Private equity-backed initial public offerings (IPOs) in the usa are expected to make a comeback.

A new analysis from data provider PitchBook shows that last year, the exit value of companies backed by acquisition companies in the usa was only 8.7 billion dollars, far below the pre-pandemic average of 45.1 billion dollars. Factors affecting the entire IPO market—high interest rates, macroeconomic uncertainty, and rising geopolitical risks—have created a challenging environment for private equity-backed companies.

However, now, with the USA stock market reaching new historical highs and the macroeconomic environment improving, the exit prospects have become more optimistic. PitchBook has listed 50 private equity-backed companies that are preparing for IPOs on USA exchanges next year, among which the selected companies are large enough to fit the public market, have recently submitted IPO applications or are under preparation, and have been on the books of acquisition firms for a long time.

Tim Clarke, Chief Private Equity Analyst at PitchBook, stated: "Stock prices at historical highs create a halo effect, and we fully expect 2025 to be another year of recovery."

In fact, the recovery has already begun. PitchBook's data shows that this year, there have been 30.5 billion USD in private equity-backed IPO exits, raising 6 billion USD. In just the third quarter, there were five exits through IPOs, including Ingram Micro (INGM.US) backed by Platinum Equity and KinderCare Learning Companies (KLC.US) backed by Partners Group.

PitchBook's analysis of private equity-backed companies that may apply for an IPO next year includes several factors. One key factor that indicates listing potential is the amount of time the company has been owned by the acquiring company. Generally speaking, private equity firms hold onto a company for five to seven years. The optimal time for an IPO is usually between the third and fifth year.

Notably, among the companies listed by PitchBook, 19 have publicly applied for an IPO in recent years. This includes UST, which is backed by Temasek Holdings Pte, and Panera Bread Co., which is supported by JAB Holding Co.

Other factors include a large employee base and attractive growth signs. Clarke mentioned that unlike in 2021, when many small and troubled companies went public, the scale and quality of companies this time are critical.

He stated, "You need to have enough trading volume, positive cash flow, and a good revenue and profit growth trajectory." He added that his team looks for larger companies and considers employee growth as one of the indicators.

In terms of employee growth, some of the largest companies likely to apply for an IPO next year include Inspire Brands Inc., supported by Roark Capital Group, and Allied Universal Security Services LLC, backed by Caisse de dépôt et placement du Québec.

Compilation data shows that, so far this year, usa companies have raised 40.6 billion dollars, exceeding 25.4 billion dollars during the same period last year.

David DiPietro, head of private equity at T. Rowe Price, stated, "After a long period without companies seeking to go public, there really is a feeling that supply has finally emerged. In recent weeks, there has certainly been an increase in activities around testing the waters meetings, which is a significant shift compared to a few months ago."

Editor/rice