2009 Starts Like a Lamb, Ends Like a (Small) Lion
By David Feldman at 20 January, 2010, 9:14 am
The Reverse Merger Report provided its annual “year in review” in its new edition on January 14. For the most part 2009 is a year most of us hope to forget. The number of reverse mergers declined about 11%, with 187 reverse mergers being completed vs. 211 transactions in 2008. Plus the total value of transactions was down markedly, about $1.9 billion in 2009 vs. $9 billion in 2008.
The somewhat good news is that the fourth quarter of 2009 showed some real strength. There was a low of just nine deals in April and just 41 deals in the second quarter. In the last quarter there were 60 deals. Indeed, the RMR indicated that there have been steady increases in both the number of deals and average deal size through the year. There were fewer Chinese deals in 2009 than 2008 (45 vs. 68). But all the numbers were up in the fourth quarter.
In the meantime, the IPO market also has woken up. There were 63 IPOs in 2009, though the average IPO size was $348 million (but this was against $650 million in 2008). But considering at the height in the late 1990s there were about 400 IPOs, it appears that IPO alternatives continue to be the most available avenue for companies below $300 million in value. And 187 reverse mergers vs. 63 IPOs bodes well for the increasing popularity and utility of these techniques.
Go 2010!
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