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By Matthew Quinn
Following a miserable start to the year, the equity markets have become a lot more welcoming to initial share offerings in the past two quarters. The fourth quarter also got off to a roaring start.
A trio of diverse companies raised more than $1 billion this week each, making it the biggest week for IPOs in 18 months, according to Thomson Reuters.
Banco Santander raised $7.0 billion in an initial public offering in New York and Sao Paulo, marking the largest IPO by a Brazilian company on record and the second largest IPO this year. China State Construction Engineering raised $7.3 billion in July.
New Jersey-based insurance risk specialist Verisk Analytics sold 85.3 million shares at $22 each, raising $1.9 billion.
Casino operator Wynn Macau raised $1.6 billion in Hong Kong's second-largest IPO this year.
Year-to-date global initial public offerings total $59.4 billion, a 35 percent decline from the same period in 2008. Despite the flurry of recent offerings, nearly 80 percent of IPOs this year, by proceeds, have come from companies based in China, Brazil and the United States, Thomson data showed.
U.S. IPO volume appeared to "hit bottom" in the first quarter of 2009, according to a report released by PricewaterhouseCoopers' Transaction Services practice on Friday.
For the six months ended March 31, 2009, there were only five IPOs that raised $967 million, PwC said. However, deal volume picked up in the second quarter and continued to rise in the third. Deal sizes also started to increase, with Shanghai-based Shanda Games making the first offering of over $1 billion since the second quarter of 2008.
Overall, there were 20 IPOs that raised $5.8 billion in the third quarter, nearly quadruple the $1.5 billion raised in the third quarter of 2008, and almost double the number of IPOs listed in that quarter (11).
"We have witnessed a significant uptick in registration and pre-registration activity (e.g., banker pitches, financial sponsor interest in IPO readiness, CFO searches, etc.) and our call volume for IPO services is on a steady rise, thereby signaling a growing pipeline of deals," said Scott Gehsmann, a capital markets partner in PricewaterhouseCoopers' Transaction Services practice.
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