Venture-backed IPOs and M&A activity decline in value

Reuters

By Sarah McBride

SAN FRANCISCO, Oct 1 (Reuters) - Average sizes of bothinitial public offerings and acquisition prices dropped forventure-backed companies last quarter as some companies battleda tough environment in their sector and others faced outsizedcomparisons from a year earlier.

Data from the National Venture Capital Association andThomson Reuters showed 26 venture-backed companies held IPOslast quarter, more any quarter since the final three months of2010, but the average offer amount dropped by 10 percent from ayear ago to $103 million.

Most of the IPOs were in the life-sciences sector, which hasbeen weaker than the technology sector, home to most of the IPOsa year earlier.

Similarly, 107 venture-backed companies were sold, down from125 in the year-earlier period. The total disclosed value of thetransactions fell to $4.88 billion, down 42 percent from $8.44billion a year earlier. Just 31 deals disclosed their values,down from 37 a year ago.

The bulk of the merger-and-acquisitions activity was in theinformation technology sector, which saw some outsized deals inthe year-earlier quarter. They included VMWare's $1.26 billionpurchase last year of network virtualization company NiciraNetworks, Microsoft Corp's $1.2 billion acquisition of businesssoftware company Yammer, and Facebook Inc's $1 billion purchaseof photo-sharing service Instagram.

Global security network company FireEye held thelargest IPO of the recent quarter, raising $349 million on Sept.19. The largest M&A transaction was healthcare company Johnson &Johnson's $650 million purchase of AragonPharmaceuticals, a developer of anti-endocrine therapies.

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