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Ernst & Young: U.S. IPO Calendar is Light for Q4

By Rob Starr, Content Manager,

“Despite so many challenges this year, including the U.S. election, continued uncertainties around the global marketplace, and turmoil over the US Fiscal Cliff, 2012 will go down in the books as a solid year for IPOs, and much stronger than 2011,” said Herb Engert, Strategic Growth Markets Practice Leader for Ernst & Young LLP, @HerbEngert. “I see uncertainty continuing to hold us back slightly, but I do think IPOs will rebound in 2013 after a slow few months ahead.”

These comments come after Ernst & Young’s U.S. IPO Pipeline Analysis. was recently released. It showed December is on track to have its slowest month since 2008.

Private equity has remained stable amidst corporate decline and saw a considerable improvement in exits, both through M&A and IPO. PE firms are sitting on more than $360 billion in “dry powder” to deploy, but there is a shortage of quality assets and a noticeable gap between buyer and seller price expectations, which have constrained activity. As a result, buyout firms have struggled to attain a consistent level of activity. Fundraising has been fairly active in 2012, and PE activity is expected to continue momentum and remain consistent with 2012.

“We expect 2013 to be on par with 2012 in terms of deal size, and the sectors that will be in play,” said Jackie Kelley, Americas IPO Leader, for the Ernst & Young organization. “Resolution on the Fiscal Cliff and a strong retail season could drive a boost in the pipeline late in the quarter and early into 2013.”

“A trend we will continue to see in Q4 is companies pursuing a follow-on offering, looking to raise capital. This will challenge the IPO market going forward as new companies in the pipeline will compete for attention and capital with companies that already have a proven track record,” concluded Kelley.

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