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Income Trusts Drive 2005 IPO Activity TORONTO, July 5, 2005 — Income trusts have moved beyond their traditional
strength in the real estate and energy sectors. According to a new
PricewaterhouseCoopers (PwC) survey of Canadian IPO capital market activity in
the first half of 2005, income trusts have become the engine driving the broader
market for new equity offerings in Canada. With 34 IPOs successfully completed on the TSX from January through June, 2005, total IPO activity in the first half of the year was on par with the same period of 2004, when 32 IPOs were completed. While income trusts have represented half of the IPO activity in past surveys, most notably in 2002, the majority of those issues have been from the real estate and oil and gas sectors. The number and volume of income trusts from areas such as consumer products and industrial products marks a significant expansion of their popularity. "Income trusts have emerged as a preferred structure for IPOs," according to Ross Sinclair, national leader for PwC's IPO and Income Trust Services. "Previously, trusts tended to be large and built on a high profile asset such as the Yellow Pages IPO that raised almost a billion dollars in 2003. Today, however, IPOs are being structured as income trusts across the entire spectrum of the market." The income trust category includes a number of U.S.-based companies that completed initial offers in Canada in the form of Income Participating Securities (IPSs). "It's interesting to note that a broad range of U.S. companies are accessing Canadian capital markets through this hybrid income trust structure," Sinclair said. The PwC survey shows that IPOs in the consumer products sector represented the largest number and value of new offerings, with nine valued at $750 million for the period versus one at $51 million for the comparable period of 2004. The largest corporate IPO during the 2005 survey period was from a technology company—the $112 million offering by Aspreva Pharmaceuticals Corporation. The largest income trust was Aeroplan Income Fund, in the services sector, worth $250 million. Only one sector—utilities—had no activity during the period. Ranked by value, the industrial products sector was the second most active in the market with five new issues at a value of $367 million versus five last year worth $345 million. Third was the services sector with two IPOs for a value of $310 million. There were no IPOs in the services sector in the first half of 2004. In descending order of value, the financial services sector was fourth with $278 million from two new offerings. Fifth was oil and gas at $265 million from six new issues, followed by communications and media at $211 million from three offerings. Mining and real estate, two previously active sectors for new offerings, reported smaller gross values and reduced activity. The value of offerings in the mining sector fell to $136 million from three IPOs, down significantly from the $492 million generated by seven new offerings in the same six-month period of 2004. Real estate generated $75 million in new IPO activity from one offering, off from the $329 million from two IPOs in 2004. "Across the board, it's shaping up as a very good year for the IPO market," Sinclair said. "We haven't seen any records set so far, but we are on track for a vibrant IPO market in 2005." Sinclair also noted that the pace of new offerings was brisk: "It behooves an organization contemplating an IPO, particularly an income trust, to take advantage of this strong market." PwC publishes its annual IPO surveys after two quarters and at the end of the year. "The surveys are aimed at providing a broad overview of IPO market activity. Ideally they place the market in better context for investors, corporate strategists, the media and others with an interest in the market," Sinclair said. Beginning with 2005, the survey reports on 11 market sectors. These include
communications and media, consumer products, financial services, industrial
products, mining, oil and gas, real estate, retail, services, technology and
utilities. In past surveys the categories were financial services, forestry,
life sciences, mining, oil and gas, other (including transportation,
environment, pipeline and utilities), products (including consumer and
industrial products), real estate, and technology and media (including
telecommunications and entertainment).
Ernst
& Young Global Survey-2005 Ernst & Young has released the Global IPO Report 2005. This is the second global IPO report produced by Ernst & Young and was driven by the increasing needs of companies planning an initial public offering in markets around the world. The following are key highlights for the Australian and Asia-Pacific region:
The Global IPO Report presents:
May 2005 This is our quarterly survey tracking the volume and value of IPOs on Europe's main stock exchanges. Compiled by our London Capital Markets Group, it surveys all new primary market listings on Europe's principal stock markets and market segments, including exchanges in Austria, Belgium, Denmark, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Spain, Sweden, Switzerland, and the UK. Highlights from Q1 2005
July 2005 PricewaterhouseCoopers latest IPO Watch Europe survey - tracking volume and value of IPOs on Europe's main stock exchanges - shows a continuous upward trend in IPO activity in the second quarter of 2005. There were 169 IPOs between 1 April and 30 June, considerably higher than the 95 recorded in the same period of 2004 and the 98 recorded in quarter one of 2005. The high level of activity drove the total offering value of IPOs up to €10,778m in the second quarter of 2005, a notable increase compared to the €8,728m recorded in the second quarter of 2004 and €6,143m recorded in the first quarter of 2005. As was the case in the preceding quarter, activity was largely driven by London's smaller companies market, AIM, with a relative lack of individual high value IPOs in the quarter as compared with the second quarter of 2004. The only IPO to raise over €1bn in the second quarter of 2005 was the online gaming company, PartyGaming which raised €1.4 billion on London. In contrast the same period last year saw three IPOs over €1bn accounting for close to half of the total offering value on all exchanges in that quarter. The first quarter of 2005 also saw two IPOs over €1bn. Therefore, the
continuing market trend for the second quarter of 2005 was for a higher number
of IPOs with a lower average offering value - €64m compared with €92m in the
same period in 2004.
IPO Watch Europe: Review of the year 2004 May 2005 This annual review collates and builds on the findings of our quarterly surveys, which track the volume and value of IPOs on Europe's main stock exchanges. Compiled by our London Capital Markets Group it surveys all new primary market listings on Europe's principal stock markets and market segments, including exchanges in Austria, Belgium, Denmark, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Spain, Sweden, Switzerland, and the UK. Highlights in the 2004 annual review
Ernst & Young Global IPO Survey - 2004 Ernst & Young has released the Global IPO Survey 2004. This is the first global IPO report produced by Ernst & Young and was driven by the increasing needs of companies planning an initial public offering in markets around the world. The Global IPO Report presents:
Key findings Although IPO activity was down in 2003 when compared to 2002, a surge in flotations between September 2003 and March 2004 suggests that confidence is returning to the world's stock markets. The key region last year was Asia, particularly China. The region accounted for two-thirds of the IPOs worldwide, as numbers continued to fall in Europe and North America. Several heavyweight cross-border issues raised over $500 million as companies
from growing markets were backed by international investors.
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