VENTURE-BACKED IPOS HAVE STRONGEST OPENING QUARTER IN FIVE YEARS

Mon Apr 2, 2012 8:00am EDT

* Reuters is not responsible for the content in this press release.

CONTACTS

Emily Mendell
NVCA
1.610.565.3904
emendell@nvca.org

Lauren Herman
Thomson Reuters
1.646.223.5985
lauren.herman@thomsonreuters.com

Market Stability and Favorable Legislation Positions Emerging Growth Companies Well for 2012 Exits

New York, New York, April 2, 2012 - Venture-backed initial public offering (IPO) activity marked its strongest opening quarter, by number of issues and dollars raised, since the first quarter of 2007.  Bolstered by increased stability in the broader U.S. stock market indices, 19 venture-backed companies went public in the United States during the first quarter of 2012, raising $1.5 billion, according to the Exit Poll report by Thomson Reuters and the National Venture Capital Association (NVCA).  By dollars, the quarter registered a 10 percent increase compared to the first quarter of 2011, when 14 venture backed companies raised $1.4 billion.  For the first quarter of 2012, 86 venture-backed M&A deals were reported, 24 of which had an aggregate deal value of $2.7 billion.

"As we close the first quarter of 2012, venture-backed companies are extremely well positioned to consider an initial public offering on a U.S. exchange," said Mark Heesen, president of the NVCA. "The recently passed JOBS Act will grant emerging growth companies temporary but significant regulatory relief during the IPO process, allowing them to focus on accessing capital to grow their businesses.  We have two vibrant exchanges that are eager for venture-backed company listings and we have a strong list of companies in registration poised to enter, what appears for the time being, to be a relatively stable market.  This environment can only help the M&A market as well, as companies now have two viable exit paths from which to choose."

Venture-Backed Liquidity Events by Year/Quarter, 2006-2012
Quarter/Year Total  M&A Deals M&A Deals with Disclosed Values *Total Disclosed M&A Value ($M) *Average M&A Deal Size   ($M) **Number of IPO's Total Offer  Amount ($M) Average IPO Offer Amount ($M)
2006 378 167 19,141.8 114.6 57 5,117.1 89.8
2007 382 170 29,556.6 173.9 87 10,960.6 126.0
2008-1 109 42 4,983.2 118.7 5 282.7 56.6
2008-2 85 26 3,267.9 125.7 0 0.0 0.0
2008-3 89 33 3,235.2 98.0 1 187.5 187.5
2008-4 65 18 2,390.9 132.8 0 0.0 0.0
2008 348 119 13,877.2 116.6 6 470.2 78.4
2009-1 65 15 666.0 44.4 0 0.0 0.0
2009-2 65 13 2,550.1 196.2 6 827.4 137.9
2009-3 69 23 1,362.4 59.2 2 465.4 232.7
2009-4 74 41 8,614.7 210.1 4 349.3 87.3
2009 273 92 12,525.6 136.2 12 1,642.1 136.8
2010-1 121 32 5,426.6 169.6 9 936.3 104.0
2010-2 99 23 2,924.6 127.2 18 1,382.7 76.8
2010-3 117 31 3,729.1 120.3 15 1,558.0 103.9
2010-4 108 43 6,324.2 147.1 32 3,555.6 111.1
2010 445 129 18,404.5 142.7 74 7,432.5 100.4
2011-1 133 51 6,127.2 120.1 14 1,375.8 98.3
2011-2 92 39 6,406.7 164.3 22 5,454.2 247.9
2011-3 125 39 6,611.3 169.5 5 442.9 88.6
2011-4 117 37 4,936.6 133.4 12 2,648.9 220.7
2011 467 166 24,081.8 145.1 53 9,921.9 187.2
2012-1 86 24 2,730.1 113.8 19 1,517.9 79.9
Source: 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 19 venture-backed IPOs valued at $1.5 billion in the first quarter of 2012, which represented a 10 percent increase in dollar value and a 36 percent increase in volume compared to the first quarter of 2011. Eleven of the 19 IPOs of the quarter were IT-related IPOs representing 58 percent of the total issues for in the quarter.

By location, 18 of the quarter's 19 IPOs were by U.S.-based companies with six coming from the state of California.  Guanghzhou, China-based online retailer, Vipshop Holdings (VIPS), was the lone initial public offering from a non-U.S. company.  The company raised $71.5 million on the New York Stock Exchange in March.

In the largest IPO of the quarter, ExactTarget (ET), an interactive marketing company based in Indianapolis, raised $161.5 million and began trading on the New York Stock Exchange on March 22nd.

Venture-Backed IPO Industry Breakdown
Q1 2012
Industry *Number of Venture-Backed IPO's in the U.S. Total Venture-Backed Offering Size ($M)
Information Technology Internet Specific 8 671.8
Computer Software and Services 2 181.7
Communications and Media 1 93.6
11 947.1
Life Sciences Biotechnology 4 265.1
Medical/Health 1 50.4
5 315.5
Industrial/Energy 2 122.6
Other Products 1 132.6
3 255.2
TOTAL 19 1,517.9
Source: Thomson Reuters & National Venture Capital Association
*Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile

For the first quarter of 2012, 10 companies listed on the NASDAQ stock exchange and nine companies listed on the New York Stock Exchange.

Seventeen of the 19 companies brought to market this quarter are currently trading above their offering price.  There are 50 venture-backed companies currently filed for an initial public offering with the SEC.

Mergers and Acquisitions Overview

As of March 30th, 86 venture-backed M&A deals were reported for the first quarter of 2012, 24 of which had an aggregate deal value of $2.7 billion.  The average disclosed deal value was $113.8 million, down 5 percent from the first quarter of 2012.

The information technology sector led the venture-backed M&A landscape with 68 of the 83 deals of the quarter and had a disclosed total dollar value of $1.9 billion. This was an increase of 37 percent from the first quarter of 2011. Within this sector, Computer Software and Services and Internet Specific deals accounted for the bulk of the targets with 28 and 23 transactions, respectively, across these sector subsets.  

Venture-Backed M&A Industry Breakdown
Q1 2012
Industry Number of Venture- Backed M&A deals Number of  Venture- Backed M&A  deals with a disclosed value Total Disclosed Venture- Backed  Deal Value ($M)
Information Technology Computer Software and Services 28 6 447.7
Internet Specific 24 2 285.1
Communications and Media 10 6 519.9
Semiconductors/Other Elect. 5 3 628.0
Computer Hardware 1 0 0.0
68 17 1,880.7
Medical/Health 7 1 325.0
Life Sciences Biotechnology 3 2 350.2
10 3 675.2
Non-High Technology Industrial/Energy 4 3 147.3
Other Products 3 1 27.0
Consumer Related 1 - 0.0
8 4 174.3
TOTAL 86 24 2,730.1
Source: Thomson Reuters & National Venture Capital Association

The two largest venture-backed M&A deals of the first quarter were in the Life Sciences sectors as Celgene Corp acquired Avila Therapeutics, a Waltham, Massachusetts-based developer of small molecule therapeutics, for $350 million and Covidien PLC acquired Sunnyvale, California-based BARRX Medical for $325 million.

Deals bringing in the top returns, those with disclosed values greater than four times the venture investment, accounted for 54 percent of the total disclosed transactions during first quarter of 2012, up from 42 percent in the third quarter. Venture-backed M&A deals returning less than the amount invested accounted for 21 percent of the quarterly total.

Analysis of Transaction Values versus Amount Invested
Relationship between transaction  value and investment Q4 11 M&A ** Q1 12 M&A **
Deals where transaction value is less than total venture investment 12 5
Deals where transaction value is 1-4x total venture investment 7 6
Deals where transaction value is 4x-10x total venture investment 5 11
Deals where transaction value is greater than 10x venture investment 9 2
Total Disclosed Deals 33 24
Source: Thomson Reuters & National Venture Capital Association
** Disclosed deals that do not have a disclosed total investment amount are not included

About Thomson Reuters

Thomson Reuters is the world's leading source of intelligent information for businesses and professionals.  We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world's most trusted news organization.  With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 55,000 people and operates in over 100 countries.  For more information, go to www.thomsonreuters.com.

About National Venture Capital Association

Venture capitalists are committed to funding America's most innovative entrepreneurs, working closely with them to transform breakthrough ideas into emerging growth companies that drive U.S. job creation and economic growth. According to a 2011 Global Insight study, venture-backed companies accounted for 12 million jobs and $3.1 trillion in revenue in the United States in 2010. As the voice of the U.S. venture capital community, the National Venture Capital Association (NVCA) empowers its members and the entrepreneurs they fund by advocating for policies that encourage innovation and reward long-term investment. As the venture community's preeminent trade association, NVCA serves as the definitive resource for venture capital data and unites its more than 400 members through a full range of professional services. For more information about the NVCA, please visit www.nvca.org.




This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.

The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.

Source: Thomson Reuters Corporation via Thomson Reuters ONE

HUG#1599302