U.S. IPOs Double in Value


US Priced 2017

 

2017 IPOs Raised Two Times the Cash Raised By 2016 IPOs; Deal Size Is Up

The dollar amount of funds raised by IPOs in 2017 jumped by 97 percent compared to 2016 and the number of deals increased by 65 percent. Two-hundred and thirty-six IPOs priced in 2017, raising $52.2 billion and surpassing the $26.5 billion raised in 2016 (143 IPOs) and $41.0 billion raised in 2015 (217 IPOs).

The average deal size also increased in 2017. It was $221 million, up by 19 percent from $185 million in 2016 and by 17 percent from $189 million in 2015, indicating a move towards bigger deals. Out of 236 IPOs in 2017, 98 or 42 percent were in the $1 - 100 million range by offer size, 115 or 49 percent were in the $100 - $500 million range, 17 or 7 percent were in the $500 million - $1 billion range and 6 or 3 percent were in the $1 - $10 billion range. In 2017, a larger percentage of IPOs were in the $100 - $500 million range and a smaller percentage of IPOs were in the $1 - 100 million range compared with the previous three years, also indicating a trend towards larger deals.

Big Players

The three largest priced IPOs of 2017 were by Snap Inc. (priced on March 1 and raised $3.91 billion), Altice USA Inc. (priced on June 21 and raised $2.15 billion) and Invitation Homes Inc. (priced on January 31 and raised $1.77 billion). 

Filing to Pricing Is 31 - 38 Percent Faster

US Timing 2017

The average time to completion decreased by 31 percent for emerging growth company (EGC) IPOs, 33 percent for all IPOs and 38 percent for non-EGC IPOs from 2016 compared to 2017.

On average, in 2017, EGCs took 65 days to complete an IPO (from date of first filing to pricing date). The average for all companies was 67 days and the average for non-EGCs was 86 days.

In 2017 non-EGCs took 65 percent less time to complete their IPOs than they took at the peak of 2015 (248 days). All IPOs took 33 percent less time to complete than at the peak of 2016 (100 days). EGC IPOs took 31 percent less time to complete than at the peak of 2016 (95 days).

IPO Pipeline Is Looking Good

US Announced 2017

Three-hundred and nine IPOs were announced in 2017, a 27 percent increase from the 244 IPOs announced in 2016. The 2017 announced IPO deal value of $60.93 billion surpassed by 91 percent the 2016 announced deal value of $31.98 billion.

The three largest announced IPOs of 2017 were by Snap Inc. (announced on February 2, priced on March 1 and raised $3.91 billion), Altice USA Inc. (announced on April 11, priced on June 21 and raised $2.15 billion) and Pagseguro Digital Ltd. (announced on December 26, projected to raise $1.89 billion, but is still pending). 

Top Industry Sectors Are Changing

US Sectors 2017

Although the Consumer, Non-Cyclical sector was the most active sector in 2017 with 65 IPOs, IPOs in the Diversified sector raised the most capital ($10.0 billion).

As in the previous four years, in 2017, the Financial and Consumer, Non-Cyclical sectors outperformed the other industry sectors by number of IPOs.

In 2017, the Diversified sector replaced the Technology sector among the top three sectors by number of IPOs (34 IPOs). The Technology sector delivered 21 IPOs in 2015 and 18 IPOs in 2016, raising $6.8 billion and $1.9 billion, respectively, but was not in the top three sectors, by either number of IPOs or dollar amount raised, in 2017.

The top IPOs by dollar value in each of the three top sectors in the first three quarters of 2017 were by Laureate Education Inc. (Consumer, Non-Cyclical sector, priced on January 31 and raised $490 million), Invitation Homes Inc. (Financial sector, priced on January 31 and raised $1.77 billion) and Silver Run Acquisition Corp. II (Diversified sector, priced on March 23 and raised $1.04 billion).

SPACs Are on the Offensive

US SPACs 2017

Thirty SPAC IPOs priced in 2017, the most SPAC IPOs since 43 SPAC IPOs priced in 2007. The 30 SPAC IPOs in 2017 raised a total of $9.2 billion, surpassing the $7.29 billion raised in 2007.

After the peak of 2007, the worst year for SPAC IPOs was 2009. SPAC IPOs have been on an upward trend since 2009 in both deal count and dollar amount raised.

The dollar amount raised by SPAC IPOs in 2017 jumped by 164 percent from 2016 ($3.48 billion) and by 136 percent from 2015 ($3.90 billion).

The three largest SPAC IPOs of 2017 were by Silver Run Acquisition Corp. II (priced on March 23 and raised $1.04 billion), Social Capital Hedosophia Holdings Corp. (priced on September 13 and raised $690 million) and TPG Pace Energy Holdings Corp. (priced on May 4 and raised $650 million).

In 2017, SPAC IPOs represented 13 percent of the total IPO market by deal count and 18 percent of the total IPO market by dollar amount raised.

Law Firm Performance

Cooley closed the most sector-specific deals (19 IPOs) in the Consumer, Non-Cyclical sector, in 2017 and raised a total of $1.96 billion. In the Diversified sector, Ellenoff Grossman & Schole led with 13 IPOs that raised a total of $2.73 billion, but Weil Gotshal & Manges participated in eight IPOs that totaled $4.24 billion. Skadden Arps Slate Meagher & Flom led the Financial sector with nine IPOs that raised a total of $1.52 billion, but Venable participated in seven IPOs that totaled $2.76 billion. The Industrial sector was dominated by Latham & Watkins, while the Technology sector was led by Goodwin Procter and Wilson Sonsini Goodrich & Rosati.

Goodwin Procter (advising the underwriters) and Cooley (advising the issuer), participated in the largest IPO of 2017, the Snap Inc. IPO, which priced on March 1 and raised $3.91 billion. Cooley also led the smaller ($1 - $100 million) market range with 15 IPOs.

With additional data analysis by Hussein Kohy.

For more information on U.S. and European IPO performance, Bloomberg Law subscribers can access the Quarterly IPO Market Update - U.S. and the Quarterly IPO Market Update - Europe in the Securities Practice Center.