Wednesday, November 6, 2013

IPO's Up, Mergers & Acquisitions Down

As equity prices have firmed, private companies have taken advantage of increased investor sentiment (or Fed balance sheet, whatever you want to call it) and have come to market with initial public offerings, a trend that will come to head later this week with the IPO of Twitter. Although companies have come to market, management teams sentiment toward mergers & acquisitions has waned. So far in 2013, Renaissance Capital data suggests 222 companies have held IPO's versus just 140 last year and 104 in 2008.

Annual Count of IPO's

Compare this to the annual count of mergers and acquisitions, which I compiled via Capital IQ. Following the bounce in the number deals following the 2008/2009 market bottom, the number of deals has tailed in 2013.

Annual Count of Mergers & Acquisitions

So as management teams have wanted to sell shares into the market, monetizing their equity, they have also (at least collectively) been reluctant to use their capital to make acquisitions.

No comments:

Post a Comment