Global Technology IPO Review Q2 2017 - PwC
www.pwc.comGlobal TechnologyIPO ReviewQ2 2017
Global tech IPO market has best quarter in two years based onvolume: 29 IPOs – Including five Unicorns – In Q2 2017Welcome to the Q2 2017 issue of PwC’s Global Technology IPO Review. It was the best quarter for technology initial public offerings(IPOs) in two years as the upbeat mood in the capital markets increased the appetite of investors for new public offerings. In the secondquarter, 29 technology companies completed IPOs for total proceeds of US 6.1 billion. This is the most technology IPOs since Q2 2015when there were 36.The improvement of economic fundamentals in the major developed economies, continued rallies in many equity markets and the backlogof tech companies waiting to go public led to the increased volume.While five Unicorns completed their IPOs, the big names continued to stay on the sidelines. The pace of Unicorn IPOs in the remainder ofcalendar 2017 is likely to be influenced by the post-IPO performance of Unicorns that completed their IPOs in the first half.Raman ChitkaraPartner and Global TechnologyIndustry LeaderPricewaterhouseCoopers LLPraman.chitkara@us.pwc.com*Issue size greater than US 40million (includes overallotment)and based on trade date;See MethodologyGeographically, China continued to show robust growth in the technology IPO market with 16 companies raising a total of US 1.2 billion.Chinese IPOs were favorably impacted by the efforts of the China Securities Regulatory Commission (CSRC) to speed up the approvalprocess. South Korea had a strong quarter with two IPOs, raising US 2.405 billion, including the largest IPO of Q2—Netmarble GamesCorp. with proceeds of US 2.356 billion. Germany followed South Korea with the second largest IPO of the quarter, Delivery Hero AG,which raised US 989 million.The US had six IPOs with total proceeds of less than a billion, a 50% improvement over the preceding quarter, though significantly belowcomparable historical levels achieved during strong IPO cycles. After a drought of five quarters, the UK had one technology IPO in Q22017, raising US 324 million. Rounding out Q2, Belgium, Canada and Israel had one IPO each.In a rare turn of events, Internet Software & Services barely beat out Semiconductors in volume, with nine IPOs to Semi’s eight. As fortotal proceeds, Internet Software & Services raised US 4.5 billion, and Semiconductors a more modest US 832 million. Internet Software& Services benefitted from Netmarble’s and Delivery Hero’s proceeds. Semiconductors benefitted from IPOs by five Chinese companies. Itwas the first time Semiconductors had eight or more IPOs since Q4 2010, when it had 12.Looking ahead, we expect the second half of 2017 to continue the positive momentum of the first half. However, any significant decline orincrease in volatility in the capital markets has the potential to change investor sentiment in a hurry. Factors to watch include Chineseregulatory developments; the tone, tenor and timing of US budget, debt ceiling and tax reform deliberations, and the continuity of overallglobal economic progress without inflationary pressures. Lastly, gaps between private company valuations in the recent past and thevaluations investors are willing to give public companies will influence how many and which Unicorns test the capital markets in thesecond half of 2017.Sincerely,PwC Global Technology IPO Review Q2 20171
Table of contents1.2.Q2 2017 Global tech IPO summary3Global tech IPO market has best quarter in two years based on volume3First-half 2017 average proceeds are higher than first-half 2015 and 2016 – Led by five Unicorn listings4The Asian tech IPO market takes center stage this quarter5Tech IPOs in Q2 2017 have wider geographic spread than the previous quarter6Global macroeconomic conditions improve as Asia gains strength; political challenges continue in the US and Europe7Semiconductor surprise: Subsector almost shares top spot for number of IPOs with Internet Software & Services8Country and stock exchange detail9China3.4.5.6.7.PwC Global Technology IPO Review Q2 20179South Korea10US11UK12Stock exchange distribution13Q2 2017 tech IPOs – Offering details14Key financials – Q2 201717Q2 2017 Technology IPO listings: Valuation metrics21Top three subsectors in Q2 201723Internet Software & or more information452
Q2 2017 Global tech IPO summaryChinese technology companies led with 16 IPOs raisingUS 1.2 billion. South Korea had two IPOs that raised morethan US 2.4 billion. The US had six tech IPOs with totalproceeds of US 764 million.Technology IPOs included five Unicorns, more than twicethe number in Q1. All were in the Internet Software &Services subsector: Netmarble Games Corp of South Korea(proceeds of US 2.4 billion), Delivery Hero (proceeds ofUS 989 million), China Rapid Finance Ltd of China(US 69 million), Okta Inc (US 187 million) and ClouderaInc (US 259 million) of the US. While Netmarble, DeliveryHero and Okta were priced above pre-IPO valuations, theother two were priced lower than pre-IPO valuations. 7,0005,813 6,0006,114305,38229 5,000 4,000 3,000 2,0003525201420101815No. of IPOsAfter a positive start to the year, Q2 2017 saw an increase intechnology IPOs. Deal volume increased significantly as 29IPOs raised a total of US 6.1 billion in the second quarter;the number of listings rose 61% quarter over quarter and107% year over year. Proceeds increased an impressive313% year over year and 5% over the first quarter 2017.Figure 1: Global tech IPOs Q2 2016-Q2 2017US millionsTech IPOs continue toride high on positiveinvestor sentiment101,480 1,00051,742 -Q2 2016Q3 2016Q4 2016Q1 2017Total proceeds (US mn)Total number of IPOsQ2 2017Source: S&P Capital IQ with analysis by PwC"Looking ahead, we expect the second half of 2017 to continue the positive momentumof the first half. However, investor sentiment could change in a hurry as a result of asignificant negative political development or increased volatility in the capitalmarkets.”Raman ChitkaraGlobal Technology Industry LeaderPwC Global Technology IPO Review Q2 20173
However, although the volume of tech IPOs rosesubstantially in Q2, average proceeds declined fromUS 323 in Q1 to US 210 in Q2 owing to smaller offeringsincluding three of the five Unicorns garnering less thanUS 600 million in aggregate. 25,00075 20,817 20,00066 18,955556059534750 15,00045 12,225 10,000 8,699 8,710 11,926302724 4,588 5,000No. of IPOsTwo Unicorns in particular, Netmarble (Q2) and Snap (Q1),raised total proceeds disproportionately and acted aspositive outliers in the Q2 and Q1 2017 IPO environments.As for average proceeds, H1 2017 was higher than theprevious two first-half periods at US 254 million. H1 2015had average proceeds of US 207 million and H1 2016 hadUS 94 million.Figure 2: H1 2010-H1 2017 total proceeds, average proceeds and no. of IPOsUS millionsFirst-half 2017 averageproceeds are higher thanfirst-half 2015 and 2016 –Led by five Unicorn listings15 2,249 158 416 164 170 287 94 207 254 -0H1 2010H1 2011H1 2012Total ProceedsH1 2013H1 2014Avg ProceedsH1 2015H1 2016H1 2017No. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 20174
Figure 3: Q2 2016-Q2 2017 – Asia – total proceeds and no. of IPOs4,00024 3,6553,50021193,000182,5001514US millionsAsia reported 19 technology IPOs, the highest for anyregion in Q2, with total proceeds of US 3.7 billion. Chinaled with 16 IPOs, followed by South Korea with two andIsrael with one. South Korea’s Netmarble was the biggestIPO in the Asian market and the largest tech IPO of thequarter, raising just under US 2.4 billion. China raisedUS 1.2 billion, and Israel had proceeds of US 46 million.No. of IPOsThe Asian tech IPOmarket takes centerstage this quarter 1,9212,00012111,5009 1,3227 9321,0006 5365003300Q2 2016Q3 2016Q4 2016Proceeds (US mn)Q1 2017Q2 2017No. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 20175
Figure 4: Q2 2017 geographic distribution3,0001816Q2 2017 had a wider geographic distribution than the priortwo quarters with eight countries reporting technologyIPOs. China led with 16, followed by the US with six andSouth Korea with two. Germany, the UK, Canada, Belgiumand Israel had one IPO each. China accounted for 55% ofIPOs in Q2 while South Korea had 39% of IPO proceeds.The UK reported one technology IPO after five quarters ofnone. That’s progress, but lingering uncertainty about theimpact of Brexit continues to hinder UK and EuropeanIPO activity.PwC Global Technology IPO Review Q2 2017US 076423241267110ChinaUnited StatesUnited KingdomSouth KoreaTotal proceeds (US mn)GermanyBelgium114Canada146310IsraelNumber of IPOsSource: S&P Capital IQ with analysis by PwC6No. of IPsTech IPOs in Q2 2017 havewider geographic spreadthan the previous quarter
Europe had three IPOs, one each from Germany, Belgiumand the UK, together raising US 1.6 billion in Q2 2017.Nonetheless, it continued to lag behind Asia and NorthAmerica with the fallout from Brexit still putting a damperon enthusiasm. 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 - 4,490 3,655 2,835 1,580 480 694 1,921 1,322 932 879 627 536 331 250 -North America 0EuropeQ2 2016Q3 2016AsiaQ4 2016Q1 2017 -RoWQ2 2017Source: S&P Capital IQ with analysis by PwCFigure 6: Regional analysis of number of IPOsNo. of IPOsAsia was at full throttle with 19 IPOs raising US 3.7 billion.In North America, the US had six IPOs and Canada hadone. The valuation gap is still a concern for technologycompanies in the US, with private placements valuingthem at much higher multiples compared to their likelyIPO valuations.Figure 5: Regional analysis of IPO proceedsUS millionsGlobal macroeconomicconditions improve as Asiagains strength; politicalchallenges continue in theUS and Europe20181614121086420191411567754323230North AmericaQ2 20160EuropeQ3 2016AsiaQ4 2016Q1 20170RoWQ2 2017Source: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 20177
The two subsectors also had the top proceeds. InternetSoftware & Services raised US 4.5 billion andSemiconductors had US 832 million. All five Unicorns inthe quarter were in the Internet Software & Servicessubsector, impacting those total proceeds.Internet Software & Services proceeds increased by 2%from the previous quarter and the number of IPOs was upby 80%. Semiconductors witnessed a sharp increase of167% sequentially in the number of IPOs with proceedsincreasing by 142% from the previous quarter.Of the eight Semiconductor IPOs, five were from China andone each from South Korea, Belgium and the US.Clearances issued by China regulatory authorities ledto the upsurge in Semiconductor IPOs this quarter.The Software subsector was a distant third in Q2 with fourIPOs raising a total of US 250 million. 5,000 4,395 4,491 4,000U.S in millionsThe Semiconductor subsector was second in volume witheight IPOs in Q2 2017, just behind Internet Software &Services – the perennial tech IPO leader – with nine IPOs.Between them they had 17, more than half the total.Figure 7: Subsector distribution showing total proceeds 3,000 2,000 832 660 1,000 341 126 250 145 345 0Internet Software& ServicesSoftware 59 202 149 169SemiconductorsQ2 2016ElectronicsQ1 2017 125 0Computers &Peripherals 426 214 185 293 0Communications IT Consulting &EquipmentServicesQ2 2017Source: S&P Capital IQ with analysis by PwCFigure 8: Subsector distribution showing number of IPOs109988766No. of IPOSSemiconductor surprise:Subsector almost shares topspot for number of IPOswith Internet Software &Services554443332232322121101000Internet Software& ServicesSoftwareSemiconductorsQ2 2016ElectronicsQ1 2017Computers &PeripheralsCommunicationsEquipmentIT Consulting &ServicesQ2 2017Source: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 20178
Country and stock exchange detailWith 16 IPOs, China had the largest piece of the tech IPOmarket in Q2, with proceeds of US 1.2 billion. With this,China topped its numbers of the last five quarters.Significantly, only one of the 16 Chinese IPOs was listed onthe NYSE; the others were on the Chinese exchanges. Thebiggest IPO in China this quarter was Olympic CircuitTechnology, which raised US 195 million. The increasingparticipation of companies from mainland China was dueto the attraction of the relatively higher PE ratio forcompanies on Chinese exchanges compared to the US andEuropean exchanges, and the acceleration of the IPOapproval process by the regulatory authorities (CSRC). 1,40021 1,196 1,204 1,20018 1,00016 822 800 611 400 200 3681212 6001599No. of IPOsThe Chinese tech IPO marketcontinues its momentum with 16IPOs in Q2 2017, or 55% ofthe totalFigure 9: China tech IPOsUS millionsChina6253 00Q2 2016Q3 2016Q4 2016Total proceeds (US mn)Q1 2017Q2 2017Number of IPOsSource: S&P Capital IQ with analysis by PwC“Though Chinese tech IPOs continued their escalating trend in Q2 2017, there havebeen signs that China regulatory authorities (CSRC) may slowdown the IPO approvalprocess in the second half of 2017. In spite of this, number of Chinese tech IPOs is stillexpected to reach a historical high in 2017, due to the increase of small to mediumsized deals.”Jianbin GaoTechnology Industry Leader, PwC ChinaPwC Global Technology IPO Review Q2 20179
After three quarters of no IPOs, South Korea’s Netmarbleraised the highest tech IPO proceeds globally in Q2 2017.Investors are now more comfortable with recent politicaldevelopments in South Korea. Investor confidence in theeconomy has improved with exports becoming more robustand stronger-than-expected GDP figures reported for Q12017. The Korean currency has grown stronger along withstock prices reaching an all-time high as investorscontinued to buy technology stocks on the back of theirpromising outlooks, led by the South Korean tech giantSamsung Electronics with its record breaking Q2 earnings.The IPO market is also expected to receive a boost from thenew rules introduced at the beginning of the year. Theserules allow start-ups without net income to list; earlier lawsallowed only listings by companies with reported netincome. However, the IPO market in H2 2017 may slowdown somewhat as a result of certain companiespostponing their IPO plans and any further escalatingtension with North Korea could also curtail enthusiasm.PwC Global Technology IPO Review Q2 2017 3,0005 2,405 2,5004 2,0003 1,5002No. of IPOsSouth Korea shines in the Q22017 tech IPO market with thehigh-profile listing of NetmarbleFigure 10: Q2 2017 South Korean tech IPOsUS millionsSouth Korea2 1,00011 500 41 0 0 0Q2 2016Q3 2016Q4 2016Q1 2017 00Total proceeds (US mn)Q2 2017Number of IPOsSource: S&P Capital IQ with analysis by PwC“While favorable market factors led to an excellent second quarter for tech IPOs inSouth Korea, the second half of 2017 may not prove as robust due to several majorcompanies postponing their listings.”Steven KangTechnology Industry Leader, PwC South Korea10
The US reported six tech IPOs with proceeds of US 764million, much lower than last quarter’s US 4.5 billion,most of which was from the Snap IPO. The averageproceeds in Q2 were US 127 million.The two US Unicorns—Cloudera and Okta—listed thisquarter. It is worth noting that Cloudera’s post-IPOvaluation was lower than its pre-IPO valuation: US 2.3billion versus US 4.1 billion. Okta’s post-IPO valuation wasslightly higher than its pre-IPO valuation: US 1.5 billionagainst US 1.2 billion. 5,0008 4,4906 4,0005665 3,00044 2,000 1,000 694 764 627No. of IPOsTwo Unicorns supported the UStech IPO market, although withmuch lower average proceedsFigure 11: US tech IPOsUS millionsUS2 479 00Q2 2016Q3 2016Q4 2016Total proceeds (US mn)Q1 2017Q2 2017Number of IPOsSource: S&P Capital IQ with analysis by PwC“Six tech IPOs raised 764 million representing a 50% increase in volume from Q1despite several “down round” IPO valuations. The buy side took advantage of abuoyant US Tech IPO market as it outperformed the broader US IPO market withreturns averaging 20%, almost double the 11% return* of the broader IPO market.”Alan JonesTechnology Deals Partner, PwC US*PwC Deals Insights: ology-deals-insights.htmlPwC Global Technology IPO Review Q2 201711
With one IPO in Q2, the UK broke its long drought. Butdoes one IPO suggest the UK market is regaining themomentum it lost due to last year’s Brexit vote?It remains to be seen. Much will depend on how well the“divorce” negotiations with the EU proceed in the comingmonths. The appetite for IPOs could return as the Brexitelection shock subsides and investors start to get a clearerpicture of the new landscape. Pent up demand could alsogive the market a push.PwC Global Technology IPO Review Q2 2017 350 3245 3004 250 2003 1502 100No. of IPOsThe UK technology IPO marketfinally opens up after apersistent drought of fivestraight quartersFigure 12: UK tech IPOsUS millionsUK11 50 0 0 0 0Q2 2016Q3 2016Q4 2016Q1 2017 00Total proceeds (US mn)Q2 2017Number of IPOsSource: S&P Capital IQ with analysis by PwC12
Figure 13: Q2 2017 stock exchange distribution 2,500Q2 2017 saw an increase in stock exchange participation.China’s exchanges led with 15 listings total whereas theKorean exchange dominated in proceeds with just one IPO.Shanghai Stock Exchange had 31% of the total listings,whereas Korea Stock Exchange had 39% of the totalproceeds—the result of the biggest IPO of thequarter, Netmarble.99 2,00087US millionsThe US exchanges had seven listings in Q2 2017, one morethan Q2 2016. However, numbers for China’s exchangesincreased by 11 IPO listings and proceeds byUS 832 million.10 2,356 1,5006645 989 1,0004 695 500 44033 461 3731 114 -1 267Total proceeds (US mn)11 4612 3241 50No. of IPOsStock exchange distribution11-Number of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201713
Q2 2017 tech IPOs – Offering detailsTable 1: Q2 2017 tech IPOs – By highest proceedsIssuedateCompanySubsectorProceeds(US etmarble Games CorporationInternet Software &Services2355.75Korea Stock Exchange (KOSE)South Korea06/29/2017Delivery Hero AGInternet Software &Services989.06Deutsche Boerse AG (DB)Germany05/26/2017Alfa Financial Software Holdings PLCInternet Software &Services324.11London Stock Exchange (LSE)United Kingdom04/05/2017X-FAB Silicon Foundries SESemiconductors266.58Euronext Paris (ENXTPA)Belgium04/27/2017Cloudera IncInternet Software &Services258.75New York Stock Exchange(NYSE)United States04/17/2017Olympic Circuit Technology Co LTDSemiconductors194.69Shanghai Stock Exchange(SHSE)China04/06/2017Okta IncInternet Software &Services187NASDAQ Global Select (NQGS)United States04/12/2017Yext IncInternet Software &Services132.83New York Stock Exchange(NYSE)United States05/05/2017Real Matters IncInternet Software &Services114.38The Toronto Stock Exchange(TSX)Canada04/11/2017Raisecom Technology Co LtdCommunicationsEquipment113.1Shanghai Stock Exchange(SHSE)China05/23/2017Nanjing Huamai Technology Co LtdCommunicationsEquipment55.58Shanghai Stock Exchange(SHSE)China04/06/2017Zhejiang Jiemei Electronic andTechnology Co LtdSemiconductors110.57Shenzhen Stock Exchange(SZSE)ChinaSource: S&P Capital IQPwC Global Technology IPO Review Q2 201714
Table 1: Q2 2017 tech IPOs – By highest proceedsIssuedateCompanySubsectorProceeds(US nzhen Genvict TechnologiesCo LtdElectronic ComputerManufacturing93.28Shenzhen StockExchange (SZSE)China06/28/2017Fujian Raynen Technology Co LtdSoftware76.26Shanghai StockExchange (SHSE)China05/24/2017Appian CorporationSoftware75NASDAQ Global Market(NasdaqGM)United States04/25/2017Jiangsu Transimage TechnologyCo LtdComputers & Peripherals69.89Shenzhen StockExchange (SZSE)China04/27/2017China Rapid Finance LimitedInternet Software &Services69New York StockExchange (NYSE)China06/05/2017SG Micro CorpSemiconductors65.74Shenzhen StockExchange (SZSE)China06/14/2017Suzhou Etron Technologies CoLtdElectronics62.91Shanghai StockExchange (SHSE)China06/29/2017Tintri IncInternet Software &Services60NASDAQ Global Market(NQGM)05/12/2017Fujian Apex Software Co LtdSoftware58.1205/23/2017Nanjing Huamai Technology n Sunnypol Optoelectronics Co LtdComputers &Peripherals55.5105/26/2017EmbedWay Technologies(Shanghai) CorporationSemiconductors51.57Shanghai StockExchange (SHSE)Shanghai StockExchange (SHSE)Shenzhen Stock Exchange(SZSE)Shanghai Stock Exchange(SHSE)United StatesChinaChinaChinaChinaSource: S&P Capital IQPwC Global Technology IPO Review Q2 201715
Table 1: Q2 2017 tech IPOs – By highest proceedsIssuedateCompanySubsectorProceeds(US RT Global Holdings IncSemiconductors50.55NASDAQ Global Select(NasdaqGS)United States05/29/2017Philoptics Co LtdSemiconductors49.65KOSDAQ (KOSDAQ)South Korea05/29/2017Telrad Networks LtdCommunicationsEquipment45.66Tel Aviv Stock ExchangeIsrael06/26/2017Shenzhen JingQuanHua Electronics CoLtdElectronics45.42Shenzhen Stock Exchange(SZSE)China04/23/2017Will Semiconductor CO Ltd ShanghaiSemiconductors42.42Shanghai Stock Exchange(SHSE)China04/17/2017Shanghai Koal Software Co LtdSoftware40.13Shanghai Stock Exchange(SHSE)ChinaSource: S&P Capital IQPwC Global Technology IPO Review Q2 201716
Key financials – Q2 2017The majority of the technology companies that listed IPOsin Q2 2017 reported net income for their last twelve months(LTM); their LTM net income average was US 23 million.The other 8 companies reported net losses that lowered theoverall LTM net income average of US (108) million. Theaverage for the previous quarter was a net loss.The eight IPOs from the Semiconductors subsector, which raised total proceeds of US 832 million, reported thesecond highest average LTM revenue at US 270 million. At US 685 million, SMART Global Holdings, from theSemiconductor subsector, reported the second highest LTM revenue of the Q2 IPOs companies.Figure 14: Q2 2017 and Q1 2017 tech IPOs – Net incomeQ2 2017The tech IPO companies’ average LTM revenue for Q2 2017was US 219 million, a 37% decline from the previousquarter. The average LTM EBIDTA for Q2 2017 was US 4million, a 69% decrease over the US 13 million LTMEBIDTA in Q1 2017.Seven of the Q2 companies that reported LTM net losseswere from the Internet Software & Services subsector, ofwhich five listed on a US stock exchange. One of Q2’s fiveUnicorns, Cloudera, from the Internet Software & Servicessubsector, reported the highest LTM net loss at US 366million.22%28%As noted, the overall average LTM revenue for Q2 2017 wasUS 224 million. The average LTM revenue for Asia,including China, was US 191 million. Netmarble from theInternet Software & Services subsector raised the Asianaverage. It had the highest LTM revenue of any Q2 IPOcompany at US 1,246 million.The Internet Software & Services subsector, with nine IPOs,reported the highest average LTM revenue at US 312million and the highest EV/LTM revenue at 9.7x. However,the subsector also reported the highest average LTM netloss—US 77 million.PwC Global Technology IPO Review Q2 2017Q1 201772%78%Positive net incomeNet lossPositive net incomeNet lossSource: S&P Capital IQ with analysis by PwC17
Figure 15: Q2 2017—Average LTM revenue 31229In US millions 300 27025 224 25020 187 20030No. of IPOs 35015 150 111 100 100 5033CommunicationEquipmentElectronics29 11281045 00Computers &PeripheralsInternet Software andServicesLTM revenueSemiconductorsSoftwareAll SectorsNo. of IPOs 50 40 30 20 10 0( 10)( 20)( 30)( 40)( 50) 412925 24 1730 14 7 4201593281043No. of IPOsIn US millionsFigure 16: Q2 2017 —Average LTM EBITDA5( 42)0Computers &PeripheralsCommunicationEquipmentLTM EBITDAElectronicsInternet Software andServicesSemiconductorsSoftwareAll SectorsNo. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201718
Figure 17: Q2 2017—Average LTM net income29 40 13 1325 5 020( 20)( 13)( 40)98( 60)( 80)30 21321510No. of IPOsIn US millions 20 19435( 77)( 100)0Computers net Software andServicesLTM Net incomeSemiconductorsSoftwareAll SectorsNo. of IPOsSource: S&P Capital IQ with analysis by PwCFigure 18: Q2 2017—Average total debt 8029 7325 60 5020 47 40 38 31 32 3010 20 101523398Computers &PeripheralsCommunicationEquipmentLTM debt54 4 0 11No. of IPOsIn US millions 70300ElectronicsInternet Software andServicesSemiconductorsSoftwareAll SectorsNo. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201719
Figure 19: Q2 2017 —Average enterprise value 3,50029 3,01525 2,50020 2,000 1,453 1,50015No. of IPOsIn US millions 3,0003010 1,000 500 695 791 682 6249233CommunicationEquipmentElectronics 0Computers &PeripheralsEnterprise value 6788540Internet Software andServicesSemiconductorsSoftwareAll SectorsNo. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201720
Q2 2017 Technology IPO listings: Valuation metricsFigure 20: Q2 2017 EV/LTM revenueIn Q2, the technology sector’s average EV/LTM revenuemultiple was 6.5x, down from 8.0x in Q1 2017 and 8.5x inQ2 2016.9.7x10.0x8.0xIn multiplesThe EV/LTM EBIDTA metric was 348.1x, higher than the222.1x in Q1 o. of IPOsDespite having 29 IPO listings in the quarter, the EV/LTMrevenue metric in Q2 2017 failed to match that of Q1 2017whereas Ev/LTM EBIDTA surpassed that of previousquarters.102.9x2.0x2348350.0x0Computers & etSemiconductorsSoftware andServicesEV/LTM revenueSoftwareAll SectorsNo. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201721
Figure 21: Q2 2017 EV/LTM EBITDA400.0x35348.1x350.0x30In .8x297.9x104NM5346.1x0.0xNMInternet Software andServicesSemiconductors30.0xComputers &PeripheralsCommunicationEquipmentNo. of IPOs300.0x0ElectronicsEV/ LTM EBITDASoftwareAll SectorsNo. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201722
Top three subsectors in Q2 2017Figure 22: Internet Software & Services– LTM revenue 500 450The nine listings in the Internet Software & Servicessubsector reported the highest average LTM revenue atUS 303 million.The subsector had nine offerings in Q2 2017, up from fivedeals in Q1 2017 and three deals in Q2 2016.The subsector’s average LTM EBIDTA (US 42 million) andaverage LTM net loss (US 77 million) were pulled down bysignificant LTM net losses reported by Cloudera, DeliveryHero and Tintri.The subsector’s EV/LTM revenue decreased significantly to9.7x in Q2 from 27.9x in Q1 2017. 4009 350In US millionsThe average LTM revenue increased by 53% quarter onquarter and by 223% year on year.12 472 312108 300 250 204654 200 150 96 100 503 1313No. of IPOsInternet Software &Services22 00Q2 2016Q3 2016LTM revenueQ4 2016Q1 2017Q2 2017No. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201723
Figure 23: Internet Software & Services – LTM EBITDA 2012 1 010( 20)8( 24)( 40)65( 42)( 60)33No. of IPOsIn US millions94( 54)2( 80)2( 92)( 100)Q2 2016Q3 2016LTM EBITDAQ4 2016Q1 20170Q2 2017No. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201724
Figure 24: Internet Software & Services – LTM net income 012( 14)In US millions( 100)( 92)( 200)( 300)( 400)( 77)1098653No. of IPOs( 28)432( 500)2( 479)( 600)0Q2 2016Q3 2016LTM Net incomeQ4 2016Q1 2017Q2 2017No. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201725
Figure 25: Internet Software & Services – EV 6,00012 5,6749 5,0008 4,000 3,015 3,000 2,000 1,00010 1,5263536No. of IPOsIn US millions 4,58742 68620 0Q2 2016Q3 2016Enterprise valueQ4 2016Q1 2017Q2 2017No. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201726
Figure 26: Internet Software & Services – Total debt 3512 31 30 28109 20 186 15 108 113 8No. of IPOsIn US millions 2545232 5 00Q2 2016Q3 2016Total debtQ4 2016Q1 2017Q2 2017No. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201727
Figure 27: Internet Software & Services – EV/LTM revenue30.0x1227.9x109In No. of IPOs25.0x4220.0x0Q2 2016Q3 2016EV/LTM revenueQ4 2016Q1 2017Q2 2017No. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201728
Figure 28: Internet Software & Services – EV/LTM EBITDA1200.0x121083.7x109In multiples800.0x600.0x6400.0x200.0x853No. of IPOs1000.0x4232NMNMNMNMQ4 2016Q1 2017Q2 20170.0x0Q2 2016Q3 2016EV/LTM EBITDANo. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 201729
Figure 29: Semiconductors – LTM revenueThe Semiconductors subsector has maintained its positionamong the top three subsectors continuously for threequarters as measured by number of deals. The averageproceeds increased by 49% quarter on quarter. 300The subsector reported the second highest average LTMrevenue for Q2 2017, US 270 million, a 49% increasequarter on quarter. Still, the subsector had the lowestEV/LTM revenue of 2.9x for Q2 2017. The EV/LTMEBITDA for Q2 2017 was 19.3x. 200The number of IPOs increased year over year by 300%whereas the quarter-over-quarter increase was 167%.The total debt for the quarter increased by 284% overQ1 2017.12 276 270 25010US millions8 1838 181 147 1506 100No. of IPOsSemiconductors43 50222Q2 2016Q3 2016Q4 20162 00LTM revenueQ1 2017Q2 2017No. of IPOsSource: S&P Capital IQ with analysis by PwCPwC Global Technology IPO Review Q2 20
PwC Global Technology IPO Review Q2 2017 2 Table of contents 1. Q2 2017 Global tech IPO summary 3 Global tech IPO market has best quarter in two years based on volume 3 First-half 2017 average proceeds are higher than first-half 2015 and 2016 - Led by five Unicorn listings 4 The Asian tech IPO market takes center stage this quarter 5
PwC IPO and FO highlights Global IPO Watch Q4 2018 3 The largest IPO of the year took place in Japan, as Japanese telco SoftBank raised 21.3bn. It is the 4th largest IPO in history and could become 2nd if the greenshoe is exercised 5 German IPO proceeds were highest in EMEA following the j
Pre IPO Strategy 1 2 years Planning and preparation 6 12 months Execution 2 6 months Completion 0 2 months Life as a PLC Post IPO Identify roadmap to IPO 'H QHDQG . and roadshow presentation Kick off meeting Exit strategy Communications strategy Active IPO execution and pros
3.3: review program management plan—level 3 ipo diagram 56 3.4: review quality assurance plan—level 3 ipo diagram 60 3.5: review software development plan—level 3 ipo diagram 64 3.6: review configuration management plan—level 3 ipo diagram 69 3.7: what's next? 72 chapter 4 create test plan: levels 2 and 3 ipo diagrams 73 4.1: overview 73
The IPO process The IPO process consists of three distinct parts: A. Planning – understanding your objectives and honestly assessing your readiness. B. Execution – running separate IPO workstreams to deliver key requirements. C. Completion – selling your business to potential investors. To drive this process it is critical to have an IPO .File Size: 649KB
Global Technology IPO Review - Q3 2015 4 Executive summary Extreme volatility in the global capital markets slowed tech IPO activity in the third quarter. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX ) rose 126% in August, hitting its highest level (40) since October 2011 and then declined to 24 by the close of September .
Company counsel coordinates the overall IPO process and the efforts of the working group. Sometimes having the most IPO experience among all offering participants, company counsel guides the company through the entire IPO process, the often labyrinthine maze of securities law statutes, rules, and regulations, and an equally important patch-
10 NYSE IPO Guide 1.1 Advantages of conducting an IPO J.P. Morgan (Investment Banking) When considering an IPO, a company should evaluate the pros and cons, as well as the motivations for going public. This evaluation process is best conducted in conjunction with an investment bank, which c
A Course on Rough Paths With an introduction to regularity structures June 2014 Errata (last update: April 2015) Springer. To Waltraud and Rudolf Friz and To Xue-Mei. Preface Since its original development in the mid-nineties by Terry Lyons, culminating in the landmark paper [Lyo98], the theory of rough paths has grown into a mature and widely applicable mathematical theory, and there are by .
