The IPO market is picking up steam, and the momentum is being greatly fueled by a variety of companies who see the public market as the only way to raise money as credit has been tight and strategics have been slow to make acquisitions.
On Thursday, two companies went public -- Hyatt Hotels Corp. (NYSE:H) and Ancestry.com Inc.(NASDAQ:ACOM) -- and five more IPOs are expected in the next two weeks, according to Renaissance Capital. So what types of companies, specifically, are planning to join the growing wave to go public in the near term?
Robert H. McCooey, Jr. -- senior vice president of New Listings and Capital Markets, Nasdaq OMX Group Inc. (NASDAQ:NDAQ) -- said at The Deal's Winning Exit Strategies Webinar on Thursday he sees four main groups pushing to go public:
- Global companies, especially Chinese firms. McCooey points out that 22 Chinese companies went public this year, eight on the Nasdaq. Overall, 123 Chinese-based companies are listed on the Nasdaq compared to just 50 two years ago.
- Technology companies with a specialty in digital and social media. Ancestry.com is one example.
- Companies in the portfolio of private equity firms and venture-backed firms. The reason? The strategics aren't out there right now to acquire these portfolio companies, and available credit for these firms to expand is tight. "You have this window available [for IPOs], and companies are certainly driving through it very quickly," McCooey said.
- Alternative energy companies.
Jay Duke, partner and co-chair of the BDO Capital Markets Working Group BDO Seidman LLP, agrees with McCooey on the types of companies that are preparing to go public, but he adds in general: "Typically, what you're seeing is companies that are a little but more stable, a little more mature and profitable is the key."
To listen in on a replay of The Deal's Webinar, Winning Exit Strategies, please click here. - Gerald Magpily
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