Omnia CEO Steven Wagner Comments to Private Equity News
In the current competitive market, companies are increasingly using secret stock market fillings as a way to bump up their valuations and barter for higher prices from investors, according to a recent report by Private Equity News.
“The number of confidential initial public offerings that are withdrawn in favour of an M&A transaction is rising as companies strive to boost their valuations before off-loading their stakes or selling out to private equity funds or trade buyers,” the publication states. They cite the fact that, according to the research firm Dealogic, of the 136 companies that have lodged secret IPOs as of early O
ctober of this year, 23, or nearly 17%, have pulled back their registration statements – a 14% increase from the prior year.
Omnia CEO Steven Wagner recently commented to Private Equity News on the increased use of secret IPOs to boost sale valuations, cautioning that sometimes target companies inflate their valuations through non-public IPO filings. “The industry is always about copying someone else’s success: it’s really up to the private-equity firms, the ultimate buyers, to be able to resist paying higher prices and negotiate better terms,” he said, adding that activist investors will “push for any strategy” to raise valuations of companies they invest in if a sale is in the cards.
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