Yelp may have pulled off its public market debut amid great fanfare Friday. But it’ll take a lot more very active days for new offerings to winnow down the rest of the IPO pipeline, which is the fullest it’s been in several years.
Largely, that’s due to the fact that so many companies filed to go public in 2011, but didn’t actually make it to market. Last year, there were 274 companies that filed initial registration statements for U.S. offerings. Of those, 171 remained in the IPO pipeline as of year-end, according to a PwC report. And only a handful have made it out since.
In general, it’s taking companies longer to go public after initially filing for an IPO, says Bryan McLaughlin, partner in the transaction services group at PwC. Though bankers have typically told companies to expect a 60 to 90 day wait from filing to market debut, that’s no longer the norm.
“The volatility in the market and the complexity of the IPO market is causing companies to have extended timelines,” McLaughlin says. He expects that trend to continue and perhaps intensify this year, as pre-IPO companies and their underwriters adjust to the “new norm” for carrying out a public offering. That said, he isn’t predicting a large volume of companies withdrawing plans for an IPO. Rather, many of those who filed in 2011 will be making it to market this year.
Who’s in the pipeline? Several biofuel companies filed to public last year but have not yet carried out IPOs. They include Coskata and Macscoma, which are seeking $100 million each, and Fulcrum BioEnergy, which is seeking $115 million. Another cleantech company, solar thermal system developer BrightSource Energy, filed for a $250 million IPO last April. Software IPOs are also in waiting, including a planned $200 million offering from security application developer AVAST Software.
McLaughlin says he expects to see some strengthening in new issues volumes for the first half of this year. However, inbound calls indicate that there are also more new companies filing to go public or looking to do so.
That means that even if the pace of offerings picks up, the pipeline is likely to remain quite full.