Two separate reports were released this morning, both bringing upbeat news of increased exit activity (M&A, IPOs) for venture-backed companies in the first quarter of 2010.
We take a look at the most important findings for both the Exit Poll report by Thomson Reuters and the National Venture Capital Association, and Dow Jones VentureSource’s assessment of IPO and M&A activity in the U.S. during the first three months of this year.
Title: U.S. Venture-Backed Company IPOs in First Quarter Match 2009 Total; M&A Deal Activity Flat as Median Paid Picks Up
Subtitle: M&As and IPOs of VC-Backed Companies Net $4.7B in Q1; Time to Reach M&A Still Low as Investors Sell Companies Earlier
Q1 2010 according to Dow Jones VentureSource:
- Eight U.S. venture-backed companies raised $711 million by going public on U.S. stock exchanges, matching the number of IPOs that occurred throughout 2009.
- It took companies that went public during the first quarter a median of 10.4 years and $156 million in venture capital to achieve liquidity.
- This is more than the median 7.9 years and $32 million in capital it took for companies to reach an IPO in 2009.
- Corporations bought 77 companies for $4 billion through mergers and acquisitions (M&As), on par with the 77 deals that raised $3.4 billion during the same period last year and a far cry from the 109 deals completed during the first quarter of 2008.
- The $27 million median amount paid for a venture-backed company in the most recent quarter is a 17% increase from the $23 million median paid during the same period in 2009.
- It took a median of 5.4 years for a venture-backed company to reach liquidity via a merger or acquisition, 15% more than the 4.7-year median in the first quarter of 2009, but still less than the medians seen during the same period in 2007 and 2008, 6.1 and 6.6 years respectively.
- Companies that exited during the first quarter raised a median of $19 million in venture capital before exiting through a merger or acquisition, a 19% increase from the $16 million median during the same period last year.
Title: Venture-Backed Exit Activity Shows Improved Signs of Life in Q1 2010
Subtitle: All-time Record for Venture-backed M&A Exits; Nearly All Venture-backed IPOs Trading Above Offer Price
Q1 2010 according to Thomson Reuters / NVCA:
- The quarter ended with nine venture-backed IPOs and 111 M&A transactions.
- There were nine venture-backed IPOs valued at $936.2 million in the first quarter of 2010 quarter of 2009, more than double the amount raised during the fourth quarter of 2009.
- Of the nine IPOs in the first quarter, eight were trading at or above their offering prices as of 3/31/2010.
- Three of the eight IPO exits for the quarter were in the Biotechnology sector, accounting for a total of $310.5 million.
- Forty-three venture-backed companies are currently filed for an initial public offering with the SEC.
- 111 venture-backed M&A deals were reported for the first quarter, 31 of which had an aggregate deal value of $5.6 billion.
- The average disclosed deal value was $180.2 million.
- This marks the biggest quarter for overall number of venture-backed M&A exits since records began in 1975.
- The information technology sector led the venture-backed M&A landscape, with 81 deals and a disclosed total dollar value of $2.3 billion.
- Within this sector, computer software and services and internet specific companies accounted for the bulk of the targets, with 35 and 26 transactions, respectively, across these sector subsets.
- Deals bringing in the top returns, those with disclosed values greater than four times the venture investment, accounted for 45 percent of the total in the first quarter of 2010.
- Venture-backed M&A deals returned less than the amount invested accounted for 31 percent of the quarter’s total, on par with total in the previous quarter.
And here’s a bonus report: JEGI’s Q1 2010 M&A Results – Deal Activity and Transaction Value Up (PDF)
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The National Venture Capital Association (NVCA), comprised of more than 450 member firms, is the premier trade association that represents the U.S. venture capital industry. NVCA’s mission is to foster greater understanding of the importance of venture capital to the U.S. economy, and support entrepreneurial activity and innovation. The NVCA represents the public policy interests of the venture capital community, strives to maintain high professional standards, provides reliable industry data, sponsors professional development, and facilitates interaction among its members.
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