IPOs in the U.S. got off to a good start in the first quarter of this year with companies raising $8.91 billion according to data compiled by Bloomberg, a rise of 44%. Globally, public offerings raised almost $20 billion, up more than 18% over the prior year’s period. European companies generated $3.66 billion, a 25% increase over last year. Amongst the largest players was Pfizer’s $2.6 billion sale of Zoetis (ZTS), its animal health unit and Goldman Sach’s offering shares in German apartment landlord LEG Immobilien AG, which raised $1.6 billion.
Globally, IPO volumes rose 37 percent to $21 billion, as the surge in U.S. activity and a rebound in European volumes offset a 56 percent decline in Asia.
So what does this mean for the balance of 2013? From what we are seeing, the pipeline for 2013 in the U.S. is robust with private equity firms driving much of this activity across various sectors including industrial, retail and consumer, and healthcare as they seek to exit investments. Blackstone Group’s Pinnacle Foods – think Hungry-Man frozen dinners and Bird’s Eye frozen vegetables – went public on March 28, raising $580 million. Other large buy-out firms planning IPOs later this year include eye care company Bausch & Lomb Inc., technology products retailer CDW Corp., theme park operator Sea World Parks and Entertainment, and testing services company Quintiles Transnational Corp.
Further, in March the Dow Jones rose to a record level and the MSCI World Index rose to its highest in almost five years. Global economic growth is expected accelerate to 2.4 percent from 2.3 percent in 2012, while China is expected to tick up to 8.1 percent from 7.8 percent and Europe from contraction to expansion. If market gains can be sustained and projected economic recovery continues, we will hopefully see an increasing number of companies emboldened to pull the trigger on their IPOs which would ease the biggest global backlog of IPOs since 2007. While there are contrarian views, we are optimistic that this will indeed take place.
Marilynn Meek is a Vice President at Financial Relations Board and brings over two decades of experience as an officer of Wall Street securities firms and IR agencies. She provides strategic communications programs that include IPOs, M&As, capital raising initiatives, shareholder and analyst communications, and financial crisis communications for micro-cap to Fortune 500 companies.