A link to a PDF copy of Preqin’s YTD 2011 IPO report is available at the end of this entry.
“As market conditions have started to improve, private equity firms have been able to exit some of the investments made during the boom era. There have already been several notable private equity-backed buyout exits in 2011, and with numerous forthcoming proposed deals in the pipeline, 2011 looks set to be a record breaking year for these exits,” said Manuel Carvalho of Preqin. “However, investors are now more cautious about the level of leverage at which a company operates, with many now expecting the private equity company to hold stakes in the operating company and use the proceeds from the IPO to pay down debt. This could impact on the success of the IPOs of the more highly leveraged companies from which private equity firms are seeking to exit.”
Additional data points
• 145 IPOs and share sales with an aggregate value of $38.7 billion occurred in 2010. This is twice the aggregate value seen in 2009 and a 12-fold increase from 2008.
• 17% of private equity-backed exits in 2010 came from IPOs; this is a significant increase from 2008 when they accounted for 5%.
• PE-backed IPOs in 2010 surpassed pre-financial crisis era levels with a 12% and 29% increase in the number of PE backed flotations in comparison to 2006 and 2007, respectively.
• In 2011 to date there have been 11 IPO exits worth a collective $10.2 billion. This includes the refloating of Kinder Morgan earlier this month, only the second exit ever to raise over $2 billion. Shares were priced above the expected range due to strong demand.
• There is an abundance of forthcoming exits in the pipeline. HCA Inc. plans to price its IPO in the 2nd week of March. If it prices at the top of its expected range it will be the biggest PE-backed IPO in US history raising approximately $3.7 billion.
• Trade sales continue to dominate the exit market, accounting for 53% of exits in 2011 to date. Secondary Buyouts and restructurings account for the remaining 25% and 7% respectively.
For more detailed information, including data tables and statistics, please click HERE for a free copy of Preqin YTD 2011 IPO report.