Thursday, February 01, 2007

Bracing — or Just Praying? — for an I.P.O. Comeback

Could initial public offerings rebound this year? Some hopeful private equity managers and venture capitalists seem to think so. There is, Rob Garver of declares, “a growing feeling that the future may be 2007.” One reason is that startups are getting restless. “Going public is the goal,” David Spreng, a partner at Crescendo Ventures, told “When a C.E.O. is rallying the troops, he’s not planting his flag and telling everyone, ‘Let’s build this company so that we can sell it to a private-equity firm.’”
CFO notes that I.P.O.’s have picked up “modestly” in recent months, and total capital raised grew last year, though there were fewer offerings in 2006 than in 2005.
Meanwhile, the amount of late-stage capital has grown, according to Peter Y. Chung, a partner with Summit Partners.
Complaints that Sarbanes-Oxley is sending companies overseas for their public debuts may be overblown, some observers say. Robert L. Friedman, a senior managing partner at Blackstone Group, noted that many of the companies that have floated stock had previously been publicly traded, or were part of larger firms that were, and therefore had their Sarbanes-Oxley compliance schemes already in place.
As DealBook noted last week, the travel Web site Orbitz — which had been part of the publicly traded Cendant — may soon go public again. The site’s parent company, Travelport, was taken private by Blackstone just six months ago.
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