one-year expiration for
inclusion in the study. Comparatively, the previous quarter included eight new
registrants and 10 companies that went public.
Three additional companies that went public had passed the year mark and were
no longer included in the pipeline: A123 Systems Inc, Select Medical Holdings
Corp and long-time registrant Cumberland Pharmaceuticals Inc (which originally
filed in 2007). One registrant withdrew from the pipeline and one, Cloud Peak
Energy Inc, re-registered at a lower level of capital.
"Patience and preparation are paying off. This rebound of activity rivals the
number of new registrations a year ago, which gives the total pipeline a
bounce even as many companies go public," says Maria Pinelli, Americas
Director, Strategic Growth Markets, Ernst & Young LLP. "China-based companies
are attracted to this market. Five new registrants from China replaced five
companies from China that went public, building on a recent pattern of
activity by companies from the area."
New registrants represent larger deals than those seen in over a year. They
totalled $11.353 billion of capital to raise (an average of $378.8 million per
company). Most significantly, JBS USA Holdings Inc seeks to raise $2.0
billion. Another billion-dollar new entrant, Shanda Games Ltd., registered
and went public in the third quarter.
Year over year IPO Pipeline comparison:
Time Period # of Deals Dollar Amount Average Deal Size
-------------- ---------- ------------- -----------------
End of Q3 2007 151 $30.4 billion $201.5 million
-------------- ---------- ------------- -----------------
End of Q3 2008 79 $17.6 billion $231.4 million
-------------- ---------- ------------- -----------------
End of Q3 2009 34 $10.9 billion $321.6 million
-------------- ---------- ------------- -----------------
"The $10.9 billion in the pipeline certainly trumps last quarter's total of
$7.6 billion, and the resurgence of substantial deals will continue to drive
pipeline growth," says Jackie Kelley, Americas IPO Leader, Ernst & Young LLP.
"What we don't see in these numbers today but can expect to see in the future
is a number of mid-sized companies, many backed by private equity and venture
capital firms. These companies are taking steps today to enter the pipeline
in the next few months."
Technology companies lead the pipeline in the third quarter in deals, if not
dollars. Tech's six registrants - all newly filed in August and September -
represent $862 million. Oil and gas operations followed with four deals
representing $1.77 billion. This quarter, retail and wholesale leaped over
other industries with three deals that represent $2.85 billion. Most industry
categories showed at least one new registrant, while construction, provider
care, professional firms and services, and diversified industrial products
each gained two.
Regionally, the level of activity from Greater China almost met the level of
activity in the leading US regional markets, but not their dollar size. The
four new registrations from Greater China that remain in the pipeline sought
to raise $363 million, compared to five deals for the Pacific Northwest ($635
million), four deals in the Pacific Southwest ($3.3 billion), five deals in
the Southeast ($1.7 billion) and three deals in the Southwest ($1.4 billion).
California is home to five registrants, followed by Texas with four, and
Illinois and Florida with three each.
The Ernst & Young LLP U.S. IPO Pipeline Report is issued quarterly as a
forward-looking indicator of the IPO market. The IPO Pipeline data is refined
to eliminate bias from financial services organizations, real estate
investment trusts and other holding companies that represent assets under
management instead of core businesses. It also eliminates any registrants
sitting on the books for more than 12 months - long-term applicants that may
bloat numbers, but don't reflect current market trends.
About Ernst & Young's Strategic Growth Markets Practice
Ernst & Young LLP's Strategic Growth Markets (SGM) practice guides leading
high-growth companies. Our multi-disciplinary team of elite professionals
provides perspective and advice to help our clients accelerate market
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undisputed leader in taking companies public, advising key government agencies
on the issues impacting high-growth companies and convening the experts who
shape the business climate. For more information, please visit us at
www.ey.com/us/strategicgrowthmarkets.
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Young Global Limited, each of which is a separate legal entity.
This news release has been issued by Ernst & Young LLP, a member firm of Ernst
& Young Global Limited located in the US.
SOURCE Ernst & Young
Katie Johnston of Ernst & Young LLP, +1-201-872-7194, katie.johnston@ey.com,
Susan Sugg-Nuccio of River Communications, +1-914-686-5599,
ssugg-nuccio@riverinc.com
