Mid-sized IPOs missing from US rebound

Of the 76 US IPOs so far this year, deals raising between US$100mil and USS$500mil accounted for roughly 29% of the overall volume. — Reuters

NEW YORK: The recovery in the US initial public offerings (IPOs) market is underway, with deal volumes growing year-on-year and sentiment improving.

Yet one key element of an upswing is noticeably absent: mid-sized deals.

Of the 76 US IPOs so far this year, deals raising between US$100mil and USS$500mil accounted for roughly 29% of the overall volume.

That’s significantly lower than the 50% average during the past decade, the data showed.

“Usually when things are reopening, you start to see some of the larger private companies test the market first before it migrates down to smaller cap issuers,” said Daniel Polsky, William Blair & Co’s co-head of syndicate.

Just a dozen offerings of US$500mil or more accounted for around 67% of the US$16.8bil raised in US first-time share sales so far this year.

With a pipeline flush with large, attractive candidates following a two-year malaise for the US IPO market, smaller firms may be waiting for the field to clear. — Bloomberg