US IPO pipeline Watches and Waits, According to Quarterly Report From Ernst &
Young LLP
NEW YORK, April 30 /PRNewswire/ -- Potential IPO registrants are waiting
for increased clarity and hoping for market momentum to carry them forward.
According to the quarterly Ernst & Young LLP US IPO Pipeline Report, the first
quarter of 2008 watched the wave of 2007 begin to flatten.
In the first quarter, there were 90 IPOs in the US markets' pipeline, the
same number of IPOs as in the pipeline in Q4 of 2007. These registrations
represent $17.3 billion, up slightly from the $16.8 billion of last quarter
even after Visa went public and was removed from the pipeline. The number of
new registrants remains stable, with 23 filing to go public in Q1 2008,
compared to 24 in Q4 2007. But January's surge of 10 new registrants may have
been the crest of the record-breaking numbers in 2007, as February brought in
six new registrants and March saw seven.
"Most market observers talk of waiting for a positive second half of the
year, but to keep its pace of new registrants without starting a trend of
withdrawals, the markets need to pick up during the second quarter." said
Maria Pinelli, Americas Director, Strategic Growth Markets, Ernst & Young LLP.
"Patience and confidence are likely to ebb by June, but if you're a good
company with solid business plans, practices and proven results, opportunities
still await you in the markets."
Compared to last year at this time, the overall IPO pipeline is not as
robust.
IPO Pipeline Comparison:
Time Period # of Deals Dollar Amounts Average Deal Largest Deal
Size
End of Q1 2007 103 $22.8 billion $221 million $4.0 billion
(Blackstone
Group LP)
End of Q1 2008 90 $17.3 billion $192 million $1.6 billion
(American
Water Works
Co Inc)
"While the total numbers waned from last year, they also get older sitting
in the pipeline," said Jackie Brya, Americas IPO Leader, Ernst & Young LLP.
"In Q1 of 2007, companies sat for an average of 113 days compared to 163 days
for Q1 2008. More than five months without resolving those costs can start to
test any CFO's patience."
Among industry sectors, technology maintained the steady current to the
IPO pipeline during this time of wait and see. The three most active sectors
in the Q1 pipeline were technology (26 registrants), biotech (12 registrants)
and pharmaceuticals (11 registrants). Technology also grew in dollar amounts,
with companies filing to raise $3.3 billion, compared to $2.8 billion in the
Q4 2007 pipeline. Oil and gas and pharmaceuticals filed to raise $1.9 billion
each.
"Technology also continues to attract our foreign issuers, with four out
of the five non-US pipeline registrations coming from technology or biotech.
Pharmaceuticals are slightly more active than in Q4, but the oil and gas
sector pipeline dove more than 60% from Q4's total dollars," said Brya. In Q4
of 2007, oil and gas companies were registered to raise $5.3 billion, compared
to Q1 2008, in which they registered to raise $1.9 billion.
State by state, California companies were the most active with 15 filings,
representing 16.7% of the total number of filings. Texas followed with 11
registrants, New York with eight and Massachusetts with seven.
The Ernst & Young 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 the current market trend.
About Ernst & Young's Strategic Growth Markets Practice
Ernst & Young's Strategic Growth Markets (SGM) practice guides the best
high-growth companies. Our multi-disciplinary team of elite professionals
provides perspective and advice to help our clients accelerate market
leadership. SGM delivers assurance, tax, transactions and advisory services
to thousands of companies spanning all industries. Ernst & Young is the
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.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and
advisory services. Worldwide, our 130,000 people are united by our shared
values and an unwavering commitment to quality. We make a difference by
helping our people, our clients and our wider communities achieve potential.
For more information, please visit www.ey.com.
Ernst & Young refers to the global organization of member firms of Ernst &
Young Global Limited, each of which is a separate legal entity. Ernst & Young
Global Limited, a UK company limited by guarantee, does not provide services
to clients.
This news release has been issued by Ernst & Young LLP, a member firm of
Ernst & Young Global Limited.
SOURCE Ernst & Young LLP
Katie Johnston, Ernst & Young, +1-212-773-7194, katie.johnston@ey.com; or
Susan Sugg-Nuccio, River Communications, +1-914-686-5599,
ssugg-nuccio@riverinc.com
