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Capital raised by US IPOs reaches highest level since 200031/01/2007. Source: Ernst & Young .
 United States issuers lead record global IPO activity in 2006 according to Ernst & Young. The figures represent the most amount of capital raised by US domiciled companies since 2000, when $59bn was raised in 338 IPOs during an 11-month period.
In a record year for global IPO activity, US-based companies generated the largest number of IPOs (186) during the first 11 months of the year, and raised the second-largest amount of proceeds ($34.2 billion) - up 14% from $29.9 billion through November 2005, according to data released by the global Ernst & Young organization.
This represents the most amount of capital raised by U.S. domiciled companies since 2000, when $59 billion was raised in 338 IPOs during the same 11-month period.
"U.S. issuers continue to find an eager and receptive marketplace among investors for IPOs," said Maria Pinelli, Americas Strategic Growth Markets Leader at Ernst & Young LLP. "Deal activity in the United States during the fourth quarter of 2006 was especially strong and consistent with the equity markets crossing all-time highs."
The median deal size for U.S. companies totaled $96 million -- up 9% from 2005, and the average deal size equaled $184 million -- up 13% from last year. The five largest U.S. IPOs in 2006 all raised in excess of $1 billion-they include MasterCard Inc. ($2.5 billion), Spirit Aerosystems Holdings Inc. ($1.6 billion), Hertz Global Holdings Inc. ($1.3 billion), SAIC Inc. ($1.2 billion), and Warner Chilcott Ltd. ($1.0 billion).
Nearly one-third (30%) of all U.S. domiciled IPOs in 2006 were venture- backed, which underscores the role of the U.S. venture capital industry in providing companies with the resources needed to reach the public markets.
The financial services (45 IPOs), healthcare (34), and energy and power (26) industries generated the most deal activity in the U.S. in 2006. Consumer products and services ($6.9 billion raised), energy and power ($6.7 billion), and financial services ($5.5 billion) were the top sectors in total capital raised.
Robust Pipeline Points To Continued Strength
"As of December 1, the pipeline of U.S. IPO candidates was extremely strong - 114 companies have filed to raise over $21 billion," Pinelli said. "That's more than half of what was raised in all of 2006. Technology is the most active pipeline sector with 18 IPOs in registration, followed by oil and gas and pharmaceuticals. Given this pipeline, the outlook for 2007 is very promising."
Record IPO Activity Across The Globe
Global IPO activity soared to a record high in 2006. From January through November 2006, $227 billion was raised in 1,559 IPOs - a significant increase from the $167 billion raised in the whole of 2005.
As in 2005, the increase in capital raised was led by large deals, and 2006 saw the biggest IPO ever with the listing of ICBC on Hong Kong and Shanghai exchanges, raising almost $22 billion alone. In second and third place came the IPOs for Bank of China Ltd and Rosneft with each raising more than $10 billion, beating last year's most significant IPO for China Construction Bank ($9.2 billion). Four out of the top 10, and six out of the top 20, deals were from four countries - China, India, Russia, and Kazakhstan.
"The capital markets continued to globalize in 2006," said Gregory K. Ericksen, Ernst & Young's Global Vice Chair Strategic Growth Markets. "We've seen an increase in cross-border listings and stronger competition between exchanges, creating more options than ever for both investors and companies looking to go public."
The top two Chinese deals, which were both state-owned, combined to raise $33 billion and meant that China domiciled companies raised the largest amount of proceeds globally ($45.5 billion).
Globally, technology, materials, financial services, and consumer products and services produced the highest number of deals in 2006, and energy and power as well as financial services dominated the top 20 IPOs by capital raised.
"2006 was definitely the year for emerging markets. We expect they will continue to lead the way in 2007. The investment and business opportunities this will create will have a ripple effect throughout the world," concluded Ericksen.
Ernst & Young, a global leader in professional services, is committed to restoring the public's trust in professional services firms and in the quality of financial reporting. Its 106,000 people in 140 countries around the globe pursue the highest levels of integrity, quality, and professionalism to provide clients with solutions based on financial, transactional, and risk-management knowledge in Ernst & Young's core services of Audit, Tax, and Transaction Advisory Services. Further information about Ernst & Young and its approach to a variety of business issues can be found at www.ey.com/perspectives.
Stats note: Data provided by Ernst & Young, Dealogic, and Thomson Financial. The IPOs by KKR Private Equity Investors LP ($5 billion raised) and Apollo Alternative Assets LP ($1.5 billion raised) are not included in the totals, as they are not operating companies.
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