Lincoln International (LCLN.N) reached a valuation of $2.3 billion after its shares surged by 12.6% during its New York Stock Exchange debut on Wednesday, with investors seizing the rare opportunity to acquire shares of an American investment bank.
The Chicago, Illinois-based company opened at $22.51, above the offering price of $20. Lincoln and selling shareholders sold 21 million shares at the top end of the $18 to $20 per share range to raise $421 million during the IPO.
IPOs of investment banks in New York have been rare in the last decade, with some specialized advisory firms opting to sell before reaching the necessary size to go public.
“Our market continues to consolidate. As we think about the next stage of our company’s evolution, we believe having a permanent capital base will allow us to participate in this consolidation more effectively and efficiently,” Reuters’ Rob Brown, Lincoln’s CEO, said.
This listing marks a significant milestone for Lincoln, which had been considering an IPO for some time. The company had filed a confidential request in 2022 and waited for the right moment to launch after the 2022 inflation spike pushed interest rates up.
Lincoln’s $421 million public offering is the largest IPO for an American investment bank since Lazard’s ($855 million) in 2005, according to data compiled by LSEG.
Investment banks Moelis (MC.N) and Houlihan Lokey (HLI.N) went public in New York through traditional IPOs in 2014 and 2015, respectively.
Founded in 1996, Lincoln is a mid-sized investment bank specializing in private capital markets. It has grown over the past 30 years from a team of four to over 1,400 employees in 14 countries.
Lincoln expects private equity to remain a significant growth driver, with sponsors having high levels of available liquidity and facing increasing pressure to return more liquidity to investors.
Bankers are optimistic about the recovery of transactions in the mid-market segment, as sponsors seek returns on their portfolio companies after years of moderated activity.
“This ice dam is melting. It really started melting in the second half of last year. We believe this melting will continue in the foreseeable future,” Mr. Brown said.
Lincoln has advised on several recent transactions, including the $9.25 billion sale of Madison Industries’ Filtration Group to Parker-Hannifin (PH.N) announced last year.
The company also advised NSI Industries on its $3 billion sale to Hubbell (HUBB.N) earlier this month.
In recent years, Lincoln 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, Mr. Brown said, adding that the company is discussing potential acquisitions in these areas.
