Follow-on offerings, a subsequent issuance of stock after a company has gone public, are simpler than IPOs and generate lower fees. LinkedIn, for example, spent an estimated $1.5 million in legal fees for its May IPO and $225,000 for its November follow-on offering. Wilson Sonsini Goodrich & Rosati advised LinkedIn on both.
But opportunities for work are more plentiful with follow-ons. Some 268 U.S. companies filed follow-on offerings in the fourth quarter of 2011, compared to 68 IPOs during the same period, according to data from IPO Monitor, a Web site that tracks IPOs and other equity offerings. (The number of follow-on offerings was slightly less in 2011 than 2010.) Energy and life science companies dominated the 80 follow-on offerings worth more than $100 million last fall, so it’s not surprising that Vinson & Elkins and Cooley, with their strong client bases in those areas, respectively, were the busiest advisers during the period.
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