Capital Markets

Second Quarter Saw First IPO RiseSince 2007, PwC Report Finds

But that's only an increase to 12 offerings from an all-time low of two in the first quarter of 2009.
David KatzJuly 15, 2009

Although the volume of dollars raised by U.S initial public offerings remained low in the first half of 2009, the number of IPOs rose in the second quarter of 2009 for the first time since the fourth quarter of 2007, according to a PricewaterhouseCoopers report.

For the first six months, to be sure, there were just 14 IPOs that raised $2.3 billion, including 12 offerings that took in $1.6 billion in the second quarter. That’s quite a drop from the 43 offerings that generated $27.7 billion for the first half of 2008, according to PwC’s quarterly report of all IPOs listed on U.S. exchanges

The first half of 2008, however, saw the whopping $17.9 billion Visa Inc. IPO, “which skewed the amount of proceeds raised during that period,” according to the report. In contrast, the largest offering in the first half of this year was the $720 million Mead Johnson Nutrition Inc. IPO.

The downward slide in IPO volume began in the first quarter of 2008, when the number of offerings dove to 25 from the 101 recorded in the fourth quarter of 2007. It hit its nadir in the first quarter of 2009, when there were only two IPOs that raised $722 million — “the lowest in terms of volume in recent history,” according to the Big Four firm.

In the first half of this year, there were eight IPOs backed by financial sponsors. (The category includes venture capital, buyout, mezzanine, and private equity funds.)  Comprising 57% of the total volume of IPOs, the financial-backed offerings raised an aggregate of $1 billion. In comparison, such funds, although they generated more volume ($1.8 billion) in the first half of 2008 than they did in the first six months of this year, comprised a much smaller piece of the pie: 26% of the total volume during the same period in 2008.

China, the only non-U.S. issuer, had four offerings that raised $300 million in proceeds during the first half of 2009. There were 11 non-U.S. issuer IPOs during the same period in 2008, raising $1.6 billion.