Trends Bode Well for Q2 IPOs

by Ken Urish 11. April 2013 12:13
Normal 0 false false false false EN-US X-NONE X-NONE There were 31 IPOs in the U.S. in Q1 of 2013 vs. 42 in Q1 2012* - statistics that taken alone would indicate a poor start for this year. However, there are positive trends that indicate we could see significant growth in activity for Q2 and beyond in 2013. Although the number of deals was down, IPO proceeds are up 28% vs.Q1 2012. Offerings have averaged $245 million thus far in 2013, an increase of 75% from the average deal size of Q1 2012. Benefiting from the strength of the overall stock market, the average IPO in 2013 has returned almost 18% from its offer price. In addition to the increased proceeds, another positive trend is the breadth of industries represented in offerings thus far this year. Technology companies traditionally lead in bringing offerings to market – they represented almost 30% in 2012. But Q1 of 2013 saw multiple offerings from numerous industries, led by the financial, healthcare, real estate, energy and technology sectors. Even offerings from industrial companies have been well received. Broad industry participation, combined with stock market and other economic indicators, creates a promising outlook for IPO activity for the balance of the year. As Brian Eccleston of the Capital Markets practice of our Alliance partner BDO notes, “the breadth of industries represented among Q1 offerings bodes well for the economy and the U.S. IPO market moving forward.” *Renaissance Capital is the source of this historical data related to the number, size and returns of U.S. IPOs.    
Categories: Advisory

PE Deal Forecast for 2012: Gradual Clearing

by Ken Urish 7. February 2012 10:27
The research firm PitchBook recently completed a national survey to develop a 2012 forecast for the Private Equity Industry. More than 100 senior executives at PE firms ranging to $72 billion in assets responded. The main takeaway according to the survey? Don't expect big increases in deal flow from the modest 2011 levels. A majority of private equity fund managers (70 percent) - regardless of fund size - expect to close only two or three deals during the next 12 months. This is a an increase from 2011, when 47 % of fund managers reported closing no new deals, and another 19% closed only one. While portfolios are in the black, individual companies continue to struggle - 22 percent of respondents indicated that more than 20 percent of their portfolio companies are currently performing below forecasts. But the trends are positive. The portfolio companies are rebounding, as funds continue to mitigate loses and bankruptcies decline.  While 11% of respondents reported declaring bankruptcy for one or more portfolio companies during the trailing 12 months, only three percent expect to do so in the coming year. And significantly, most respondents remain committed to their primary investment strategies. Only 7% have asked to change investment strategies and 11% are expected to do so within the next 12 months. The PitchBook survey was performed for BDO's Private Equity practice. For more details, please see this press release.  
Categories: Advisory

What’s Next – New Standards for Private Companies

by Laura Lewis 12. July 2011 15:58
Financial Accounting Standards Board (FASB) has identified several factors that indicate major differences in the financial reporting needs of public companies versus private companies or governmental entities. This is an initial assessment that comes from comments over two years from dozens of interested stakeholders gathered by the Board. From these differences, FASB will be able to establish a “differential framework” that will be used in determining if different financial standards will be created to apply to private companies. The framework will be used by the Board to decide when and how to modify specific U.S. GAAP accounting standards for private company use. “This work is an important step forward in the FASB’s effort to develop a set of criteria for evaluating when accounting or disclosure standards should be different for private companies,” said FASB Chairman Leslie F. Seidman. “This process demon­strates our commitment to better serving the needs of without sacrificing the quality and fundamental level of comparabil­ity that are the touchstones of the U.S. accounting system and U.S. capital markets.” The significant differences include: the types of users, access to management, investment strategies, ownership structures, accounting resources and education. What’s next? FASB will continue to solicit input from those using, preparing and auditing financial statements of public companies. In addition, the board will expose a draft of the proposed differential framework for industry feedback.
Categories: Assurance