Bigger and Better IPOs on Tap for 2011

2011 could shape up to be a big year for IPOs but it's got a tough act to follow.

In 2010, 478 companies went public, a concrete sign of recovery for the market, although still below the peak in 2007 of 555 deals. Paul Bard of Renaissance Capital believes the number of offerings will increase in 2011 since many private equity deals have been waiting for the market to improve.

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He expects to see several multi-billion dollar debuts in 2011 compared to the single billion dollar deal of General Motors (GM) in 2010.

An early debut could be Nielsen Media, which is expected to begin marketing efforts in the next couple of weeks. Nielsen is famous for its TV audience measurements and it's expected to seek to raise about $2 billion.

Renaissance Capital thinks a successful offering by Nielsen could set the stage for another giant IPO, HCA, which is expected to seek $4.6 billion. Toys "R" Us could also potentially go public again as its turnaround shapes up.

In addition, the excitement generated by Goldman Sach's (GS) investment into Facebook could inspire other online media companies to make their move. Bard believes this crop of companies is unlike the tech bubble in the past.

"Where we are today in the IPO market from a quality perspective is light years away from where we were in the tech bubble," he says. "Many of these companies not only are they fast growing, but they're profitable."

Bard also feels that secondary exchange trading of private shares has delayed the inevitable offerings of certain social media darlings but that 2011 could be the year they come to market.

Nielsen Media

Nielsen Holdings' two main sources of income are measuring media audiences and consumer purchases.

The company booked sales of $4.9 billion for the 12 months ended March 2010. Nielsen filed with the Securities and Exchange Commission in June 2010 to raise $1.75 billion in an offering, and it plans to use at least part of the proceeds to repay its $8.7 billion in outstanding debt.

JP Morgan (JPM) and Morgan Stanley (MS) are the lead underwriters, and marketing is expected to begin in the next couple of weeks.

HCA

HCA is the largest private hospital operator in the US, although it traded publicly from 1992 to 2006. In a massive $32 billion leveraged buyout, a group of private equity firms including Bain Capital and KKR (KKR), acquired the hospital and took it private.

HCA reported annual sales of $30.2 billion when it filed for a $4.6 billion offering in May. The proceeds from the deal will be used to pay down debt.

Bain and KKR each have a 25% stake and the company has a debt hangover of $27 billion. BofA (BAC), Merrill Lynch (MER), Citigroup (C) and JP Morgan are the lead underwriters.

Toys "R" Us

Toys "R" Us has a similar story to HCA. The category killer in toy stores traded publicly until Bain Capital, KKR and Vornado Realty Trust (VNO) bought the company for $6.6 billion in 2005.

Since returning to the private ranks, the company has grown its online businesses and streamlined stores. Toys "R" Us also filed to return to the public markets in May. It plans to seek $800 million, an amount that would qualify as the largest retail IPO in almost 15 years.

If Toys "R" Us is successful, it would eclipse Dollar General's (DG) $716 million offering in November 2009. The company plans to use the proceeds to pay down debt. Bard thinks the company is waiting on January 2011 sales results before it puts the wheels into motion for the offering.

LinkedIn

LinkedIn is rumored to be anxious to hit the market. It would be ideal for the business connection Web site to get out ahead of any Facebook deal while also riding the coattails of the Facebook valuation frenzy.

According to SharesPost, LinkedIn has a value of $2.12 billion. Tiger Global reportedly took a $20 million stake with a purchase of 1% of the company at roughly $21.50 a share.

The latest transactions on the site suggest a share price of $23.Reuters reported that LinkedIn has chosen Bank of America, Morgan Stanley and JPMorgan as its bankers, but the company hasn't filed a prospectus with the Securities and Exchange Commission as yet.

Zynga

Zynga is known for creating some of the hottest games on social media sites like Facebook, including Farmville, Mafia Wars, Texas Hold'em. The company makes money by selling virtual goods for use in the games.

In 2009 TechCrunch reported the company's annual revenue could be more than $100 million, while Bloomberg estimated its annual revenue at $500 million in 2010.

Tiger Global has also invested in Zynga, along with Digital Sky Technologies, the Goldman Sachs/Facebook partner. The concern about Zynga is the faddish quality of games. Farmville has already seen its users drop from 84 million to 53 million.

Electronic Arts (ERTS) has suffered over the past year as it rehashes updates of previous winners and it's been forced to lay off employees.