Helpful Assistant in IPO Abroad
Chinese companies are actively going public in the U.S. market recently. Overall, economies in countries worldwide are recovering gradually, although the European debt crisis disturbed the global markets in the first two quarters of 2010, during which the global stock markets performed weakly. In the third quarter, a slew of positive news led a bounce back of these markets. As a result, a US IPO of Chinese company are robust.
According to research conducted by Zero2IPO, the destinations where Chinese private companies went public have become more concentrated in fewer markets. Specifically, 106 companies went public in HKSE, NASDAQ, NYSE, etc., for a combined total value of $26.52 billion. Among these 18 firms got listed on the NYSE and NASDAQ, with values of $1.96 billion and $1.07 billion respectively, representing 7.4% and 4.1% of the total market value respectively.
Because of the capital markets’ recently strong performance, the number of Chinese private companies going public in the U.S. market has peaked. In the fourth quarter of 2010, 12 Chinese private companies succeeded in going public in the U.S. market, with a combined total value of $1.48 billion. This is the largest amount, both in the number of companies and the total financing amount, the U.S. market has ever seen. More and more American investors are becoming interested in Chinese concept stocks. At the same time, more and more legality disputes related to financial reports are being reported. Thus, whether a Chinese company employs a professional accounting firm (like the Big Four) has become a standard used by American investor to judge the quality of U.S.-listed Chinese firms. The merging of Marcum LLP and Bernstein & Pinchuk LLP followed this trend and the demand by American investors.
Marcum LLP, one of the largest independent public accounting and advisory services firms in the nation, and Bernstein & Pinchuk LLP have merged their China practices to create Marcum Bernstein and Pinchuk LLP, effective January 1, 2011. As a result of the merger, China-based, middle-market, publicly-traded companies or those undergoing transitions to U.S. stock exchanges now have access to the greatest depth of localized SEC expertise, integrity and resources through more than 75 highly qualified, US GAAP and SEC trained professionals in China. The firm has offices in Beijing, Guangzhou, Hangzhou and Shanghai, with coordinated services throughout the world. Terms of the deal were not disclosed.
“Expanding Marcum’s international footprint throughout China is a significant opportunity for our firm. Middle-market companies now have access to the capabilities and credibility that our Top 10 SEC practice brings, with unparalleled localized insights into Chinese culture and business practices,” said Jeffrey M. Weiner, Managing Partner of Marcum LLP. “There is a clear absence of firms like ours in China for U.S.-listed companies that Marcum Bernstein and Pinchuk is now best positioned to fill, with the same level of integrity, expertise and personalized service all of our clients receive and deserve.”
“We continue to see an increasing trend of Chinese companies that are looking to the U.S. markets to raise capital and are excited to offer our combined solution to the Chinese marketplace,” said Drew Bernstein, co-managing partner of Bernstein & Pinchuk. “Over the past 10 years, we have developed a top-quality team in China, building an extensive local presence and deep relationships with companies that look to us to deliver the highest standards in auditing services and transactional support. By adding the capabilities and resources of Marcum, we have the ability to ensure our clients receive an even greater level of service and support.”