Energy IPOs Poised to Heat Up in 2012

Debra Borchardt

12/23/11 - 07:00 AM EST

NEW YORK (TheStreet) -- The IPO calendar for first quarter of 2012 is shaping up to be a busy one for energy companies.

The fourth quarter saw 38 companies file to go public. Energy companies lead the group with eight new issuers followed by seven filings for consumer companies. The health care and financial services sectors each saw six filings.

Right now there are 200 companies are in the pipeline, the largest amount since 2000, with four sectors accounting for 68% of the volume: Industrial, technology, energy and financial services.

"The backlog of companies waiting to access the capital markets may lead to a significant increase in pricings in 2012 as the markets gain more momentum," said Henri Leveque of PriceWaterhouseCoopers.

The amount of funds raised by private equity-backed IPOs more than doubled in 2011 to $20.4 billion from 2010's activity, according to Renaissance Capital. Despite that jump, the deal flow is still below the levels seen in the 2004-2007 boom. Renaissance Capital lists the following as the most notable IPOs in the private-equity pipeline:

Venture-backed activity is also down from the peak of 2007 when the group sold new stock worth $9.7 billion. In 2011, the total came in at $7.9 billion on 51 deals. Renaissance Capital lists the following as the most notable IPOs in the venture pipeline:

"We are constantly talking to companies, those that are on file as well as those that are preparing to file and we expect that by the middle of January there will be companies on the road and we'll have pricings in late January through the balance of the first quarter," said Bob McCooey, head of new listings at the Nasdaq exchange. "So, it will be a very active first half of the year as far as we can."

McCooey joked that it would be a challenge to book all the bell ringing ceremonies for the new companies. He said that alternative energy will be a big sector for the exchange, specifically mentioning biofuels, algae, grid management, wind and solar.

Scott Cutler of the NYSE Euronext agrees that energy will be a big group, but he also expects to see financial services well represented in the IPO market.

"I believe Carlyle will be hotly anticipated," he said. He added that four states account for much of the backlog in the IPO market, California, New York, Texas, and Illinois. California tends to deliver the tech companies, whereas New York is concentrated in financial and Texas is predominantly energy.

Cutler said he is also encouraged to see so many large deals coming out of Europe, and that Latin America and China remain fairly active.

For example Michael Kors(KORS), which is based in Hong Kong, recently made its debut on the New York Stock Exchange. The stock priced at $20 and closed Thursday at $27.27, an increase of more than 35%.

Renaissance Capital also said there is an equally large shadow pipeline of companies that haven't filed, but are rumored to be entering the public market in 2012. Facebook, Living Social and Gilt Group are all mentioned as potential hot offerings for next year.

There are also large private equity deals like Hilton and Nieman Marcus that are rumored to be prepping their S-1 filings.