Category Archives: IPO

Should I stay or IPO now? (In 2016, it could depend on your sector)

When planning an IPO, proper timing and pricing are perhaps the most important decisions to be made. However, with volatile markets, interest rate increases and an ongoing economic recovery, significant questions exist about whether the current environment is conducive to going public. The answer is that at any time, IPOs in some sectors are more likely to succeed than others due to a combination of factors.

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In 2015, 173 U.S. companies held IPOs and their stocks are trading at an average of 5% below their IPO price. This suggests that investors – especially large, institutional investors – don’t have a strong appetite for IPOs at this time. Furthermore, the Federal Reserve’s recent interest rate hike may affect the immediate demand for IPOs.

But the fact is, a company’s prospects will vary depending on the market conditions in its specific industry. Consider ttechnology and healthcare…

A PwC report on Q3 U.S. technology IPOs found the market was quiet. The two U.S. tech IPOs in Q3 were worth $168 million – a sharp drop from the same period last year, when the equivelent number brought in $524 million. Certainly, several tech startups that had been planning IPOs recently decided the timing wasn’t right and dropped their plans to go public, citing poor or unstable market conditions that wouldn’t support the share valuations they felt their companies deserved. Many others that have gone ahead with their plans are pricing shares at the lower end of their projected ranges.

It’s worth noting, however, that the prospect of a lower share prices shouldn’t necessarily scupper plans for an IPO. Online payment startup Square, for example, recently decided to proceed with its listing despite drastically cutting its share price to $9 – an amount that valued the company billions of dollars lower than what private investors estimated only last year. However, on the day it went public, Square’s stocks jumped by 45%, demonstrating that investors could simply be skeptical of the potential overvaluation of tech companies, rather than of market conditions in general.

In comparison, the healthcare sector is experiencing a boom of IPO activity. Health care accounted for more than half of the U.S. IPOs in Q3 and has been by far the most popular sector for deals each quarter for more than a year. The sector even traded slightly up during Q3 – posting a 2% return on average – making it a relative bright spot compared to the overall negative trend in 2015.

Ultimately, investor confidence will be the largest determining factor in the strength of the IPO market in the months ahead. While stronger economic fundamentals and more stable markets are expected for the 2016, companies would be well-advised to focus on sector-specific conditions, rather than the overall market, when determining the ideal time to go public.

Companies need to understand the dark side of an IPO (video)

Successful IPOs can make founders, owners and senior executives millionaires overnight, at least on a spread sheet. Equally, millions of equity financing can also be raised overnight—dollars that will be essential for fueling growth initiatives: new products, expanded markets, employee hires, research and development and acquisitions.

That’s the optimistic side. The pessimist view on an IPO is important to discuss as well – not to derail any aspirations you may have, but to help your teams be prepared for the dramatic change a private company will experience.

  1. Higher costs
  2. Less control
  3. Pressure to meet third-party expectations
  4. No “privacy”

Our Bloomberg BNA / Vintage video discusses ALL aspects of an IPO – tapping in the expertise of Barclays, PwC, Baker & McKenzie and our president, Liam Power.

If you enjoyed the brief snippet above, listen to the complete webinar HERE.

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Global influences may redefine “testing the waters” for 2016

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Storm clouds in overseas markets are dampening a heightened optimism for IPO pipelines in developed markets, and “testing the waters” bring different imagery to mind that THIS blog illustrated.  While investor confidence will ultimately determine the pace and growth of IPO activity in 2016, a recent EY report –  Global IPO Trends – points to some key factors:

  • Low interest rates and quantitative easing by the European Central Bank and Japan mean that liquidity remains abundant
  • Lower oil prices are a boost to economic growth
  • The lower gold price suggests market confidence despite the increased volatility

Certain sectors may experience rougher conditions in the near term, as PwC capital markets partner Howard Friedman and Bloomberg’s Alex Barinka warn of a U.S. market selloff affecting biotech IPOs, for instance. Overall, however, an uptick in U.S. high-frequency indicators such as employment, retail sales and exports, paired with low oil prices, an expanding GDP, and healthy consumer spending all provide a positive backdrop for IPO confidence. As 2015 drew to an end, the Fed finally provided insight into its plans for interest rates, raising rates in December for the first time in nearly a decade.

Although the liftoff has begun, its rate hike path is expected to be slow and gradual, which should remove some level of uncertainty from markets. Additionally, analysis by law firm Morrison Foerster points to the JOBS Act, and its “test the waters” provisions, as a further incentive for U.S. companies to explore an IPO option, especially those with smaller revenues.

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Support from Vintage no matter the path

Companies themselves are investigating financing options beyond an IPO — like M&As – and exploring all potential exchanges in an effort to optimize strategic options, which is a prevalent trend among tech companies. A continuation of the market volatility seen during the fall of 2015 would impact the length of time an IPO window is open, requiring that companies looking to float have a compelling equity story in place – one well-suited to their regional presence and their industry – and the ability to jump into the market swiftly if necessary.

Overall, there is a level of optimism for the 2016 IPO market, driven by increased confidence among investors and market players and the ability for companies to file confidentially under the JOBS Act.

IPO outlook defies global headwinds: offers a window of opportunity for 2016

BWO_028RA look at EY’s Global IPO Trends for Q4 2015 gives a glimpse into the IPO pipeline for 2016, and despite a more uncertain outlook for global markets and some cautionary tales, the U.S. IPO market is poised for growth in deals and overall proceeds.

IPO activity in 2015 was more subdued than the banner year that was 2014. EY tracked 173 U.S. IPOs during the year, down 41% from 2014, and capital raised was down 65% at $33 billion – a downward trend that was also seen globally. Considering 2014 was the most active year since 2000, this slowdown in activity does not come as a surprise to most, and the lower number of IPOs for 2015 was only 5% below the 10-year median annual IPO deal level of 183 IPOs.

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This sudden free fall in deal activity can be attributed to increased market volatility due to concerns over Greece and the euro zone, slowed growth in China, and uncertainty present throughout the year regarding the timing of the Fed’s long-anticipated interest rate hike. Other factors included the greater gamut of financing options available to companies, such as private markets and M&A, which was made evident by the strong M&A market in 2015.

Our recent webinar with Bloomberg (video) discusses how to take advantage of this window and plan your 2016 IPO… or exit. WATCH HERE.

Are you REALLY ready to go public? (webinar audio snippet)

Scott Skidmore, Managing Director – Equity Capital Markets at Barclay’s Capital kicked off our “Going Public: A How-to Guide for Making an Initial Public Offering” webinar with Bloomberg BNA, PwC, Baker & McKenzie and Barclays.

In this quick snippet, Scott answered the first core question: Should I take my company public?

Click expand arrows, lower right, to view.

The entire webinar and downloadable slides are available here: http://e.prnewswire.com/how-to-IPO-w-bloomberg.html

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WEBINAR DESCRIPTION

A company can decide to go public at any time; however, this is a complicated process which requires taking various factors into consideration and has a multitude of implications.

Gain an understanding from legal, accounting, and banking perspectives in this “how-to” guide discussing considerations for U.S. companies such as: 1) at what point should a company consider the IPO route; 2) what should be in place before turning to this strategy?; 3) who are the key players in this process?; 4) what considerations should be made when choosing IPO partners?; 5) what steps need to be followed to get the stock listed?; 6) what alternative options exist?; 7) what happens after the IPO?; and, 8) what if the IPO does not go as planned?

“How-to IPO” webinar with Bloomberg BNA, PwC, Baker & McKenzie, Barclays and Vintage

JOIN US FOR THIS SPECIAL CLE CREDIT WEBINAR

Going Public: A How-to Guide for Making an Initial Public Offering

A company can decide to go public at any time; however, this is a complicated process which requires taking various factors into consideration and has a multitude of implications.

Gain an understanding from legal, accounting, and banking perspectives in this “how-to” guide discussing considerations for U.S. companies such as: 1) at what point should a company consider the IPO route; 2) what should be in place before turning to this strategy?; 3) who are the key players in this process?; 4) what considerations should be made when choosing IPO partners?; 5) what steps need to be followed to get the stock listed?; 6) what alternative options exist?; 7) what happens after the IPO?; and, 8) what if the IPO does not go as planned?

Our presenting experts:

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DATE: December 3, 2015
TIME: 1:00 PM ET
PRE- REGISTRATION: CLICK HERE
LENGTH: 60 minutes

COST: Free

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Pre-registration is recommended to save time on event day.
You MUST attend live to receive CLE credit.


Who would benefit most from attending this program? In-house counsel; executive officers; attorneys advising companies of all sizes.

Educational Objectives:

  • The factors to take into consideration when contemplating making an IPO

  • The steps a company should take to properly make an IPO

  • What happens after an IPO, including if the IPO does not go as plannedT



MIKE GOULD, PARTNER, DEALS – CAPITAL MARKETS AND ACCOUNTING ADVISORY SERVICES, PRICEWATERHOUSECOOPERS

Mr. Mike Gould is a Capital Markets partner at PwC with twenty-five years of experience providing accounting, financial reporting and advisory services, while based in the United States, South Korea, and the United Kingdom. Mr. Gould leads the Public Offerings services practice in the US, where he helps his clients access the debt and equity capital markets in the U.S., by providing them with technical and project management advice on accounting and financial reporting issues associated with the SEC registration process, Initial Public Offerings (“IPO’s”), 144a debt and equity offerings, divestitures and carve-outs, and conversions to and from IFRS and U.S. GAAP

MARC PAUL, PARTNER & CHAIR OF THE NORTH AMERICA CORPORATE & SECURITIES PRACTICE GROUP, BAKER & MCKENZIE

Mr. Paul’s practice – both internationally and domestically – focuses on public and private securities transactions, mergers and acquisitions, private equity and venture capital transactions, and spinoffs and corporate reorganizations. He has represented issuers, investment banks, private equity funds, financial institutions and multilateral agencies in transactions throughout the United States, Latin America, Europe, the Middle East and Asia. Additionally, Mr. Paul acts as outside general counsel to numerous business entities – from large multinational corporations to domestic start-up companies.

SCOTT SKIDMORE, MANAGING DIRECTOR, EQUITY CAPITAL MARKETS, BARCLAYS CAPITAL

Scott Skidmore is a Managing Director and is responsible for the Industrial, Real Estate, Gaming & Lodging Equity Capital Origination effort at Barclays. In addition, he currently serves as Chairperson for GAC (Global Advisory Committee). This committee gathers suggestions from junior bankers and implements solutions to enhance the junior banker experience.

LIAM POWER, PRESIDENT, THE VINTAGE GROUP

Mr.Liam Power joined PR Newswire in 2011 as President of Vintage, PR Newswire’s capital markets, corporate service and institutional & funds services division. Mr.Power has full P&L responsibility for Vintage, where he leads all aspects of strategy and operations as well as also sits on PR Newswire’s executive committee. Under Mr. Power’s guidance, Vintage has become a top three provider of solutions that help companies before during and after their IPO.


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Pre-registration is recommended to save time on event day.
You MUST attend live to receive CLE credit.

2015 confidential IPOs holding pace with 2014

In a new technologies and life sciences companies’ IPO report from Fenwick & West LLP, one interesting data parse ( for Vintage’s IPO team anyway) was the direct comparison of confidential IPO filings between 2014 and 2015. Although the entire 2015 IPO market is 33% “softer” than 2014, confidential filings that actually priced are only down 7%.

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There can be many different thought-paths to speculate on this 7% to 33% comparison. Our interactions with confidential IPO clients lean towards that the “testing the waters” phase is creating stronger and more certain offerings. The working groups within the companies and banks are using this time to hone their messaging and tighten up their diligence materials prior their open IPO – the lionshare pricing within one quarter of their initial submission.

It is important to note that according to research firm Dealogic, only 56% of confidential S-1 filings actually price. That’s a lot of toe dipping that never ring the bell.

How complicated is the confidential IPO S-1 filing process? Very. Our whitepaper explains it very tactically.

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CLICK HERE FOR A WHITEPAPER ON THE S-1 FILING PROCESS WORKFLOW

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