PricewaterhouseCoopers' U.S. IPO Watch: Second Quarter U.S. IPO Market Nearly Triples 2009 Activity, According to PricewaterhouseCoopers

PricewaterhouseCoopers' U.S. IPO Watch: Second Quarter U.S. IPO Market Nearly Triples 2009 Activity, According to PricewaterhouseCoopers

IPO Pipeline Remains Robust for Remainder of 2010; Financial Sponsors Provide Leadership

NEW YORK, July 6 /PRNewswire/ -- Continuing the momentum from the second half of 2009, U.S. IPO activity pushed forward in the second quarter of 2010, according to PricewaterhouseCoopers' (PwC) U.S. IPO Watch, a quarterly and annual analysis of IPOs on U.S. stock exchanges.

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A year-over-year comparison indicates a significant increase in IPO activity in the second quarter of 2010, nearly tripling the number of deals seen during the same period in 2009.  For the three months ending June, there were 39 IPOs that raised $5.1 billion compared with the 12 IPOs raising $1.6 billion in the second quarter of 2009.

For the first six months of the year, IPO volume reached 66 deals, raising $9.2 billion versus 14 deals raising $2.3 billion in the same period last year.

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While the number of IPOs was up in Q2, the second quarter witnessed a steady decline in the number of completed offerings each successive month, with 17 completed deals in April, followed by 11 in May and 11 IPOs in June.  In May and June, 15 IPOs were either withdrawn or postponed, according to PwC.

"Despite recent market hurdles, the IPO pipeline continues to build with an additional 68 companies registering new deals during the second quarter," said Scott Gehsmann, capital markets partner with PricewaterhouseCoopers' Transaction Services.  "While recent market swings have posed a short-term threat to companies looking to price their IPOs, the path to a successful IPO is a journey -- not a sprint.  Interim market challenges provide opportunities to reflect on the adequacy of the issuer's readiness to enter the public equity markets and the post-IPO strategic plan."

Financial sponsors continue to provide leadership in the U.S. IPO market, according to PwC.  The second quarter saw 32 of the 39 new deals raising $4.2 billion coming from financial sponsors, representing approximately 84% of total proceeds.

In terms of deal size, PwC expects small and mid-cap deals to continue dominating IPO volume.  At the same time, a number of  deals with offering proceeds in excess of $1 billion are expected during the second half of 2010.  The volume and value of  IPOs from foreign private issuers, particularly China, are also expected to grow during the second half of 2010, according to PwC.  Foreign private issuers contributed a total of 9 offerings raising $540 million during the second quarter; China leading the pack with 6 offerings.

Twenty NYSE listed IPOs in the second quarter raised $3.4 billion, while the NASDAQ saw 19 IPOs raising $1.6 billion.

The Energy sector led industry deal value with four IPOs raising $1.3 billion dollars, while the Technology sector contributed the majority of deals with 11 IPOs raising $778 million.  The Financial, Industrial and Services sectors each contributed five deals, raising $1.2 billion, $521 million and $403 million, respectively.  PwC maintains that the diversification across industry sectors bodes well for the overall health and long-term viability of the IPO market.  

A table outlining IPO value and volume by quarter beginning in 2007 is as follows:

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PwC recently released the fifth edition of the Roadmap for an IPO, which provides companies considering going public with guidance and insights on:

• The going public process
• Significant accounting, compensation, regulatory and tax-related considerations
• Ongoing reporting requirements and operational considerations of being a public company

PricewaterhouseCoopers' U.S. IPO Watch is a quarterly & annual survey of  IPOs listed on U.S. stock exchanges.  These include IPOs by domestic and foreign companies, best-efforts, business development companies, filings with the FDIC, and bank demutualizations.  IPOs do not include unit investment trusts and fully classified closed-end funds.  Visit our website, www.pwc.com/ustransactionservices, for our 2006, 2007, 2008 and 2009 US IPO Watch reports.

PricewaterhouseCoopers' Transaction Services

The PricewaterhouseCoopers Transaction Services practice provides due diligence for M&A transactions, along with advice on M&A strategy and integration, restructuring, divestitures and separation, valuations, accounting, financial reporting, and capital raising. With approximately 1,000 deal professionals in 16 cities in the United States, and a global network of over 6,000 deal professionals in 90 countries, experienced teams are deployed with deep industry and local market knowledge and technical experience tailored to each client's situation. The Transaction Services team can be involved from strategy to integration and employ an integrated business approach to uncover the realities of a deal. The field-proven, globally consistent, controlled deal process helps clients minimize their risks, progress with the right deals, and capture value both at the deal table and after the deal closes. For more information about M&A and related PricewaterhouseCoopers services, please visit www.pwc.com/ustransactionservices.

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