Overview
There were 13 initial public offerings in U.S. markets between January 1, 2016 and March 31, 2016, which raised a total of $2.9 billion. That is considerably lower than the $7.9 billion raised by 44 IPOs last quarter.
IPOs have been trending downward for a couple years now. All told, IPO activity in the first quarter of the year is down 70% from Q1 2015 and 83% from Q1 2014, marking the lowest point in the IPO market since 2009.
Industry Analysis
Perhaps it’s a sign of the IPO slowdown that the largest offering during the quarter belongs to a frozen food manufacturer. Normally we’ll see a technology or pharmaceutical company raise the most money, but this quarter the top spot went to Nomad Foods (NYSE: NOMD), which raised $1.7 billion, almost 60% of the total proceeds from all IPOs. (It wasn’t even really an IPO, in the sense that it wasn’t the company’s initial public offering. It was just switching its listing from the LSE to the NYSE.)
Pharma and Biotech companies accounted for more than half (seven) of the number of IPOs, but did not raise much money. The second largest offering during the period was that of Silver Run Acquisition Corp. The investment vehicle focused on oil & gas assets raised $450 million through its offering.
Unusually, there wasn’t a single non-medical tech listing during the quarter.
Auditor Market Share
PwC and EY led the way this quarter with five and three IPOs, respectively, totaling 61% of the market.
Auditor market share for 13 #IPOs in Q1 2016: PwC (38%), EY (23%), Deloitte, CohnReznick, KLJ, Marcum, and WithumSmith+Brown all w/1 (8%).
— Audit Analytics (@AuditAnalytics) April 28, 2016
Emerging Growth Companies
12 of the 13 IPO companies last quarter elected to register as emerging growth companies, which remains a popular option for most newly-listed companies. The only company that did not register as an EGC was Nomad Foods.
Conclusion
Although the first quarter IPO activity was the slowest it has been in over 5 years, it is expected to pick up during the second quarter.