After a strong finish in the last quarter of 2013, global technology IPOs above US$40mn kept the momentum alive with total issues of US$6.8bn from 26 IPOs in Q1 2014. Total proceeds grew by 298% in value over Q1 2013 (US$1.7bn) and by 160% in volume (10 deals). Compared to Q4 2013, total proceeds and volume increased by 22% and 4%, respectively. The month of January witnessed 11 IPOs*, raising US$898mn or 13% of the total proceeds, followed by February witnessing flat activity with only two deals raising US$286mn or 4% of total proceeds. The first quarter ended with the highest number of IPOs (13) and the highest proceeds at US$5.6bn (83%) in March. The high value of proceeds in March was fuelled by the Japan Display IPO, which raised US$3.1bn.
From a macroeconomic perspective, rising investor confidence during the months of January and March, as indicated by the downtrend in VIX (Volatility Index), resulted in more IPOs than February, as the Ukraine conflict possibly dampened investor confidence during the month. IPOs from China and Japan were strong contributors during Q1 2014.
In Q1 2014, the Computer Storage & Peripherals subsector raised the highest proceeds (US$3.8bn) representing 55% of total proceeds through the two largest deals in the quarter. Japan Display, Inc. and Hitachi Maxell Ltd., both from Japan, raised US$3.1bn and US$706mn, respectively. In Q4 2013 the sector recorded four deals raising US$527mn and in Q3 2013 it had one deal worth US$162mn.
Internet Software & Services contributed 26% (US$1.8bn) to total Q1 proceeds and 42% (11) to the total deals. The sector had the highest number of deals and proceeds raised in the last two quarters of 2013. The average deal size of the 11 IPOs in the sector was US$161mn, with nine IPOs from US-domiciled companies and one each from Ireland and China.
The geographic distribution of technology IPOs in Q1 2014 was spread across the four nations of US, China, Japan and Ireland. The US and China recorded the most activity with 46% (12) and 42% (11) of total deals, respectively.
However, proceeds raised were highly skewed towards Japan, which posted two of the largest IPOs globally in the quarter, raising a total of US$3.7bn or 55% of total proceeds. The US posted US$1.5bn or 23% of total proceeds; followed by China which raised US$987mn or 14% in Q1 2014. Ireland stood alone with one big-ticket, cross-border IPO worth US$500mn contributing 7%.
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