Fresh off Reuters. Good news in a Tiger year : ) to come: NEW YORK (Reuters) - The market for initial public offerings started 2010 with some hesitation, but a promising pipeline of IPOs offers a glimmer of hope for the coming months, bankers and investors say. Many of the strongest companies are still auditing their 2009 financial statements and putting together paperwork for the U.S. Securities and Exchange Commission, they said. "The real evidence of this will not be until May, June, July but the drumbeats will get louder and louder along the way. The lag is the filing procedures," Deutsche Bank Global Co-Head of Equity Capital Markets Mark Hantho said in an interview with Reuters. "The quality of the backlog is the best I have seen in a while." He said the backlog was across sectors. Last year, 63 U.S.-based IPOs raised about $21.9 billion, according to data from Renaissance Capital. The firm says 2010 could see upwards of 100 IPOs and proceeds exceeding $40 billion. But to date in 2010, a number of IPOs have slashed their size and expected price range and several have shelved their deals. Analysts say the deals have been overvalued and not particularly strong. Even stronger deals could have trouble getting off the ground: The Standard & Poor's 500 Index .SPX closed out its worst month in almost a year. It fell 3.7 percent in January and is off nearly 7 percent from its high this month. Christopher Turner, managing director of private equity firm Warburg Pincus, said he is cautiously optimistic. Speaking at a conference organized this week by Connecticut-based IPO research firm Renaissance Capital, Turner said the IPO market is opportunistic and uncertain. Buyers want cheap growth, are unwilling to tolerate any financial risk, and are extremely price sensitive. "We're not at all telling ourselves or telling our investors 'Oh yeah, slam dunk, we're going to get XYZ out there in the first half of this year or the second half,' because there are no slam dunks right now in this IPO market. ... I don't think the desired profile of what the IPO investor wants is clear," he said. But Turner, whose Capital Markets Group manages about $20 billion in debt and equity financing, added that the IPO market is far below where it has been historically. He said that over the past 20 years in the United States, there have been an average of 200 deals a year raising about $30 billion in capital, implying a significant upside for the market. "The market is stumbling a bit, trying to find its footing. It doesn't need a rising equity market, it just needs a stable one," said Renaissance analyst Paul Bard. "There is a large supply of private companies ... waiting in the wings. It's just a question of the pace with which they will come." ON DECK Ironwood Pharmaceuticals Inc (IRWD.O), hoping to raise about $250 million at the midpoint, is the biggest deal on the calendar for next week. The drug company could do well if it gets regulatory approval for a drug in clinical development, but the IPO may not be strong enough to tempt investors in the current environment, said IPO Boutique Senior Managing Partner Scott Sweet. Ironwood, which hopes to raise $250 million, has partnerships with Forest Laboratories Inc (FRX.N) and Almirall SA (ALM.MC), but has reported losses each year since it was founded in 1998 and has not yet brought a drug to market. Also expected next week are adult-themed social networking website operator FriendFinder Networks Inc (FFN.N), hoping to raise about $220 million; workers compensation insurance and claims services company Patriot Risk Management Inc (PRMI.O) which hopes to raise about $187 million; boutique investment bank Imperial Capital Group Inc (ICG.N) which hopes to raise about $106.7 million; and West-Hollywood-based movie finance and production company Film Department Holdings Inc (TFD.O), which hopes to raise about $85 million. (Reporting by Clare Baldwin in New York; Editing by Richard Chang)
NEW YORK (Reuters) - The market for initial public offerings started 2010 with some hesitation, but a promising pipeline of IPOs offers a glimmer of hope for the coming months, bankers and investors say.
Many of the strongest companies are still auditing their 2009 financial statements and putting together paperwork for the U.S. Securities and Exchange Commission, they said.
"The real evidence of this will not be until May, June, July but the drumbeats will get louder and louder along the way. The lag is the filing procedures," Deutsche Bank Global Co-Head of Equity Capital Markets Mark Hantho said in an interview with Reuters. "The quality of the backlog is the best I have seen in a while."
He said the backlog was across sectors.
Last year, 63 U.S.-based IPOs raised about $21.9 billion, according to data from Renaissance Capital. The firm says 2010 could see upwards of 100 IPOs and proceeds exceeding $40 billion.
But to date in 2010, a number of IPOs have slashed their size and expected price range and several have shelved their deals. Analysts say the deals have been overvalued and not particularly strong.
Even stronger deals could have trouble getting off the ground: The Standard & Poor's 500 Index .SPX closed out its worst month in almost a year. It fell 3.7 percent in January and is off nearly 7 percent from its high this month.
Christopher Turner, managing director of private equity firm Warburg Pincus, said he is cautiously optimistic.
Speaking at a conference organized this week by Connecticut-based IPO research firm Renaissance Capital, Turner said the IPO market is opportunistic and uncertain. Buyers want cheap growth, are unwilling to tolerate any financial risk, and are extremely price sensitive.
"We're not at all telling ourselves or telling our investors 'Oh yeah, slam dunk, we're going to get XYZ out there in the first half of this year or the second half,' because there are no slam dunks right now in this IPO market. ... I don't think the desired profile of what the IPO investor wants is clear," he said.
But Turner, whose Capital Markets Group manages about $20 billion in debt and equity financing, added that the IPO market is far below where it has been historically. He said that over the past 20 years in the United States, there have been an average of 200 deals a year raising about $30 billion in capital, implying a significant upside for the market.
"The market is stumbling a bit, trying to find its footing. It doesn't need a rising equity market, it just needs a stable one," said Renaissance analyst Paul Bard. "There is a large supply of private companies ... waiting in the wings. It's just a question of the pace with which they will come."
ON DECK
Ironwood Pharmaceuticals Inc (IRWD.O), hoping to raise about $250 million at the midpoint, is the biggest deal on the calendar for next week. The drug company could do well if it gets regulatory approval for a drug in clinical development, but the IPO may not be strong enough to tempt investors in the current environment, said IPO Boutique Senior Managing Partner Scott Sweet.
Ironwood, which hopes to raise $250 million, has partnerships with Forest Laboratories Inc (FRX.N) and Almirall SA (ALM.MC), but has reported losses each year since it was founded in 1998 and has not yet brought a drug to market.
Also expected next week are adult-themed social networking website operator FriendFinder Networks Inc (FFN.N), hoping to raise about $220 million; workers compensation insurance and claims services company Patriot Risk Management Inc (PRMI.O) which hopes to raise about $187 million; boutique investment bank Imperial Capital Group Inc (ICG.N) which hopes to raise about $106.7 million; and West-Hollywood-based movie finance and production company Film Department Holdings Inc (TFD.O), which hopes to raise about $85 million.
(Reporting by Clare Baldwin in New York; Editing by Richard Chang)
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