The reinvigorated market for initial public offerings has sparked a rash of new filings by prominent companies that have been waiting for years for the chance to go public, setting the stage for potentially billions of dollars in IPOs by the end of the year.
So far in August, 11 companies have filed IPO prospectuses with U.S. regulators, including a few mega-deals, making it the busiest month for new filings since December 2007.
A rebound in the IPO market gathered steam in July, and 20 prospective deals have been filed in the past two months -- out of 31 filings so far in 2009, according to Thomson Reuters data.
The high-profile summer filings include private equity-owned discount retailer Dollar General Corp, which hopes to raise as much as $750 million, and energy company AEI, which is seeking up to $862.5 million.
The rash of filings is a sign that many companies could be gearing up to launch IPOs by December, given the standard three-month lag between filing and pricing an IPO, a banker said.
What's more, many companies, particularly those backed by private equity firms, which account for more than half the new filings this summer, want to take advantage of solid quarterly results published in July and the rising stock markets.
There is a lot of excitement in the private equity community about taking companies public, after two years when there was little opportunity to do so, said Tom Fox, head of global capital markets for the Americas at Swiss bank UBS.
Yet investors are likely to be more welcoming to larger share offerings, which are easier to unload if need be.
Investors are still going to migrate to larger companies that are more predictable and less volatile, Fox said.
The market's rebound has also attracted filings by a breadth of industries, including some that until recently were shunned by IPO investors.
For example, three retailers, including VS Holdings Inc, the parent of Vitamin Shoppe, have filed IPO prospectuses in recent weeks, and two banks, including Dallas-based Plains Capital Corp, filed for IPOs last week to pay back U.S. government bailouts.
And Hyatt Hotels Corp, part of a sector reeling from a drop in business travel and tourism, is seeking as much as $1.15 billion in an IPO.
Some IPOs may end up benefiting from investors' more bullish overall economic outlook, Fox said.
Nobody buys an IPO by looking in the rearview mirror -- they are looking out at the next one to three years, he said.
Adding to the tally of potential IPOs in the fall, a number of companies have recently updated existing filings, significantly changing the amounts of money they are applying to raise.
For example, Rio Tinto Plc's U.S. coal business, Cloud Peak Energy Inc, filed a new prospectus in early August, doubling the planned size of its IPO to $500 million.
In all, 41 IPOs in the pipeline are less than a year old, and therefore considered by bankers to be more likely to happen, with estimated proceeds totaling $12.3 billion.
Despite the recent spike in IPOs -- there have been 17 this year, all but one since April -- overall IPO volume in dollar terms is down about 80 percent from last year.
The new filings point to a potential total of 28 to 30 IPOs this year, meaning 2009 could end up matching 2008, at least in terms of number of deals, Fox said. He forecast a flow of two to three deals per week by spring.
(Reporting by Phil Wahba; editing by John Wallace)