2013 to Bring Slim IPO Pickings
A volatile year for initial public offerings has paved the way for a potentially meager 2013, with just a few dozen companies filing to go public within the last six months, none of which are considerable in size.
During the second half of 2012, at least 36 companies filed initial prospectuses with the Securities and Exchange Commission, according to data compiled by Dealogic, putting the new year on track to be far less active than its predecessor for IPOs.
This past year, 139 companies went public, according to the money manager Renaissance Capital, which tracks IPOs, and even that number was a far drop from the prior two years, during which more than 200 filers tapped the public markets for the first time. (Read More: Facebook Pushes US to Top of IPO Charts.)
The drop is attributable in part to the JOBS Act, a law in place since April 2012 that allows companies with less than $1 billion in revenue to file initial offering documents confidentially until three weeks before their anticipated offering. But new-issue watchers say the marketplace itself has also become more hostile to emerging companies.
"There's been a long-term trend of smaller companies having a harder and harder time being profitable. And getting big fast is more important than it used to be. And the way to get big fast is to merge, rather than relying on organic growth," said Jay Ritter, a finance professor at the University of Florida, who recently published an academic paper entitled "Where Have All the IPOs Gone?"
Ritter believes that rather than taking a few years to mature and then tapping the IPO market for more permanent capital, as companies did in the 1990s, the pressure is now on emerging companies to "sell out" rather than to stay independent and go public.
"The mantra in Silicon Valley for quite a while has been build to sell," he added. (Read More: 2013 Areas of Strength: JPM Strategist.)
And despite banker chatter about the possibility of the social network Twitter or the Chinese Internet behemoth Alibaba Group going public in what would probably be multi-billion dollar deals reminiscent – at least in size — of Facebook's $16 billion issue this past May, there are no clear signals those companies want to make their debuts just yet. ("Tech bankers are grasping right now," said one new-issue deal-maker, without sarcasm.) (Read More: The 10 Biggest Internet IPOs.)
For the moment, anyway, the population of companies now awaiting IPOs is decidedly old-school. Sectors like real estate, energy, and health care dominate the queue, far outpacing technology in expected dollar volume. Some of the more recognizable filers include companies like the paper-maker Boise Cascade, the day-care provider Bright Horizons Family Solutions, and the leisure park Seaworld Entertainment, all of which expect to raise $100 million or more, according to Dealogic.
The largest among them: SunCoke Energy Partners LP, a holding company that operates two coke, or coal-byproduct, suppliers. SunCoke is expected to issue roughly $350 million in stock as early as January, according to Dealogic and public filings.
—By CNBC's Kate Kelly; Follow her on Twitter: