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September 27, 2023

Which Firm Had the Most IPO Audit Clients In Q4 2022?

The fourth quarter of 2022 didn’t miraculously save what was a terrible year for initial public offerings. There were 20 IPOs during the last quarter of the year which raised a combined total of $1.9 billion, according to a new analysis from Audit Analytics. That is down significantly from Q4 of 2021, when 265 companies went public and raised a total of nearly $66.1 billion. And Q4 of 2022 had the second lowest number of listings recorded (after 2010) since Q1 2016, which had only 14 IPO listings.

In total, the Nasdaq and NYSE exchanges saw only 191 IPOs in 2022, according to Audit Analytics. Together, these companies raised a little more than $21.5 billion, an average of $112.9 million per offering. Total IPOs reached a five-year low in 2022, dropping 81.9% from the previous year, and gross proceeds also dropped by 93.6% from 2021the lowest seen over the five-year period.

The fourth quarter continued the trend in 2022 of traditional IPOs outnumbering those done via a special-purpose acquisition company (11 vs. nine). Of the 191 IPOs in 2022, 104 were traditional listings while 87 were SPACs. Audit Analytics said:

The number of SPAC IPOs has spiked significantly over the past two years. The fiscal year (FY) 2020 saw a 320% increase in SPAC IPOs, followed by another 147% increase in FY 2021. However, in 2022 SPAC IPOs decreased for the first time over the five-year period, dropping 85.8% from FY 2021.

Skadden, a law firm that specializes in mergers and acquisitions law, said the slowdown in SPACs last year can be attributed to several factors, including disappointing performance by newly de-SPACed companies, rising inflation, macroeconomic uncertainty, and increased regulatory scrutiny.

So which firms audited the 20 IPOs in Q4? UHY led the market share with four IPO clients, raising $230 million in total, Audit Analytics said. Marcum and PwC followed with two clients each. PwC’s clients raised the most with $269 million in gross proceeds.

PwC led the traditional IPO market share with two clients, followed by nine firms with one each. The firm that was involved in the most IPO audits in 2022 was Marcum with 43 clients, representing 22.5% of the market share. Friedman was second with 18 clients at just over 9% of the market share. Following Friedman’s merger with Marcum in September, 15 of Friedman’s IPO clients are currently being audited by Marcum. In total, the top 10 audit firms made up 67.5% of the IPO audit market share in 2022.

Excluding SPACs, PwC had the most IPO audit clients with 11, and PwC’s clients also raised the most, with nearly $3.2 billion in gross proceeds total. Marcum and Friedman tied for second with nine traditional IPO clients each. Although Deloitte ranked fourth, their clients accumulated the second-highest gross proceeds at $1.7 billion.

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