Strong Stock Market Fuels Surge in Secondary Offerings
October 16, 2013
No surprise here.
Thanks to a surging stock market in 2013 (the S&P 500 is up more than 16% year-to-date), secondary offerings have been an increasingly popular exit route for PE firms to liquidate holdings in publicly traded portfolio companies. According to the PitchBook Platform, U.S.-based, private equity-backed companies have announced or completed 44 secondary offerings since the beginning of this year, which have resulted in $15 billion worth of stock being cashed in.
IPOs create bigger splashes than quieter secondary offerings, but more than a few firms have sold significant stakes through secondary offerings during the stock market surge. Palladium Equity Partners, for example, sold 69% of its holdings in Regional Management (NYSE: RM) in late September. Proceeds from the offering added up to $67 million, resulting in a 500% return on that portion of the firm’s investment. August and September were particularly enticing months for firms to cash out, with 19 secondary offerings in just two months.
Here are some select offerings this year via the PitchBook Platform:
Featured image courtesy of Wikimedia Commons user Alex Proimos.