2013 IPO outlook.

Author:Heffes, Ellen M.
Position::INITIAL PUBLIC OFFERINGS
 
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Capital markets executives at leading investment banks are projecting measured growth in initial public offerings (IPOs) on U.S. exchanges in 2013, as exactly half of the respondents to a new study by national accounting and consulting firm BDO USA LLP predict an increase in U.S. IPOs in the coming year. In the same survey, almost one-third (31 percent) of the respondents forecast activity as flat compared with 2012; just 18 percent expect a decrease in offerings on domestic exchanges.

Overall, bankers predict a 6 percent increase in the number of U.S. IPOs in 2013. They anticipate these offerings will average $250 million, which projects to $34 billion in total IPO proceeds on U.S. exchanges. This would represent an approximate 20 percent drop in proceeds from last year ($42.6 billion, according to Renaissance Capital).

But Jay Duke, a capital markets partner at BDO USA, notes that any comparison between 2012 numbers and 2013 projections needs to consider the impact of last year's $16 billion Facebook IPO. "More than a third of 2012 U.S. IPO proceeds were attributable to the Facebook offering," says Duke.

"If you remove that one deal, the bankers' projections for the coming year represent an approximate 28 percent increase in IPO proceeds on U.S. exchanges. Considering there are no mega deals currently on the horizon, the 2013 forecast represents pretty healthy growth."

Absent Facebook, the size of the average IPO in 2012 was considerably smaller than 2011 and capital...

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