THOMSON REUT.DR ADR (EACH REPR 6 ORD) 
By
All-time Record for Venture-backed M&A Exits; Nearly All Venture-backed IPOs
Trading Above Offer Price
New York, New York, April 1, 2010 - Venture-backed company exit activity showed
continued signs of life during the first quarter of 2010, with the best
quarterly total for venture-backed IPOs since the fourth quarter of 2007 and the
best quarter on record venture-backed M&A exits, according to the Exit Poll
report by Thomson Reuters and the National Venture Capital Association (NVCA).
The quarter ended with nine venture-backed Initial Public Offerings (IPOs) and
111 M&A transactions.
For the first quarter, 31 disclosed venture-backed M&A exits averaged $180.2
million, which was 21 percent higher than the total average disclosed
transaction value for all of 2009.
"The exit activity in first quarter of 2010 has engendered a cautious optimism
within the venture capital industry," said Mark Heesen, president of the NVCA.
"The IPO volume, while not nearly enough to declare a recovery, has shown the
most improvement since the financial crisis began and the pipeline of companies
in registration continues to build. The record breaking number of
venture-backed acquisitions is also encouraging as the quality of these
transactions appears to have held strong. It is premature to suggest we
have permanently turned the corner, but that corner is in sight and within reach
as long as we can continue this positive upwards trajectory over the next
consecutive quarters."
Venture-Backed Liquidity Events by Year/Quarter, 2004-2010
+------------+-------+----------+----------+---------+--------+--------+-------+
| | | | | | | |Average|
| | |M&A Deals | *Total |*Average | | Total | IPO |
| |Total | with |Disclosed |M&A Deal | | Offer | Offer |
| | M&A |Disclosed |M&A Value | Size |**Number| Amount |Amount |
|Quarter/Year| Deals | Values | ($M) | ($M) |of IPO's| ($M) | ($M) |
+------------+-------+----------+----------+---------+--------+--------+-------+
|2004 | 349 | 188 | 16,043.8| 85.3| 94 |10,481.6| 111.5|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2005 | 350 | 163 | 17,324.7| 106.3| 57 | 4,482.4| 78.6|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2006 | 377 | 164 | 19,034.8| 116.1| 57 | 5,117.1| 89.8|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2007-1 | 88 | 31 | 4,640.3| 149.7| 18 | 2,190.6| 121.7|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2007-2 | 90 | 37 | 3,912.1| 105.7| 25 | 4,146.8| 165.9|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2007-3 | 108 | 55 | 11,261.7| 204.8| 12 | 945.2| 78.8|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2007-4 | 93 | 45 | 9,645.8| 214.4| 31 | 3,043.8| 98.2|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2007 | 379 | 168 | 29,460.0| 175.4| 86 |10,326.3| 120.1|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2008-1 | 109 | 42 | 4,983.2| 118.7| 5 | 282.7| 56.6|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2008-2 | 87 | 27 | 3,321.2| 123.0| 0 | 0.0| 0.0|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2008-3 | 89 | 32 | 3,080.2| 96.3| 1 | 187.5| 187.5|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2008-4 | 66 | 18 | 2,390.9| 132.8| 0 | 0.0| 0.0|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2008 | 351 | 119 | 13,775.4| 115.8| 6 | 470.2| 78.4|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2009-1 | 64 | 15 | 666.0| 44.4| 0 | 0.0| 0.0|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2009-2 | 65 | 13 | 2,570.1| 197.7| 5 | 720.7| 144.1|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2009-3 | 69 | 23 | 1,392.4| 60.5| 3 | 572.1| 190.7|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2009-4 | 73 | 40 | 8,902.5| 222.6| 4 | 349.3| 87.3|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2009 | 271 | 91 | 13,531.1| 148.7| 12 | 1,642.1| 136.8|
+------------+-------+----------+----------+---------+--------+--------+-------+
|2010-1 | 111 | 31 | 5,586.6| 180.2| 9 | 936.2| 104.0|
+------------+-------+----------+----------+---------+--------+--------+-------+
Thomson Reuters & National Venture Capital Association
*Only accounts for deals with disclosed values
**Includes all companies with at least one U.S. VC investor that trade on U.S.
exchanges, regardless of domicile.
IPO Activity Overview
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. During the first quarter of 2009, no venture-backed
companies came to market with initial public offerings.
Three of the eight IPO exits for the quarter were in the Biotechnology sector,
accounting for a total of $310.5 million. Within this sector, Cambridge,
Massachusetts-based biopharmaceutical company, Ironwood Pharmaceuticals, raised
$187.5 million in the largest venture-backed IPO of the quarter.
QuinStreet Inc, a Foster City, California-based provider of electronic marketing
services began trading on February 11th and raised $150 million, contributing to
the $388.3 million raised in the Information Technology sector, the quarter's
largest industry, by value.
Venture-Backed IPO Industry Breakdown
+---------------------------------------+-------------------------------------+
| | Q1 2010 |
+---------------------------------------+------------------+------------------+
| | *Number of | Total |
| | Venture-Backed | Venture-Backed |
| Industry|IPO's in the U.S. |Offering Size ($M)|
+----------------+----------------------+------------------+------------------+
| |Internet Specific | 1 | 150.0|
| +----------------------+------------------+------------------+
| |Communications and | | |
| |Media | 2 | 148.1|
| +----------------------+------------------+------------------+
| |Semiconductors | 1 | 90.2|
| Information +----------------------+------------------+------------------+
| Technology |TOTAL | 4 | 388.3|
+----------------+----------------------+------------------+------------------+
| |Biotechnology | 3 | 310.5|
| +----------------------+------------------+------------------+
| Life Sciences |TOTAL | 3 | 310.5|
+----------------+----------------------+------------------+------------------+
| |Other Products | 1 | 127.2|
| +----------------------+------------------+------------------+
| |Consumer Related | 1 | 110.3|
| +----------------------+------------------+------------------+
| Other |TOTAL | 2 | 237.5|
+----------------+----------------------+------------------+------------------+
| TOTAL| 9 | 936.2|
+---------------------------------------+------------------+------------------+
*Includes all companies with at least one U.S. VC investor that trade on U.S.
exchanges, regardless of domicile
There were no initial public offerings by US venture-backed companies on a
foreign exchange in the third quarter.
Of the nine IPOs in the first quarter, eight were trading at or above their
offering prices as of 3/31/2010. Forty-three venture-backed companies are
currently filed for an initial public offering with the SEC.
Mergers and Acquisitions Overview
As of March 31, 2010, 111 venture-backed M&A deals were reported for the first
quarter 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. The life sciences sector saw the next highest level of activity
with 21 deals and a combined disclosed value of $2.9 billion, the largest
sector, by disclosed value.
Venture-Backed M&A Industry Breakdown
+----------------------------------------+-------------------------------------+
| | Q1 2010 |
+----------------------------------------+-----------+------------+------------+
| | | Number of | |
| | | Venture- | Total |
| | Number of |Backed M&A | Disclosed |
| | Venture- |deals with a| Venture- |
| |Backed M&A | disclosed |Backed Deal|
| Industry | deals | value | Value ($M) |
+---------------+------------------------+-----------+------------+------------+
| |Computer Software and | | | |
| |Services | 35 | 8 | 735.0|
| +------------------------+-----------+------------+------------+
| |Internet Specific | 26 | 6 | 432.6|
| +------------------------+-----------+------------+------------+
| |Computer Hardware | 7 | 3 | 954.0|
| +------------------------+-----------+------------+------------+
| |Communications and Media| 7 | 0 | 0.0|
| +------------------------+-----------+------------+------------+
| |Semiconductors/Other | | | |
| |Elect. | 6 | 2 | 130.8|
| Information +------------------------+-----------+------------+------------+
| Technology TOTAL | 81 | 19 | 2,252.4|
+---------------+------------------------+-----------+------------+------------+
| |Medical/Health | 13 | 5 | 1,760.3|
| +------------------------+-----------+------------+------------+
| |Biotechnology | 8 | 5 | 1,211.0|
| +------------------------+-----------+------------+------------+
| Life Sciences |TOTAL | 21 | 10 | 2,971.3|
+---------------+------------------------+-----------+------------+------------+
| |Industrial/Energy | 4 | 1 | 145.0|
| +------------------------+-----------+------------+------------+
| |Consumer Related | 3 | 0 | 0.0|
| +------------------------+-----------+------------+------------+
| |Other Products | 2 | 1 | 218.0|
| Non-High +------------------------+-----------+------------+------------+
| Technology |TOTAL | 9 | 2 | 363.0|
+---------------+------------------------+-----------+------------+------------+
| TOTAL| 111 | 31 | 5,586.6|
+----------------------------------------+-----------+------------+------------+
Source: Thomson Reuters & National Venture Capital Association
In the biggest venture-backed deal of the quarter, Ethicon Inc acquired
Acclarent, Inc, a Menlo Park, California-based developer of surgical devices for
$785 million. In the year's second biggest M&A deal, Windstream Corp acquired
NuVox Communications, Inc., a Greenville, South Carolina-based provider of
integrated communication services for $643 million in February.
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 returning less than the amount
invested accounted for 31 percent of the quarter's total, on par with total in
the previous quarter.
Analysis of Transaction Values versus Amount Invested
+----------------------------------------------------------+-----+------------+
| |Q409 | |
|Relationship between transaction value and investment |M&A**|Q1 10 M&A **|
+----------------------------------------------------------+-----+------------+
|Deals where transaction value is less than total venture | | |
|investment | 9 | 9 |
+----------------------------------------------------------+-----+------------+
|Deals where transaction value is 1-4x total venture | | |
|investment | 10 | 7 |
+----------------------------------------------------------+-----+------------+
|Deals where transaction value is 4x-10x total venture | | |
|investment | 11 | 9 |
+----------------------------------------------------------+-----+------------+
|Deals where transaction value is greater than 10x venture | | |
|investment | 8 | 4 |
+----------------------------------------------------------+-----+------------+
|Total Disclosed Deals | 38 | 29 |
+----------------------------------------------------------+-----+------------+
Source: Thomson Reuters & National Venture Capital Association
** Disclosed deals that do not have a disclosed total investment amount are
not included.
About Thomson Reuters
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Exchange. For more information, go to www.thomsonreuters.com
<http://www.thomsonreuters.com/>.
About National Venture Capital Association
The National Venture Capital Association (NVCA) represents more than 400 venture
capital firms in the United States. 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. According to a 2008 Global
Insight study, venture-backed companies accounted for 12.1 million jobs and $2.9
trillion in revenue in the United States in 2008. 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. For more information
about the NVCA, please visit www.nvca.org <http://www.nvca.org/>.
CONTACTS
Channa Brooks
Tenor Communications for NVCA
1.302.368.2345
channa@tenorcom.com
Daniel Billings
Thomson Reuters
1.646 223 5985
daniel.billings@thomsonreuters.com
[HUG#1400184]
Press Release (PDF): http://hugin.info/142273/R/1400184/355579.PDF THOMSON REUT.DR ADR (EACH REPR 6 ORD) : Venture-Backed Exit Activity Shows Improved Signs of Life in Q1 2010
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