The IPO Window Is Open –

The IPO market continued to open in Q2 2004, but buyout-backed offerings were few and far between.

A total of just six buyout-backed companies began trading on U.S. exchanges last quarter, raising $941.7 million. Such figures compare poorly to both Q1 2004 and Q4 2003 data, in which 13 companies raised $2.83 billion and 14 companies raised $2.68 billion, respectively. In fact, the last time that buyout-backed IPOs raised less quarterly capital was in Q2 2003, when not a single offering priced.

For those buyout-backed companies that did begin trading, the experience rarely lived up to expectations. Just one of the six companies CB Richard Ellis Group Inc. (NYSE: CBG) raised in excess of its original target capitalization, while the other five all raised less. InfraSource Inc. (NYSE: IFS), for example, filed to raise $287.5 million, but only ended up with $111.8 million. Xyratex Group Ltd. (Nasdaq: XRTX) had a similar story, as its $136 million filing price was whittled down to just $97.4 million.

The group has split its aftermarket performance, with three buyout-backed companies trading above their IPO offering price, and the other three trading below. Global Signal Inc. (NYSE: GSL) has been the biggest aftermarket gainer, with an $18 offering price and a $22.70 stock price as of market close last Tuesday. The worst aftermarket performer has been Xyratex, which priced at $14 per share and closed trading last Tuesday at $11.90 per share.

On a positive note, underwriters filled the buyout-backed IPO pipeline, as 22 such companies filed registration papers with the SEC. The largest proposed deal is a $700 million offering from Xerium Technologies Inc., which is followed closely by proposed $625 deals from Kindercare Learning Centers Inc. and UAP Holding Corp.