Global Technology IPO Review: Q2 2014

Global Technology IPO Review: Q2 2014

Q2 results

Global technology IPO activity, which took off in the last quarter of 2013 continued and gained speed in Q2’14. The technology sector surpassed expectations in the second quarter, with 40 IPOs and US$12.1bn in proceeds. Compared to the 17 deals in Q2’13, the number of Q2’14 deals increased by 135% and total proceeds grew by 322% (Q2’13 = US$2.9bn). The number of technology IPOs increased 54% over the prior quarter and the average issue size also moved higher (US$303.0mn versus US$263.0mn). An improving Eurozone led to the return of technology IPOs in Europe with listings on the London Stock Exchange (LSE) and one on Euronext in Paris.

IPO summary - Top 10 deals
IPO summary - Top 10 deals
 

Subsector distribution

In Q2’14, the Internet Software & Services sector had the most IPOs (20) with proceeds of US$5.1bn; followed by 11 IPOs in the Software sector which raised US$3.1bn. Increasing Internet penetration, growing Ecommerce and rebounding consumer demand in the developing economies, and the shift from product to service across industry as a whole, is resulting in accelerating demand for Internet and software innovations.

The Semiconductor subsector had two IPOs which raised US$315mn, a 28% increase in amount raised quarter over quarter with the same number of deals. There were no semiconductor IPOs in Q2’13 due in large part to the China IPO freeze. Of the two semiconductor IPOs this quarter, one was from US and the other was a Chinese company.

Sector distribution  

The geographic distribution of technology IPOs in Q2’14 was spread across 10 nations with the US, China and UK leading the way. The US and China recorded the most activity with 35% (14) and 33% (13) of total deals, respectively. Second quarter activity broadened geographically as the global economy continued to show improvement and investors’ confidence in IPO stocks further strengthened.

In terms of average proceeds, the UK with US$523.0mn was considerably higher than US with average deal size of US$289.1mn. The US raised US$4.0bn; followed by China which raised US$3.7bn and the UK at US$3.1bn. Other territories included in RoW had seven deals raising US$1.3bn.

China
 

Raman Chitkara

Global leader
Technology
+1 (408) 817 3746

JianBin Gao

China and Hong Kong leader
Technology
+86 (21) 2323 3362

Jass Sarai

UK leader
Technology
+44 01895 52 2206

Alan Jones

US Technology Deals Partner
+1 (408) 667 0985

Pierre Marty

European Software Leader, PwC
+33 1 5657 58 15
 
   
Technology industry trends - management as a competitive advantage
Raman Chitkara discusses how technology companies can use cost management as a competitive advantage

Analysis & opinions

Technology IPO market insights
“With 40 technology IPOs this quarter and a strong pipeline of technology companies, barring a major market disruption, the IPO window should remain open for companies wanting to go public and 2014 could surpass even pre-financial crisis global technology IPO activity.”

-- Raman Chitkara, Global Technology Industry Leader, PwC
Technology IPO market insights
"Although China's stock market re-opened at the beginning of the year, the listing process to bring 600+ applicants into the capital markets has not been as issue free as expected. The pipeline for the second half of 2014 continues to be strong, particularly for cross-border listings."

-- Jianbin Gao, Technology Industry Leader, PwC China
Technology IPO market insights
“This quarter’s UK technology IPOs demonstrate resilience in the industry with some companies returning to the market after a period of being private. Offerings this quarter also highlight the depth and breadth of the UK’s technology sector and the strong infrastructure in the UK which allows companies to flourish.”

-- Jass Sarai, Technology Industry Leader, PwC UK
Technology IPO market insights
“There has been a revival of IPOs in France over the last few months, including Worldline, an ATOS subsidiary, which raised approximately €575 million in June. Excluding this major transaction, we see an increased focus around IPOs, including a number of proposals aimed at easing access to the capital markets for smaller companies.”

-- Pierre Marty, European Software Leader, PwC
Technology IPO market insights
“The US Technology IPO market accelerated pace during the second quarter of 2014 with the Software and Internet sectors leading the way. As investors evaluate the IPO pipeline, technology companies preparing to enter the market should focus on driving growth and predictability while maximizing their scale and margin.”

-- Alan Jones, Deals Partner, PwC US