The healthcare and technology sectors led a 2014 surge in IPOs in the US as investors in a low-interest-rate environment chased maximum returns via new equity issues in potentially high-growth industries.
The healthcare sector accounts for 39 percent of the 288 IPOs registered in 2014, as of December 4, making it the most popular sector for offerings, PwC says in its quarterly IPO Watch report. The technology sector posted the highest proceeds raised over the year, accounting for $31.5 bn of the total $83.9 bn raised.
Overall, the US IPO market surged 47 percent in 2014 compared with the previous year in terms of value, and increased 21 percent in terms of number of offerings, making it the busiest year for listings in seven years. The overall value of proceeds raised in 2014 was boosted by the largest-ever IPO, in which Alibaba raised $25 bn.
‘Multiple sectors performed well, with overall year-to-date volume led by IPOs in healthcare and technology, as investors searched for strong growth opportunities,’ says Henri Leveque, partner for US capital markets in PwC’s deal practice. ‘US companies took advantage of the continued low-interest-rate environment and strong investor appetite for higher-return investments in new equity issues.’
IPO issuance slowed somewhat in the fourth quarter, with a total of 60 offerings as of December 4; that compares with 77 in the fourth quarter of last year. At the same time, the overall value fell to $13.4 bn from $24 bn as tech sector issuance dropped to $974 mn from $4.3 bn.
Leveque predicts continued strength in the US IPO market next year, however, including a possible increase in spin-off listings. ‘Combined with a robust pipeline of upcoming IPOs and strong levels of interest from private companies driving filing activity, IPOs will likely continue to attract investor interest in 2015,’ he says in a press release.
