- Dollar value of share sales may drop for second straight year
- Billion-dollar debuts limited to First Data, two partnerships
First Data Corp. and Albertsons Cos. highlighted the struggles that U.S. companies face with initial public offerings after more than 6 1/2 years of a bull market in stocks.
The dollar value of U.S. IPOs may decline for the second straight year, as shown below. Initial share sales amounted to $33.9 billion through yesterday, according to data compiled by Bloomberg and based on trading dates. The total for all of 2014, $59.7 billion, fell 18 percent from a peak in 2013.
First Data, a payments processor, went public eight years after KKR & Co. completed a $26 billion leveraged buyout. The New York-based company sold 160 million shares two days ago at $16 each, below a proposed range of $18 to $20. The stock fell as much as 2.2 percent on its first day of trading before closing with a 1.6 percent decline at $15.75.
At $2.6 billion, the IPO was only the third to exceed $1 billion this year. The other two were made by energy partnerships, Columbia Pipeline Partners LP and Tallgrass Energy GP LP. Last year, 13 initial sales crossed the billion-dollar threshold.
Albertsons delayed an IPO two days ago after disappointing forecasts from Wal-Mart Stores Inc., a rival in the grocery business. The sale by the Boise, Idaho-based company would have raised as much as $1.7 billion. Albertsons is controlled by the private-equity firm Cerberus Capital Management, which bought Safeway Inc. earlier this year and combined the two companies.
To be sure, IPOs may pick up toward year-end if last year is any guide. Five of the previous year’s sales of more than $1 billion were done in the fourth quarter. The biggest was a $2.6 billion sale by Paramount Group Inc., a real-estate developer based in New York.