- Study Projects $45 Billion in IPO Proceeds on U.S. Exchanges for 2011 -
CHICAGO--(BUSINESS WIRE)--According to a new study by BDO USA, LLP, one of the nation’s leading accounting and consulting organizations, capital markets executives at leading investment banks predict continued growth in the number of initial public offerings (IPOs) on U.S. exchanges in 2011. Close to three-quarters (72%) believe U.S. IPO activity will increase this year compared to 2010, with almost a quarter (24%) describing the increase as substantial. Only nine percent of the survey participants expect a decrease in IPOs in 2011, while 19 percent forecast activity will be unchanged from 2010. Overall, bankers predict an 11 percent increase in the number of U.S. IPOs in 2011. They anticipate these offerings will average $268 million, which projects to more than $45 billion in total IPO proceeds (an increase of approximately 18%) on U.S. exchanges in 2011.
“This indicates a move to larger offerings in 2011.”
“With the number of IPOs on U.S. exchanges more than doubling in 2010, it isn’t surprising that investment bankers are forecasting more measured growth in the number of deals for 2011. However, when you consider that the General Motors offering, by itself, accounted for more than 40 percent of all U.S. IPO proceeds in 2010, the projected growth in volume reveals a growing confidence in the capital markets community. Absent the GM IPO, the forecast would be calling for the amount of IPO proceeds to double in this year,” said Jay Duke, a Partner in the Capital Markets Practice of BDO USA. “This indicates a move to larger offerings in 2011.”
According to BDO USA Capital Markets Partner, Christopher Tower, “Sponsor-backed deals played a significant role in the strong growth of U.S. IPO activity in 2010 from both a volume and performance perspective. Capital markets executives clearly see this trend continuing in 2011, with almost half identifying PE firms as the main source for IPOs in the coming year.”
Strong majorities of investment bankers predict an increase in the number of IPOs in the technology (87%), energy (83%), biotech (65%) and healthcare (60%) verticals in 2011. This is consistent with the industries that were identified as growth leaders in last year’s study. By comparison, there is more modest support for the likelihood of growth in IPOs for industrial/manufacturing, financial and media/telecom (see full chart below).
|
Industry |
Increase |
Flat |
Decrease | |||||||||
| Technology | 87% | 12% | 1% | |||||||||
| Energy/Natural Resources | 83% | 14% | 3% | |||||||||
| Biotech | 65% | 33% | 2% | |||||||||
| Healthcare | 60% | 31% | 9% | |||||||||
| Industrial/Manufacturing | 44% | 43% | 12% | |||||||||
| Financial | 42% | 39% | 18% | |||||||||
| Real Estate | 37% | 25% | 38% | |||||||||
| Media/Telecom | 34% | 46% | 19% | |||||||||
| Consumer/Retail | 23% | 46% | 30% |
(Proportions of Capital Markets Executives expecting IPO activity to increase, remain stable or decrease in specific industries.)
These are just a few of the findings of The 2011 BDO IPO Outlook survey which examines the opinions of 100 capital markets executives at leading investment banks regarding the market for initial public offerings in the United States in the coming year. The survey was conducted in December 2010.
Other major findings of The 2011 BDO IPO Outlook Survey:
The BDO IPO Outlook Survey is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to capital markets executives, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation's leading investment banks.
BDO USA is a valued business advisor to businesses making a public securities offering. The firm works with a wide variety of clients, ranging from multinational Fortune 500 corporations to more entrepreneurial businesses, on a myriad of accounting, tax and other financial issues.
About BDO USA
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 40 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,082 offices in 119 countries.
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.
