Companies withdrawing from IPO Pipeline outnumber those that went public in Q2 2008 NEW YORK, Aug. 5
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 DealsDollar AmountsAverage Deal Size
End of Q2 200797 $18.2 billion $ 187.3 million
End of Q2 200880 $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
www.ey.com/us/strategicgrowthmarkets.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and
advisory services. Worldwide, our 130,000 people are united by our shared
values and an unwavering commitment to quality. We make a difference by
helping our people, our clients and our wider communities achieve potential.
For more information, please visit www.ey.com.
Ernst & Young refers to the global organization of member firms of Ernst &
Young Global Limited, each of which is a separate legal entity. Ernst & Young
Global Limited, a UK company limited by guarantee, does not provide services
to clients.
This news release has been issued by Ernst & Young LLP, a member firm of
Ernst & Young Global Limited.
SOURCE Ernst & Young
