Wednesday, December 10, 2014NEW YORK -- Throughout 2014, the U.S. initial public offering market put in its strongest performance since 2000 as a broad range of companies took advantage of strong equity markets and an accommodative financing environment to raise capital, IPO Watch reports.
IPO Watch is a quarterly survey conducted by PwC US, a division of PricewaterhouseCoopers.
Total IPO volume for 2014, as of Dec. 4, reached 288 public company debuts, surpassing the volume of 238 IPOs in 2013 and representing the most active environment for newly listed companies since 2007, IPO Watch said.
IPOs raised $83.9 billion, an increase of 47% over the $56.9 billion raised in 2013, and approach the proceeds of $92.6 billion raised in 2000, the survey found. The IPO market moderated slightly in the fourth quarter as a volatile mid-October crimped new offerings before regaining ground in November.
Between Oct. 1 and Dec. 4, 60 public companies made their debuts, resulting in $13.4 billion in proceeds. This compares to 77 public listings in the fourth quarter of 2013, with $24 billion in proceeds. Included in the 2014 year-to-date IPOs are 18 spinoff IPOs, a 38% increase over the 13 transactions last year.
"Capital markets activity surged in 2014 as U.S. companies took advantage of the continued low interest rate environment and strong investor appetite for higher return investments in new equity issues and high yield debt," said Henri Leveque in a prepared statement. Leveque is a partner in U.S. Capital Markets and accounting advisory services leader of PwC's deals practice.
"Multiple sectors performed well, with overall year-to-date volume led by IPOs in healthcare and technology, as investors searched for strong growth opportunities,” Leveque continued. “This year, we also witnessed the largest IPO in history and several successful spinoff IPOs, a trend to watch in 2015. Given positive economic forecasts for the United States and continued strength in corporate earnings, the IPO markets remain a popular exit for financial sponsors, and provide newly public companies with a platform for liquidity and valuation. Combined with a robust pipeline of upcoming IPOs and strong levels of interest from private companies driving filing activity, IPOs will likely continue to attract investor interest in 2015."
Health care continued to dominate the market in terms of total IPO volume, accounting for 39% that volume this year. On a total proceeds basis, the top industry was technology, driven by the Alibaba IPO, with $31.5 billion in proceeds. During the fourth quarter, the REIT, or real estate investment trust sector, led in value with $2.9 billion in proceeds with just three offerings, capturing 71% of the IPO value in the financial services sector.
Financial sponsors continued to take an opportunistic view of the open equity capital markets, and actively pursued IPOs and other exits of portfolio companies, backing 61% of IPO volume and 71% of value in 2014.
IPO aftermarket performance declined significantly, returning 11% year-to-date, slightly underperforming the S&P 500. Also, the average first-day gains of the 60 IPOs priced during the fourth quarter was 8%, a decrease from the 21% first-day gain for the IPOs that priced in the same quarter last year.
Published by The Business Journal, Youngstown, Ohio.
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