Merrill Lynch has bumped Goldman Sachs from the No 1 spot on an annual ranking of US IPO bookrunners. Goldman, placing first last year, is now in third place for 2007, while Merrill narrowly beat Morgan Stanley for the top honour.
The rankings, which exclude "blank check" and real estate investment trust offerings and were compiled by data tracker Dealogic, measure deal value divided among bookrunners.
Merrill placed first based on its involvement in 47 deals, or about 14 percent of all IPOs on the Nasdaq or New York Stock Exchange this year, for a total of $7.23 billion, according to Dealogic.
Merrill and other top underwriters have done well as IPO activity surged. Total new issues in the US stood at 234 for 2007, an 18 percent jump over the prior year, and making it the busiest year for new issues since 2000, according to research firm Renaissance Capital's IPOhome.com.
In 2006, Goldman earned top spot after being bookrunner on 35 deals, including the year's largest IPO, MasterCard's $2.4 billion deal. Morgan Stanley earned second place as bookrunner on 49 IPOs, worth a proportionate $7.22 billion.
Morgan Stanley's share of the US IPO market was about equal with Merrill's at 14 percent. Morgan Stanley, along with Citigroup, led the year's biggest deal, Blackstone Group's $4.1 billion IPO in June.
Goldman secured third place by being bookrunner on 36 US IPOs for a value of just over $5 billion. After Goldman, J. P Morgan ranked fourth in the 2007 US IPO bookrunner rankings, followed by Lehman Bros, Credit Suisse, UBS, Citigroup, Deutsche Bank and Banc of America.
The bookrunner rankings paint a picture of which banks attracted the biggest deals in 2007, and consequently the highest fees. In addition to fees earned on each deal, over-allotment options for up to 15 percent of the total float can also prove lucrative for underwriters. But clients shopping for a bookrunner to handle their next deal will be drilling down to look at a number of factors, said Scott Sweet, managing director of research firm IPOboutique.com.
"They would likely choose based on analyst coverage in that area, prior underwriting (history), and performance," he said. Based on performance, a handful of 2007's best deals were managed by underwriters too small to make it into the "Top Ten" bookrunners list.
CIBC World Markets, J. P Morgan, Goldman Sachs, BMO Capital Markets, Citigroup, Westpark Capital, Piper Jaffray, Credit Suisse and William Blair were the bookrunners on the year's 10 best performing IPOs year-to-date, according to research on Renaissance Capital's IPOhome.com. At the top of the list was Chinese solar company JA Solar Holdings, a deal led by CIBC, which ended the year as the best performing new issue, rising 380 percent since its February IPO.
Visa Inc, which plans an IPO to raise up to $10 billion and list its shares on the New York Stock Exchange in coming months, has named eight bookrunners, including Morgan Stanley, Goldman Sachs, Banc of America, Citigroup, HSBC, Merrill Lynch, UBS and Wachovia. And private equity giant Kohlberg Kravis Roberts & Co's has filed for an offering to raise up to $1.25 billion.
KKR, one of the oldest and largest leveraged buyout firms, announced its IPO plans in July but has yet to specify how many common units it will sell, the expected price range for those shares, or any other indications of when, or if, its offering will proceed.