A bearish outlook for tech IPOs in 2013

Contacts: Brenon Daly

In our just-published report on our annual survey of corporate development executives, the shoppers told us they don’t expect to have to outbid the public market when they consider acquisition targets. Almost half (47%) said they anticipate the IPO market to offer ‘less competition’ in 2013, which is three times higher than the 15% that predicted ‘more competition.’ (For comparison, last year one-third of responses (33%) forecasted more competition from IPOs, while one-quarter (26%) indicated less competition.)

The chilly outlook for offerings underscores just how difficult the IPO market has become. In the back half of 2012, there have been only about a half-dozen tech offerings. Although there have been some eye-popping market caps created (for instance, Workday, which came public in mid-October, now trades at $8.5bn), there just haven’t been enough to see a real threat of ‘dual tracking,’ according to corporate buyers.

If anything, the IPO market will be even quieter in 2013. The median forecast from our corporate development executives called for just 20 offerings, down from about 25 offerings in each of the two previous surveys. Click here to see our full report on the outlook for tech IPOs and M&A in 2013 from a key market participant: corporate development executives.

Projected number of tech IPOs in coming year

Period Median response
December 2012 for 2013 20
December 2011 for 2012 25
December 2010 for 2011 25
December 2009 for 2010 15
December 2008 for 2009 5

Source: 451 Research Tech Corporate Development Outlook Survey

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