((Automated translation by Reuters using machine learning and generative AI, please refer to the following disclaimer: https://bit.ly/rtrsauto)) (Adds contextual information, details and quotes from interviews from paragraph 4) by Arasu Kannagi Basil
Lincoln International LCLN.N hit a valuation of $2.3 billion after its shares rose 12.6% in their New York debut on Wednesday, as investors flocked to a rare opportunity to acquire shares in a US investment bank.
The Chicago, Illinois-based company’s stock opened at $22.51, above the offering price of $20. Lincoln and the selling shareholders sold 21 million shares at the high end of the $18 to $20 per share range to raise $421 million in the IPO.
Investment bank IPOs in New York have been rare over the past decade, with some specialist advisory firms opting to sell before reaching the size needed to go public.
“Our market continues to consolidate. As we consider the next stage of our company’s evolution, we believe that having a permanent capital base will allow us to participate in this consolidation more effectively and efficiently,” Rob Brown, Lincoln’s chief executive, told Reuters.
The listing marks an important milestone for Lincoln, which has been considering an IPO for some time. The company had filed a confidential application in 2022 and was waiting for the right time to launch after 2022’s inflation surge pushed up interest rates.
Lincoln’s $421 million public offering is the largest IPO by a U.S. investment bank since Lazard’s
LAZ.N ($855 million) in 2005, according to data compiled by LSEG.
The investment banks Moelis MC.N and Houlihan in Lokey
HLI.N went public in New York through traditional IPOs in 2014 and 2015, respectively.
FOCUS ON PRIVATE CAPITAL MARKETS
Founded in 1996, Lincoln is a mid-sized investment bank specializing in private capital markets. It has grown over the last 30 years, from a team of four people to more than 1,400 employees spread across 14 countries.
Lincoln expects private equity to remain an important growth driver, with sponsors having high levels of available cash and coming under increasing pressure to return more cash to investors.
Bankers are optimistic that the deal recovery will extend to the mid-market segment, as sponsors seek a return on investment from their portfolio companies after years of subdued activity.
“This ice dam is melting. It really started to melt in the second half of last year. We think this melting will continue for the foreseeable future,” Brown said.
Lincoln advised on several recent transactions, including the $9.25 billion sale of Madison Industries’ Filtration Group division to Parker-Hannifin
PH.N annoncée l’année dernière.
The firm also advised NSI Industries on its $3 billion sale to Hubbell
HUBB.N, announced at the beginning of the month.
In recent years, Lincoln has acquired consulting firms Spurrier Capital Partners, TCG Corporate Finance and MarshBerry, strengthening its presence in financial services and technology.
Energy and real estate are the two main verticals in which Lincoln aims to deepen its coverage, Brown said, noting that the company is discussing potential acquisitions in those areas.
