As recent headlines suggest, economic gloom and extreme volatility have taken their toll on the IPO market. In the month of August alone, 21 US companies nixed plans to go public, 11 of which officially withdrew their filings, the most to do so since the onslaught of the financial crisis. While the immediate effects of the capital market fallout have temporarily halted IPO issuance, behind-the-scenes data suggest a more encouraging outlook.
Deals continue to be completed at a healthy pace, with 96 IPO pricings so far this year, as compared with 87 as of early September 2010 and 31 during the entirety of 2008. Filing activity remains robust, reflecting a still sizeable backlog of private companies and, more importantly, a willingness to move forward in the IPO process. As a result, the US IPO pipeline has surpassed the 200-deal mark for the first time in over a decade. Though global turbulence has stymied IPO plans for some and mandated valuation adjustments for others, recent filing activity suggests going public remains a viable route for a large number of strong candidates, even if market choppiness persists. As such, we remain optimistic that deal flow will resume, characterized by a heightened focus on fast-growing companies with strong fundamentals.
Read our full report on the IPO Pipeline.
