September 27, 2007 / 11:48 PM / 12 years ago

Value of U.S. IPOs soars in 3rd qtr, year-to-date

NEW YORK, Sept 27 (Reuters) - The value of new share issues in the United States soared in the third quarter on the back of large IPOs from two companies, one in finance and the other in technology.

Companies raised more than $12.5 billion in U.S. initial public offerings — 67 percent more than the $7.5 billion raised in the third quarter a year ago, based on preliminary figures released on Thursday by data-tracking firm Dealogic.

The period, generally slower than other quarters because of a seasonal IPO lull from mid-August to mid-September, got a boost from the $4 billion generated by offerings from U.S. brokerage firm MF Global Ltd MF.N and software maker VMWare Inc (VMW.N).

The volume of offerings rose moderately, with 43 new issues coming to market in the third quarter, versus 40 a year ago.

“What the statistics show is how a couple of large issues can dominate the sector,” said Francis Gaskins, president of IPO research firm IPOdesktop.com.

Finance companies raised the most cash, with nine IPOs raking in proceeds of $4.3 billion during the quarter.

MF Global, spun off by hedge fund firm Man Group Plc (EMG.L), raised $2.9 billion in July in the second-largest IPO in 2007, after private equity giant Blackstone Group’s (BX.N) $4.7 billion IPO in June, according to Dealogic’s data.

SUN AND SOFTWARE

But where finance deals raised the most cash, technology deals were the most plentiful. There were 12 new issues in the sector, raising $2.5 billion.

VMWare, the year’s fifth-largest IPO, led the surge, raising $1.1 billion with its August offering.

The software maker has also posted robust gains since its IPO. Its stock closed on Thursday at $83.12 per share, a 186 percent premium to its offering price of $29 a share.

That ranks it as the second-best-performing IPO this year, after China’s JA Solar Holdings Co Ltd JASO.O, whose shares have more than quadrupled in value since its Feb. 6 IPO.

Rival Chinese solar companies LDK Solar Co Ltd LDK.N and Yingli Green Energy Holding Co Ltd YGE.N, and Lululemon Athletica Inc (LULU.O), a Canadian retailer of yoga apparel, round out the top-five best-performing IPOs in 2007.

Demand for alternative energy, driven by concerns over both the rising price of fossil fuels and the environmental damage caused by them, led to wide interest in the Chinese solar offerings in the first half of the year. But interest in the sector has waned since, as the market reached near-saturation.

For the first nine months of the year, U.S. IPOs generated $43.5 billion in proceeds, or nearly 40 percent more than the $31.2 billion raised by U.S. issues in the year-ago period.

The number of IPOs also rose — 188 this year compared with 156 in the first nine months of 2006.

A busy pipeline has also raised hopes for the months ahead, with 171 companies having filed with U.S. regulators for IPOs, forecast to generate in the region of $35 billion.

“The Dow is up, Nasdaq is up: The appetite is there for companies that have a solid income statement,” said IPOdesktop’s Gaskins. “But people are looking more critically at income statements now, as a ripple effect of the housing-bubble burst.”

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