Legal experts in the US are predicting another turbulent year for the US IPO market, but the prospects are good for PE backed companies. PE-backed companies are expected to dominate the US-based IPO landscape in 2012, according to 84 percent of attorneys surveyed by KCSA.
“The pipeline of private equity backed IPOs remains robust and we anticipate seeing continued strong activity from this group of issuers as sponsors look for exit opportunities for their investments,” noted Craig Marcus, Partner, Ropes & Gray LLP. The report also said that a European economic recovery would contribute positively to the recovery of the IPO market in the US.
Key survey results
- 92 percent of securities attorneys think the IPO market in 2012 will be relatively flat when compared with 2011
- 93 percent of the lawyers surveyed believe the most anticipated IPO in 2012 will be Facebook.
- Although many of the attorneys expressed concerns that the IPO market may be experiencing a social media bubble, 72 percent said that Groupon was last year’s most anticipated IPOs.
- 84 percent say there is strong demand for foreign companies to access U.S. capital markets and list on the major U.S. exchanges.
- There was a 22 percent drop off in positive sentiment toward Chinese-based company issuances, due to concerns about corporate governance. But 78% of respondents named China as a continuing strong driver of U.S.-based IPO issuance in 2012 versus 100 percent in the 2011 survey.
- Attorneys who were surveyed are seeing some novel deal structures to get offerings into the market including: UP-C (14%); UP-REIT (14%); Dual class share offerings (32%).
KCSA Strategic Communications, is an integrated communications firm specializing in financial public relations, investor relations, social media and creative marketing services. It conducted an in-depth survey of 50 securities attorneys whose firms advised on 70 percent of the initial public offerings listed on major U.S. exchanges during 2011.