By Arasu Kannagi Basil
May 20 (Reuters) – Lincoln International notched a $2.3 billion valuation after shares gained 12.6% in their New York debut on Wednesday as investors snapped up a rare opportunity to buy equity in a U.S. investment bank.
The Chicago, Illinois-based firm’s stock opened at $22.51 apiece, above the offer price of $20. Lincoln and selling stockholders sold 21 million shares at the top of the marketed range of $18 and $20 each to raise $421 million in the IPO.
Investment bank IPOs in New York have been scarce over the past decade or so, with some boutique advisory firms choosing to sell themselves before reaching the scale needed to go public.
“Our market continues to consolidate. As we think about the next evolution of our firm, we think having a permanent capital base will allow us to participate in that consolidation in more effective and efficient ways,” Lincoln CEO Rob Brown told Reuters.
The listing marks an important milestone for Lincoln, which has been looking to going public for some time. The firm confidentially filed in 2022 and waited for the right moment to pull the trigger after the 2022 inflation spike drove up interest rates.
Lincoln’s $421 million offering is the biggest U.S. investment bank IPO since Lazard’s $855 million listing in 2005, according to data compiled by LSEG.
Boutique banks Moelis and Houlihan Lokey listed in New York through traditional IPOs in 2014 and 2015, respectively.
PRIVATE CAPITAL MARKETS FOCUS
Founded in 1996, Lincoln is a private capital markets-focused mid-market investment bank. It has scaled over the last 30 years, growing from a team of four to over 1,400 people across 14 countries.
Lincoln expects private equity to remain an important growth engine, with sponsors sitting on elevated levels of dry powder and mounting pressure to return more cash to investors.
Bankers are optimistic the dealmaking resurgence will broaden out to the mid-market space as sponsors seek return on their portfolio companies after years of muted activity.
“That ice dam is melting. It really started to melt in the back half of last year. We think that melting is going to continue really for the foreseeable future,” Brown said.
Lincoln has advised on a number of recent deals, including the $9.25 billion sale of Madison Industries’ Filtration Group to Parker-Hannifin announced last year.
It also advised NSI Industries on its $3 billion sale to Hubbell announced earlier this month.
In recent years, Lincoln bought advisory firms Spurrier Capital Partners, TCG Corporate Finance and MarshBerry, bolstering financial services and technology coverage.
Energy and real estate are the two largest verticals where Lincoln aims to deepen its coverage, Brown said, noting the firm was discussing potential acquisitions in those areas.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Joyjeet Das and Shilpi Majumdar)
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