Private Equity, Public Exits Q2 2017

2017 is on pace to surpass 2016 global IPO levels. The global IPO pipeline is building as steady global growth, improving economic fundamentals, record high equity markets and a positive global outlook offset challenges from geopolitical uncertainty, including upcoming EU elections, regional disputes and favorable private financing markets.

PE firms are gaining confidence in IPO exits with markets characterized by ample liquidity, an ability to sustain gains and muted volatility.

Asia-Pacific and Americas continued to attract the most PE-backed IPOs proceeds. Technology, real estate and consumer products led PE-backed IPOs in H1 2017, while real estate, oil and gas, and diversified industrial products companies attracted the most money.

EY - Strong momentum of PE-backed IPOs from 1Q 2017 carried into 2Q 2017

Strong momentum of PE-backed IPOs from 1Q 2017 carried into 2Q 2017

Strong momentum from 1Q 2017 carried into 2Q 2017 as 36 PE-backed companies raised US$13b, a 6% increase from 2Q 2016. Through H1 2017, PE-backed companies raised 52% more proceeds and 36% more deals, compared with H1 2016.

 

The average PE-backed IPO size has gradually increased over the past decade but has remained range-bound over the past few years

EY - 12-month rolling average size (US$m)

 

Top 10 PE-backed IPOs

Most of the top 10 PE-backed IPOs this year occurred in 2Q 2017, accounting for almost half (48%) of proceeds raised through H1 2017.

EY - Top 10 PE-backed IPOs

 

Follow-on activity has rebounded

PE follow-on activity increased in H1 2017 to US$54.9b, an increase of 24% from last year.

EY - Follow-on activity has rebounded

 

Percentage of total IPO market that PE represents

While PE-backed deals have declined as a percentage of the overall IPO market from their highs in 2014, PE still represents a critical pillar of the IPO market, account for a quarter (25%) of IPO proceeds in H1 2017.

EY - Percentage of total IPO market that PE represents

 

EY - Relative PE-backed IPO proceeds by region

Americas and Asia-Pacific continue to attract PE-backed IPOs in 2Q 2017

Americas and Asia-Pacific PE-backed IPO proceeds increased 250% and 179% respectively, while EMEA declined 35% since H1 2016.

 

Pipeline strong for 2017

70

companies could raise more than US$11b in proceeds

The outlook for the balance of the year is strong. There are currently more than 70 PE-backed companies in registration that, in the aggregate, could raise more than US$11b in total proceeds.

 

PE-backed IPO activity by sector

Technology, real estate and consumer products led PE-backed IPO deals in H1 2017, while real estate, oil and gas, and diversified industrial products sectors attracted the most money.

Sector

Deals

Technology

9

Real estate

8

Consumer products

8

Life sciences

6

Oil and gas

5

Sector

Proceeds (US$m)

Real estate

$4,050

Oil and gas

$2,476

Diversified industrial products

$2,362

Media and entertainment

$2,275

Technology

$2,247