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Going Public: The U.S. IPO Report -- Full Year 2020 Update

February 24, 2022

By Frank Lopez

& Teri E. O'Brien

Full Year 2020 Update

Despite the COVID-19 pandemic that effectively shut down the U.S. IPO market in March-April 2020, the IPO market shrugged off the pandemic, roaring back to life with issuers across all sectors accessing the market at a prolific pace. As we head into 2021, where are the opportunities—and what challenges remain—for the IPO market? In the latest edition of our study, Going Public: The U.S. IPO Report, we examine 140 IPOs with base deal sizes over $75 million that priced in 2019 and 2020 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:

  • Mega-IPOs over $750 million increased to almost 30% of deals, but medium-sized deals are still most prevalent. In addition, issuers from all sectors were able to access the market, led by life sciences and biotech, with a significant rise in consumer and retail IPOs.
  • 2020 was a record year for special purpose acquisition companies (SPACs), with over 185 SPAC IPOs over $150 million, representing about half of the overall IPO market.
  • The SEC review process remains streamlined; while COVID-19 delayed some issuers in the beginning of the year, on average issuers were able to complete IPOs in just over three and a half months.
  • IPOs involving secondary sales were down in 2020 overall, but the increase in deals containing a secondary offering in the second half of 2020 indicates the market for such deals is becoming much healthier.
  • Despite trends in the second half of 2019 focusing on issuer profitability, 70% of IPO issuers in 2020 were unprofitable.
  • Almost 40% of IPO issuers had multi-class voting structures, with a large portion having high voting ratios of 10:1 and even 20:1.

Looking Ahead

  • While the traditional IPO market remains active, business combinations with SPACs and direct listings will provide multiple paths for operating companies to going public in 2021.
  • We expect an uptick in IPOs of portfolio companies by sponsor-backed companies through traditional IPOs and SPAC business combinations, as the public markets may provide better valuations than the private markets.
  • The impact of the new Presidential administration is not clear, but there could be greater regulatory focus by the SEC, including on the SPAC market.


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