This edition of the Conyers Bermuda Public Companies Update summarises significant transactions involving Bermuda companies listed on the New York Stock Exchange and Nasdaq in the second half of 2023.
Global Market Update
The latter half of 2023 brought some comfort to market watchers: inflation slowed, the steady rise in interest rates stabilised, and the economic recession widely-projected earlier in the year appears likely to be averted. Despite these macro improvements, movement in developed markets remained subdued.
The international Initial Public Offering market was quiet overall in 2023. Global IPO volume declined by 8%, and proceeds by 33%. In the US, IPO numbers still fell short of previous years, but showed improvement from 2022’s market plummet. Aggressive monetary policies were a key contributor to the decline in IPO volume: the US has witnessed eleven rate increases since 2022, though this approach has now slowed.
Overall, prominent IPOs were few and far between in 2023. Approximately 70% of US IPOs raised less than US$25 million (a notable departure from the previous decade’s average of around 10%). In September, the high-profile IPOs of Arm Holdings (Nasdaq:ARM) and Instacart (Nasdaq:CART) were strong debuts to the market, but both went on to experience substantial revenue declines after their initial highs. The year closed with a generally dampened performance, with the significant drop in valuations generally discouraging potential issurers’ plans to go public.
Global merger and acquisition activity also fared poorly against the headwinds of 2023, falling to a 10 year low with an estimated 20% decrease from 2022 to a total value of US $3 trillion.
As with the capital markets, some cautious optimism for 2024 is provided by cooling inflation and greater interest rate stability, particularly when considered together with pent-up demand and the ongoing attractiveness of business combinations as a corporate growth strategy. We share your interest and will diligently observe developments in this space.