IPO VIEW-2011 US IPO activity seen steady with bigger deals

* 2010 was highest volume year for U.S. IPO since 2007

* U.S. IPO activity seen flat to slightly up in 2011

* PE IPOs could cause rise in 2011 average U.S. IPO size

* 2010 U.S. IPO increases were off of weak 2008, 2009

By Clare Baldwin

NEW YORK, Dec 17 (BestGrowthStock) – More than twice as many
companies have gone public in the United States this year
compared with last year, suggesting that investors are edging
back into riskier assets.

Analysts and investors say overall IPO activity might not
show such increases next year — they see U.S. IPO volume flat
to slightly up. But the average U.S. IPO size could increase.

“The level of activity that we have seen in 2010 is more of
an indicator of an IPO market that has worked its way out of a
trough as opposed to the complete recovery,” said Scott
Gehsmann, a capital markets partner at PricewaterhouseCoopers.

This year, the November IPO of top U.S. automaker General
Motors Co (GM.N: ), which raised $23.1 billion including common
and preferred shares and the overallotments, set a record —
but most IPOs were much smaller.

The second-biggest U.S. IPO of the year was Swift
Transportation (SWFT.N: ), which raised $806.3 million. The
average U.S. IPO size in 2010 — including GM — was $243.9
million, according to the PwC data.

That could change in 2011. Even without a mega-IPO like GM,
there are a handful of large, private equity-backed companies
on file with U.S. regulators for IPOs that could come to market
in 2011.

Hospital operator HCA Inc has filed to raise up to $4.6
billion. Nielsen Holdings BV, best known for viewership ratings
which often determine the fate of TV shows, hopes to raise
around $2 billion. Toys R Us Inc [TOY.UL] has filed to raise up
to $800 million.

Bankers who bring such deals to market say there are more
large, buyout-backed companies that have yet to file but are
expected to debut next year.

As of Thursday, 159 companies had raised $38.8 billion in
the United States, making 2010 the biggest by volume for the
U.S. market since 2007, according to data from PwC.

“With interest rates being so low there are few places you
can go to drive returns,” said Gehsmann. “While putting money
in index funds is nice and maybe safe, investors are looking
for incremental returns.”

Bankers and analysts say there is no “normal” for the U.S.
IPO market — but 2008 and 2009 were particularly weak.

There were only 57 IPOs in 2008 and 69 in 2009, compared
with 296 in 2007.

Plummeting stock markets and widening credit spreads in
2008 and 2009 spooked investors and drove many to the security
of cash and government bonds. It was only in the second half of
2009 that they returned to buying equities. IPOs, which are
considered among the riskiest equity investments, were slow.

“It’s hard to say (how much things have improved) because
the comparisons are so easy,” said Jack Ablin, who helps
oversee $55 billion as chief investment officer of Harris
Private Bank.

“By sheer number we’ve got a much more favorable
environment for IPOs — it’s not only availability of credit
but investors’ willingness to buy into the future,” Ablin
said.
(Reporting by Clare Baldwin; Additional reporting by Elinor
Comlay; Editing by Richard Chang)

IPO VIEW-2011 US IPO activity seen steady with bigger deals