Bumper IPOs stand out in Q1 2011 – AltAssets

Posted on April 7, 2011 by

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The first quarter of 2011 was dominated by some of the largest private equity-backed initial public offerings (IPOs) in history, according to the latest analysis by Ernst and Young.

Twenty private equity-backed listings raised $13.5bn during the quarter, compared to just $7.2bn generated by 27 deals in the same period of 2010.

This comes in spite of geopolitical volatility in the second half of the quarter, created by unrest in the Middle East and natural disaster in Japan.

Eight private equity-back companies postponed or cancelled IPOs in the quarter, four of them directly citing events in Japan.

Yet the record for the largest ever private equity IPO was broken twice in quick succession, with Houston-based oil pipeline operator Kinder Morgan raising $3.3bn on the New York Stock Exchange in February.

It held the title of the largest ever private equity-backed float for just a few weeks before HCA, the largest hospital operator in the US, raised $4.4bn in March. Media research business Nielsen also raked in $1.9bn at the end of January.

After a long period following the financial crisis when private equity firms struggled to exit their investments, many have judged that the public markets can now offer fair value for their portfolio companies.

Chip manufacturer Freescale Semiconductor, toy shop Toys ‘R’ Us and Dunkin’ Brands, parent of the donut chain, all look set to go public later in the year.

But this mini-boom is so far largely confined to the US, with emerging market stock markets remaining shaky. A month ago private equity giant Carlyle scrapped plans to list engineering business MMI Holdings in Singapore, citing market uncertainty.

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Posted in: USA