Companies withdrawing from IPO Pipeline outnumber those that went public in
Q2 2008
NEW YORK, Aug. 5 /PRNewswire/ -- While the IPO pipeline shows an
increase in companies filing to go public, only 80 companies remained in
the IPO pipeline by the end of the second quarter (30 June, 2008),
according to the quarterly Ernst & Young US IPO Pipeline Report.
Registrations are down from 90 companies at the end of the first quarter
(31 March, 2008). Despite the smaller pipeline, Q2 2008 saw 30 new
registrants filing to go public, compared to 23 in Q1 2008 and 24 in Q4
2007.
Of those that were removed from the pipeline in Q2, 19 companies
withdrew or postponed their offerings, 12 were removed after sitting in the
pipeline for over a year and nine companies reached the public markets.
Companies in the current pipeline seek to raise $15.5 billion, down from
$17.3 billion at the end of the first quarter.
The New York Stock Exchange remained one of the top three exchanges
worldwide, raising 11% of global capital and launching two of the top 10
deals for the quarter (American Water and Intrepid Potash -- both
US-domiciled, as well).
"Many factors -- from high market volatility, the slowdown in the world
economy, sustained high oil prices and overall uncertainty -- all combined
to weaken the IPO pipeline for the second quarter," said Maria Pinelli,
Americas Director, Strategic Growth Markets, Ernst & Young LLP. "Market
performance needs to stabilize for at least a quarter before we hope to see
stronger IPO pipeline activity."
The overall IPO pipeline looks particularly pale in comparison to the
market last year at this time.
IPO Pipeline Comparison:
Time Period # of Deals Dollar Amounts Average Deal Size
End of Q2 2007 97 $18.2 billion $ 187.3 million
End of Q2 2008 80 $15.5 billion $ 193.3 million
According to Jackie Brya Kelley, Americas IPO Leader, Ernst & Young
LLP, the average amount of time companies wait in the pipeline has nearly
doubled over the past year. "On average, IPOs now in the pipeline have
remained there for 170 days," said Brya Kelley. "Last year at this time,
IPOs waited in the pipeline just 98 days on average."
Technology (22 companies) and biotechnology (13 companies) are still
the leading sectors in the current pipeline, though these two industries
also represented the most withdrawals. The four asset management companies
in the pipeline combined seek to raise the most of any sector with $2.5
billion.
California remained the most active state with 16 filings representing
20% of IPOs in Q2 2008. New York had the highest capital totaling $2.6
billion with only 4 filings, and represented 17% of IPO capital being
raised this quarter.
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 http://www.ey.com/us/strategicgrowthmarkets.
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SOURCE Ernst & Young
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CONTACT:
Katie Johnston of Ernst & Young LLP,
+1-212-773-7194, katie.johnston@ey.com; or Susan Sugg-Nuccio of
River Communications, +1-914-686-5514, ssugg-nuccio@riverinc.com
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