The IPO Journal
Subscribe to all posts by Proskauer Capital Markets

Snap is a Big Deal

Will the Snap IPO open the door to more mega-IPOs in 2017? Proskauer’s annual IPO Study found the past two years have been quiet for mega-IPOs with a decrease in average base deal size but looks ahead for an increase …

2017 IPO Study: Executive Summary

Welcome to this fourth edition of Proskauer’s IPO Study. In it you will find our analysis of market practices and trends for U.S.-listed initial public offerings (IPOs). Our proprietary database and analyses now cover 376 IPOs that priced between …

2017 Overview: Methodology

Population

  • Our proprietary database now includes 376 IPOs that priced from 2013 to 2016.
  • The criteria for our study include:
    • Listing on a U.S. exchange and
    • Minimum initial base deal of $50 million in first public filing.
  • The total population

2017 Overview: Sector & Geographic Analysis

Sectors Represented

  • The number of IPOs per sector is proportional to the industry composition for all IPOs in 2016 that met our criteria.

17-Page-9-Sectors-Represented

Geographic Distribution

  • We analyzed the geographic distribution of IPOs by surveying the location of issuers’ headquarters.
  • Our

2017 Overview: Market Analysis

Deal Execution, Over-Allotment Option and Exchange Listing

  • Out of 67 IPOs in our study, six (9%) priced in Q1, 24 (36%) priced in Q2, 20 (30%) priced in Q3 and 17 (25%) priced in Q4.

17-Page-10-ipos-by-quarter

 

  • The over-allotment option was

2017 Overview: JOBS and FAST Acts: Overview

Emerging Growth Companies (EGCs)

  • The Jumpstart Our Business Startups (JOBS) Act became effective April 5, 2012.
    • The law created a new class of issuers called Emerging Growth Companies (EGCs), and provides flexibility for EGCs pursuing IPOs.
  • EGCs are issuers with

2017 Overview: Time to IPO

Time to IPO*

  • On average, EGCs that made a confidential submission publicly filed 151 days after their first confidential submission and priced 80 days after their first public filing.

17-Page-14-avg-number-of-days-from-first-submission-filing-to-pricing

 

17-Page-fourteen-avg-number-of-days-from-first-submission-filing-to-pricingB

*Excludes one prior SEC-reviewed issuer and two IPOs with confidential

2017 Overview: Testing-the-Waters

Testing-the-Waters*

  • Out of the 52 EGCs, 12 (23%) reported to the SEC that they engaged in testing-the-waters.
  • Of the 12 EGCs, all were in health care and TMT.

17-Page-fifteen-pricing-v-range

*The JOBS Act permits EGCs to engage in testing-the-waters with institutional investors

2017 Overview: Accounting/Internal Controls

Overview

  • Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers collectively audited 91% of the IPOs reviewed for this study.
  • Other auditors included Grant Thornton and RSM.

Analysis

  • Of the 67 IPOs:
    • Eight (12%) had a going-concern qualification.
      • Six of these eight

2017 Overview: Flash Results

Flash Results

  • “Flash results” refer to estimated financial results for a recently completed fiscal period before completefinancial statements are available. They are typically presented as ranges, and often only cover select financial line items or operating metrics. They are not

2017 Overview: Revenue

Revenue

  • Five of 67 (7%) IPOs were by pre-revenue issuers.
    • All five were biotech/biopharm issuers.
    • Revenue generating issuers priced below the range more frequently than pre-revenue issuers, but outperformed pre-revenue issuers in the first 90 days after pricing.

 

17-Page-18-aftermarket-performance

 …

2017 Overview: Net Income/Loss

Net Income/Loss

  • 38 of 67 (57%) issuers disclosed a net loss in their most recent audited fiscal year.
  • 17 of these 38 (45%) were biotech/biopharm issuers and 13 of these 38 (34%) were in the TMT sector.

17-Page-19-pricing-v-range

 

17-Page-19-aftermarket-performance

 

*Only

2017 Overview: Adjusted EBITDA & Operating Metrics

Adjusted EBITDA

  • In addition to financial measures calculated in accordance with Generally Accepted Accounting Principles (GAAP), many issuers disclose non-GAAP financial measures, such as Adjusted EBITDA.
    • 32 of 67 (48%) issuers disclosed Adjusted EBITDA.
      • 28 of these 32 (88%) issuers

2017 Overview: Pro Forma Financial Statements

Pro Forma Financial Statements

  • Under Regulation S-X, the SEC requires issuers that have made a significant business acquisition or for whom a significant business acquisition is probable to include standalone pro forma financial statements giving effect to the transaction.* Significance
LexBlog