As of last week, in 2016, only 55 companies have rung the IPO bell on Wall Street (or in Times Square). This is 45%, YOY, of 2015 and 30%, YOY, of 2014. The money raised is the same percentages.
So, with such dramatic reductions in S-1 filings, what has kept our Capital Markets Operations Team so busy? Mergers.
2016’s domestic M&A, although down one-fourth from last years’ tremendous activity, has kept our transactions pros working all three shifts.** SEC form S-4 can be as complicated as an IPO’s S-1 and, absolutely, the production precision needed is equal.
Prior the S-4, our team is onboarding and training the appropriate working groups to manage their virtual data room (VIEW DEMO VIDEO) – assuring the right content gets into the right folders and that the wrongs eyes don’t have access. Security and administrative permissioning is paramount.
Why are companies exiting via M&A rather than an IPO? The Wall Street Journal states several factors, including the soft market performance of many IPOs, buyers’ appetite for great targets and, notably, the underlying patience of Private Equity.
From the WSJ:
“Trader Corp., an online automotive marketplace owned by private-equity firm Apax Partners, was days away from publicly unveiling its IPO plans in early July when it announced a deal to sell itself to Thoma Bravo LLC for about $1.2 billion, according to several people close to the deal. The move surprised many of the company’s IPO bankers, who expected the company to fetch a higher valuation in a public offering, according to people familiar with the matter.”
Regardless of a company’s individual exit strategy, we’re pleased so many are allowing us to help them execute their plan.
**NOTE: By operating three shifts – typesetting, EDGARizing, production – we mitigate rush charges to clients. We KNOW filings are always on deadline. It’s the nature of the business. Charging “rush” charges rarely makes sense.