Midwest IPO Insights Q4 2020

Midwest IPO Insights Q4 2020

US capital markets demonstrated their resilience this year, underlining the confidence of investors and businesses going into 2021. According to PwC’s 2020 Annual Capital Markets Watch, US IPOs raised a record $145 billion from 407 companies in 2020 — the highest levels of investor proceeds in the past 40 years and more than double 2019’s haul.

• There was a significant increase in IPO activity relative to previous years with thirty-three IPOs pricing having a total deal value of over $13 billion, which is the highest level of activity in the last five years.
• The market saw two mega IPOs in 2020 with the successful listings of Rocket Companies, Inc. and Reynolds Consumer Products, Inc. compared to one in 2019.
• The Midwest market demonstrated its resilience in what was a tough year in many respects, underlining the confidence of investors and businesses going into 2021.

• SPAC IPOs led activity for the year with a total of 16 IPOs raising over $4.1 billion in proceeds during 2020.
• A similar trend has manifested itself across the IPO market in 2020 with a bifurcation between traditional IPOs and SPAC IPOs seeking a merger with existing businesses. And as such, there is currently a lot of SPAC capital looking to be put to use.
• With continued low interest rates, the capital markets are expected to remain lively heading into the beginning of the calendar year.

We expect the US equity and IPO capital markets to begin 2021 on a strong note, as interest rates continue to remain low and investors expect earnings to substantially increase in the coming year. The outlook for SPACs in 2021 is going to be largely dependent on the success of the current crop of SPACs being able to identify and successfully merge with companies that provide earnings growth. 

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