Q3 2017 IPO Recap

Three quarters down, one to go. How is the IPO market faring as we enter the year’s home stretch?

The third quarter of the year is in a tough spot, having the hard luck of being home to the summer swoon that typically drowns August in a dog-day drought. As we discussed last month, 2017’s late summer slump spread into September, with a four-week streak of no IPOs hitting the market stretching all the way up past the start of the NFL season and nearly into fall itself.

Thankfully, the ship righted itself in the last two weeks of the quarter, so despite the month’s rocky start,  September recovered with a decent 14 debuts for $2.5B in total proceeds. The month’s totals marked the third straight month of declines in deal count and proceeds, but the late surge at least positioned 2017 ahead of 2016 at the same point last year.

Despite those four weeks of nothing causing the IPO market to taper off to Q3’s 26 IPOs for $4.3B, down from Q2’s 48 new issuers for $10.9B, the last three months pushed 2017’s total year-to-date IPO deal count to 96. That number marks a slight increase from 2016’s total of 88 IPOs.

Healthcare led the way, with the sector bringing in 11 of the quarter’s 26 IPOs for $13.2B in total proceeds, but the Basic Materials space had the two largest offerings during the period as Venator Materials PLC and PQ Group Holdings, Inc. raised $522.1M and $ 507.5M, respectively. Healthcare may remain at the top of the deal count list, but the sector’s fortunes have been steadily declining since its peak in 2014, when it produced 102 market debuts.

The Ipreo Quarterly US New Issuance Recap Q3 2017 takes a deeper dive into the sector’s decline:

Looking at third-quarter performance as compared to 2014, the Healthcare IPO market has witnessed a steep decline, descending 60.7% and 63.7% in terms of deal count and proceeds, respectively. While Healthcare IPO deal activity has fallen in recent years, overall annual deal count has been above average when considering 2004-to-date. Looking at 2017 year-to-date, only 13.5% of Healthcare deals have come in IPO form.

There are three months left of what’s been a tumultuous year, and we’re continuing to keep an eye on what’s been a fairly an unpredictable market. For a comprehensive look into all of the third quarter’s activity, including a glimpse at the current 6-month backlog, click through to our Ipreo Quarterly US New Issuance Recap Q3 2017.