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Going Public: The U.S. IPO Report

January 12, 2021

By Frank Lopez

& Teri E. O'Brien

Half Year 2020

Where are the opportunities in the U.S. IPO market as we move deeper into the second half of 2020 and continue to navigate the COVID-19 pandemic? While deal flow ground to a halt after February, due to COVID-19, beginning in May the IPO market came roaring back, allowing those companies with IPO plans in the pipeline before the start of the pandemic to access the market. In the latest edition of our study, Going Public: The U.S. IPO Report, we examine 28 IPOs that priced in the first half of 2020 with base deal sizes over $75 million to uncover the developments that prospective issuers, sponsors, investment banks and investors need to keep top of mind as they continue to prepare for opportune market windows.

Top Trends to Follow

Based on our analysis, we see several overarching trends shaping the IPO outlook, including:

  • Despite several mega-IPOs, medium-sized deals still prevail.  In addition, life sciences and biotech issuers, along with SPACs, dominated the first-half 2020 IPO market, but other sectors also returned late in Q2 and into Q3.
  • Although the SEC review process remains streamlined, deals are taking longer to complete. 
  • Q2 saw a return to secondary sales following no secondaries in Q1. 
  • Pricing rebounded, with half-year 2020 pricing strongly compared to 2019. 
  • Underwriting commissions are trending toward the historical norm of 7%, reflecting the decrease in high-profile IPOs where issuers had been able to negotiate lower fees.
  • Despite some trends in Q4 2019 toward IPO issuers that were profitable, IPO issuers in the first half of 2020 largely were unprofitable, led by life sciences and biotech IPOs.
  • The SPAC market in 2020 has been very active. With approximately 60 SPAC IPOs over $150 million through the end of August, private companies can now look to a three-track process, since in additional to a traditional IPO or sale transaction, acquisition by a SPAC is an alternative path to going public.

Looking Ahead

  • The IPO market rebounded in May and June and there has been a resurgence of IPOs over the summer. We expect September and October to be an active market in advance of the fall presidential election. 
  • COVID-19 will increasingly be a focus of disclosure and marketing—and perhaps part of non-GAAP financial measures. We anticipate that companies able to market their success during the COVID-19 pandemic are likely going to seek to access the market. 
  • Sponsors may see the public markets as more attractive than private sales. 
  • Virtual roadshows are the new norm. 


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