Venture-Backed Buyouts at Record Volume as Increasing Pace of Exits Mark Possible Recovery

1/3/11Follow @bvbigelow

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the previous quarter, but nevertheless brings the total number of venture-backed acquisition deals to 420 for the year. That’s the highest deal volume since 1985, when such record keeping began. Total valuation (for the 120 deals in 2010 in which the valuations were disclosed) amounted to $18.3 billion, still far short of the $29.5 billion total disclosed for 169 deals in 2007.

Data released this morning by Dow Jones VentureSource also shows a strong uptick in exit activity, although the numbers vary from the “Exit Poll” released today by the NVCA and Thomson/Reuters.

Dow Jones said 14 IPOs raised about $1.1 billion during the fourth quarter, bringing the totals to 46 venture-backed IPOs and $3.4 billion for the full year in 2010. The annual total was more than five times the eight IPOs that raised $903 million in 2009, according to Dow Jones.

In M&A activity, Dow Jones said 109 companies were acquired for a total of $10.5 billion in the fourth quarter, a 7 percent decline in mergers and acquisitions from the same quarter last year. Dow Jones said 445 deals raised $33.9 billion for the entire year, and represented a 17 percent increase in deal activity in 2009, when 381 deals raised $20.8 billion.

“Exit activity is staging a comeback but capital netted lagged as large M&As and IPOs were still uncommon in 2010,” said Jessica Canning, director of global research for Dow Jones VentureSource, in a statement released this morning.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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