Initial public offerings have rebounded to pre-crisis levels in both he U.S. and in U.K., according to a report in the Financial Times. Still, a slower-than-expected pace for technology company listings in the U.S. may keep the market from gaining too much momentum in this country, the FT reported in a separate story.
Citing Dealogic data, the FT reported that the total value of IPO activity in the U.K so far this year is $5.5 billion and could well top 2007′s first-quarter record of $5.87 billion by the time March is over. The U.S. IPO market, meanwhile, has also reached a post-2007 peak, according to the FT, with 50 companies—28 of them in the biotechnology sector—coming to market and raising more than $9 billion raised all told.
JD Moriarty, managing director at Bank of America Merrill Lynch, told the FT that “It should not surprise folks that healthcare and technology are where the lion’s share of activity are coming from because deals from last year are performing well and attractive valuations have held up.” Upcoming listings highlighted by the FT included General Electric’s planned offering for its retail finance business and a scheduled share sale by Ally Finance aimed at raising captial for the financial services company.
At the same time, Moriarty noted that technology IPOs have been slower than many expect so far, though there are still some big deals on the horizon. King.com, the company behind the ubiquitous mobile phone game Candy Crush, is expected to go public this month, the FT noted, and, as the company itself confirmed, Chinese e-commerce company Alibaba plans to list this year.
The FT reported separately that other tech companies once seemingly destined for a public listing, liker Evernote and Square, have rethought their plans for the time being in light of their relative youth as companies and the continuing availabilty of private investment.
“Many of these companies feel no need to rush—particularly as they try to turn their early stabs at generating revenue into durable business models,” FT reporters Andrew Bolger, Andy Sharman, and Arash Massoudi wrote. “Mutual and hedge fund investors have been competing to pour money into mature private companies in the hopes of picking up bargains ahead of an IPO. That has pushed up valuations and reduced the pressure to go public.”
IPO adviser Lise Buyer underscored that point. “The availability of late-stage funds has created a lot of breathing room for some of these successful companies,” the told the FT.
