Q3 2016 IPOs: Auditor Market Share and More

There were 44 initial public offerings in U.S. markets between July 1, 2016 and September 30, 2016, raising $7 billion. That is a slight increase from the $6.2 billion raised by 40 IPOs last quarter.

All told, there have been 97 U.S. IPOs in the first three quarters of 2016, which raised over $16 billion. For comparison, the same period in 2015 had 157 IPOs that raised over $29 billion.

Industry Analysis
LINE Corp., a Japanese messenger app maker, brought in a total of $1.14 billion. That makes it the largest IPO for the quarter and, so far, for the year. That is only the third billion-dollar IPO this year. (Not counting the $1.7 billion”IPO” of Nomad Foods in Q1, which wasn’t really an IPO.)

Pharmaceutical and software publishing companies were tied at the top with six IPOs each, raising a combined $1.6 billion, or 22% of the total amount activity for the quarter.

Auditor Market Share
30 of the 44 IPOs in Q3 were audited by the Big Four, totaling 68% of the total market share. KPMG led the way with ten IPOs. PwC was not far behind with nine. EY had six, and Deloitte had five. Marcum had another good showing, making it four straight quarters that the New York-based firm has been in the top five.

PwC clients raised the most in proceeds, bringing in over $2.2 billion. LINE Corp uses PwC as its auditor, which helped boost the firm’s totals for the quarter.

Emerging Growth Companies
40 of the 44 IPO companies, or 91%, elected to register as emerging growth companies (“EGCs”) this quarter. 85% of IPO companies so far this year have registered as EGCs, which represents a slight decrease compared to the 92% that registered as EGCs for the same period last year.

There were more IPOs in Q3 this year than in the prior two quarters, but the overall trend is still down since 2014.