Quarterly Recap: Warming Up

After several quarters of slump, 2016’s IPO market finally perked up a bit in the second quarter of 2016. And then just as we were gaining a little momentum, Brexit happened.

It will be a while before we know what impact England’s decision to leave the EU will have on the economy as a whole, or on the United States’ new issuance market, but rather than speculate on bad news, let’s focus on the good.

2015’s market slowdown left the year as the slowest since 2012, and the first quarter of 2016 carried over that lack of momentum, entering the second quarter with a mere six debuts for the year (all from healthcare). In our recap of the quarter, we wondered what the future would hold, and we weren’t optimistic.

Thankfully, we were wrong. Ish.

From Ipreo’s US New Issuance Quarterly Recap for Q2 2016: The IPO market gained momentum as 26 new issuers came to market for total proceeds of $5.9B, compared otjust six deals which came to market in Q! for proceeds of $569.6M. Although the IPO market was markedly up from the preivous quarter, it performed significantly worse than the analogous period of 2015, as Q2 2015 saw 62 deals come to market totalling $13.88B in proceeds.

So things have gotten a little bit better, but they still aren’t great. What hasn’t changed? Healthcare’s stranglehold on the IPO market, with the sector accounting for 11 of the quarter’s 26 deals (but only $1.0B in proceeds), the largest of which was Cotiviti Holdings, Inc., which brought in $237.5M. But the Consumer Services also made some noise, putting forth two of the three largest IPOs of the quarter.

Now the question is will this meager momentum continue? Hmm… the 6-month backlog doesn’t look promising, as only 29 IPOs are on track to land, bringing with them a mere $3.5B in proceeds. Last year at this point, 59 issuers were on the way, with $7.2B.

For more information on the quarter’s IPO activity, plus a recap of follow-on activity and industry highlights, read Ipreo’s full US New Issuance Quarterly Recap for Q2 2016.