As you have read this week about the financial details of Facebook’s IPO filing, you have no doubt stopped to think about—or daydream about—what your own company might be worth.  While going public might be a distant or inappropriate goal for your own venture, Facebook’s IPO serves as a timely reminder that you should be calibrating your business and growth strategies to make your company attractive to investors or strategic partners.  After all, for most startup entrepreneurs, the eventual reward comes in the form of a merger or acquisition, rather than an IPO.

The good news is that the vast majority of technology CFOs (75 percent) expect M&A activity in the sector to rise in 2012, according to the fifth annual BDO Technology Outlook Survey, released this month by BDO USA, LLP, where I am a partner and national director of the Technology and Life Sciences Practice.  However, a word of warning: I’ve seen many deals derailed—with significant delays or value erosion—because of the management team’s undisciplined approach to presenting financial information.

Therefore, whether your own organization is in the market to acquire another business for strategic growth purposes, or you are working to position your company as an attractive acquisition target, there are two issues that are crucial to generating or maintaining shareholder value: Having an acute awareness of the motivating factors behind an M&A transaction, and providing an orderly financial snapshot that will answer the mostly likely questions from potential partners.

Motivating Factors Spurring M&A Transactions

In our survey, respondents predicted that the top three motivations behind M&A deals in 2012 will be revenue growth, enhanced market share, and the acquisition of new technology and intellectual property. In other words, a significant majority of CFOs believe that M&A transactions will mostly be offensive in nature. A company waging an offensive strategy isn’t necessarily engaged in hostile takeovers; rather, it means the focus is more on growth than cost-cutting. Therefore, companies are looking for acquisition targets that will fill in holes in product or technology portfolios, and are not necessarily angling to take a competitor’s product out of the market.

Financial Rigor

Understanding the motivations of other parties in a deal can put you in a more powerful position, either as an acquirer or a target. Equally important is meeting the due diligence requirements of an acquirer in an efficient and confident manner. By ensuring that reliable and accurate financial and operational information is available, companies can avoid roadblocks to the M&A process—roadblocks that can significantly erode shareholder value, if not derail the entire process.  For example, although the survey indicates a positive outlook for the industry this year, respondents foresee overall revenue increases of just 2.6 percent – significantly lower than the forecasted growth in last year’s survey (10.4 percent).  If you are experiencing a lower revenue forecast this year, be prepared to address how you intend to get your company back on track.

Beyond M&A Transactions

Even if M&As are not currently a part of your growth strategy, accessing capital remains a top of mind issue for technology companies. The good news is that—according to our survey—over three-quarters (76 percent) of respondents say they feel better about the ability to access capital in 2012. The hurdles to arranging debt financing remain high, but businesses with strong fundamentals and fiscal discipline are once again able to obtain credit. In fact, the majority of respondents who plan to raise additional capital this year intend to use debt financing. The key to making debt work for your company is to manage the process proactively, and avoid being forced into reactive mode.

Whether your business is planning to undertake a strategic transaction or simply needs to access capital through financing, careful planning is critical. A blend of fiscal responsibility, corporate discipline and the willingness to take measured risk are the keys to powering growth.

Comments | Reprints | Share:          

This week’s deal news covered a breadth of sectors: biotech, medical devices, mobile applications, software, and robotics. Not to mention a major venture capital fund raise.

—Waltham, MA-based drugmaker Avila Therapeutics was bought by New Jersey-based Celgene (NASDAQ: CELG) for $350 million, with as much as another $575 million available in milestones. Avila is a maker of “covalent” drugs that are designed to shut down the activity of disease-causing proteins for a prolonged period of time.

—Verastem, a young Cambridge, MA-based biotech working on drugs targeting cancer stem cells, completed its initial public offering, led by UBS and Leerink Swann. The IPO (5.5 million shares sold at $10 apiece) represented a strong showing among investors, as Verastem originally indicated it planned to sell 4.5 million shares priced between $9 and $11 each. The underwriters have a 30-day option to buy another 825,000 shares.

—Burlington, MA-based ConforMIS, a maker of knee implant systems, raised $89 million in a Series E funding from private equity investors and government investment funds abroad. The company said it will put the money toward sales, manufacturing, and expansion of its technology.

—Co3 Systems, a maker of data loss management software, received new funding from Fairhaven Capital. The Cambridge, MA-based startup said it will put the money (whose sum was undisclosed) toward sales, marketing, and engineering.

—Malborough, MA-based medical device startup Navilyst Medical will be acquired by Albany, NY-based AngioDynamics (NASDAQ: ANGO) in a transaction valued at $372 million, based on the company’s $14.20 per share closing stock price Monday. Navilyst, which focuses on … Next Page »

Comments | Reprints | Share:          

It’s that outlook time of year, and Mark Heesen, president of the National Venture Capital Association (NVCA), was in San Diego earlier this week, talking about the 2012 outlook for venture capital. Today he’ll make a similar presentation to the New Jersey Technology Council. Next week,  John Taylor, the NVCA’s director of research is set to talk in Florida about the 2012 outlook.

Heesen began his presentation in San Diego by saying, “Be prepared for a roller coaster ride here, because that’s where we’ve been for the past year—and that’s where we’re going.”

In a conversation with Xconomy yesterday, Heesen talked about some of the broader trends he’s charting throughout the United States. Here are some of the takeaways from our talk, and from Heesen’s presentation in San Diego:

—The VC industry continues to contract. Venture capital investments in U.S. startups peaked in 2000, when VCs sank $99 billion into emerging companies of all kinds. There were 1,022 venture capital firms at that time, and they were collectively managing $220 billion worth of invested capital. In 2010, VCs invested more than $20 billion into startups of all kinds. The number of VCs had plunged by almost 55 percent—to 462 VC firms with $177 million under management.

—VCs are raising more capital from their limited partners, but it isn’t enough to sustain current investment levels. In 2011, U.S. venture firms raised a total of $18 billion. That was up significantly from the $14 billion that VCs raised in 2010—but it falls $10 billion short of covering the $28 billion that VC firms invested in 2011. As a result, Heesen says he expects venture investments in U.S. technology and life sciences companies to decline in 2012.

—A handful of VC firms accounted for … Next Page »

Comments (1) | Reprints | Share:          

[Updated 1/26/12 8:30 am. See below.] When Avila Therapeutics’ CEO Katrine Bosley spoke with Xconomy in December, she predicted the oncology world would show “a lot of excitement” for drugs that inhibit an enzyme called Bruton’s tyrosine kinase (Btk)—and in particular for Avila’s experimental compound in that category, AVL-292. Her words were prescient: Today Summit, NJ-based Celgene (NASDAQ: CELG) announced that it is buying Avila, which is based in Bedford, MA, for $350 million, plus up to $575 million in milestone payments.

[Historical material added.] AVL-292 is part of a class of compounds Avila developed called “covalent” drugs. Covalent molecules bind tightly to disease-causing proteins, thereby shutting down their activity for a prolonged period of time. AVL-292 is also extremely targeted, meaning it blocks Btk with little effect on healthy processes in the body. That’s important—the drug industry has been interested in Btk inhibition for years, but struggled to achieve the right balance between efficacy and selectivity, Bosley told Xconomy last month. Avila’s co-founder Juswinder “Jus” Singh (pictured above), a computational chemist formerly of Biogen Idec, had the idea to develop a class of drugs that could form covalent bonds with proteins.

AVL-292 is currently in Phase 1 clinical trials for non-Hodgkin’s lymphoma, B cell chronic lympocytic leukemia, and rheumatoid arthritis. In December, Avila presented data at the American Society of Hematology (ASH) annual meeting showing that five out of six patients with chronic lymphocytic leukemia who received AVL-292 remained stable on the drug. Blood tests showed that the largest of the two doses tested inhibited Btk over the long run and was well tolerated.

Celgene has been quite active in the Boston area over the last few months. In October, it extended a partnership with Cambridge, MA-based Agios, adding $20 million to what was already a $130 million deal. And in December, Celgene participated in a $30 million funding of Cambridge, MA-based Acceleron, which is working with Celgene on two drugs to treat anemia.

In today’s announcement, Celgene said Avila’s covalent-drug platform would augment its own research efforts in developing novel drugs for complex disorders. “In particular, we see Avila’s unique approach to protein silencing as an area of great promise for our research initiatives in hematology, oncology and immune-inflammatory diseases,” said Tom Daniel, president of research and early development for Celgene, in the statement.

The deal includes a potential $195 million in milestone payments for the development and approval of AVL-292, as well as up to $380 million in potential milestone payments related to other drug candidates that emerge from Avila’s covalent-drug platform, which it calls Avilomics. In today’s announcement, Bosley lauded Celgene’s leadership in hematology and autoimmune disease. “We believe working together may accelerate the advancement of more innovative medicines from the Avilomics platform,” she said.

[Paragraphs added to provide historical background and input from Polaris Ventures.] Avila board member Amir Nashat said in an e-mail that today’s deal demonstrates the value of betting on unproven and risky new technologies. Nashat is a partner at Waltham, MA-based Polaris Venture Partners, which was an early investor in Avila. Co-founder Singh’s model, Nashat says, “had a number of skeptics. While many of the top selling drugs on the market formed covalent bonds with their targets, the irreversible interactions were serendipitously discovered after the fact. Ironically, no one in industry had thought to develop a platform for discovering covalent drugs, believing the approach to be too risky.”

Avila raised $21 million in a Series A in 2008 from Polaris, Atlas Venture, Abingworth Management, and Advent Venture Partners. The following year, it raised $30 million in a Series B led by the Novartis Option Fund. The company also had relationships with Sanofi and Clovis Oncology. Its research deals had a combined potential value of $1.5 billion, Nashat says. “Avila’s joining with Celgene is a great fit,” he says. “The combination of two great companies and their research and development teams will accelerate the advancement of more innovative medicines.”

Comments | Reprints | Share:          

The unsolicited $5.7 billion offer that Roche made for Illumina will no doubt dominate San Diego’s biotech news for weeks to come. We have it and more.

—Switzerland’s Roche offered $5.7 billion, or $44.50 a share, for San Diego-based Illumina (NASDAQ: ILMN in a hostile bid disclosed yesterday. Roche’s bid to stake a claim in genetic diagnostics by acquiring the market-leading maker of DNA sequencing instruments would be the Swiss pharma giant’s biggest deal since its $46.8 billion buyout of Genentech almost two years ago. Roche is the world’s biggest maker of cancer drugs, which suggests its quest for Illumina represents a significant move to base cancer treatments on each patient’s genome.

—Venture capital investors sank $4.73 billion into 446 biotechs nationwide in 2011, according to the MoneyTree report from the National Venture Capital Association, PwC, and Thomson Reuters. But as Luke pointed out in his BioBeat column, there is an alarming drop in support for early stage life sciences startups. Only 153 biotech and medical device startups got their first round of financing in 2011, the lowest amount of seed investment activity in 15 years.

—At an Xconomy dinner discussion, former Amira Pharmaceuticals CEO Bob Baltera said insufficient access to capital is the biggest driver for decision-makers on both sides of biotech-pharma partnerships. So what are some other key factors? We asked some of San Diego’s life sciences leaders to explore the question in an “on the record” dinner discussion late last year.

—San Diego’s Sequenom (NASDAQ: SQNM) completed its secondary public offering, raising roughly $62 million in gross proceeds (before underwriting costs) in the sale of 14.95 million shares, including additional allotments granted to underwriters. Sequenom said it plans to use the net proceeds for … Next Page »

Comments | Reprints | Share:          

San Diego-based Illumina, the market leading maker of DNA sequencing instruments, has just made it through a rough year, and now it may be entering its final chapters as an independent company.

Illumina (NASDAQ: ILMN) said last night that it has gotten an unsolicited (that’s polite PR language for hostile) takeover bid from Switzerland-based Roche. The offer values Illumina at $44.50 a share, or about $5.7 billion. That represents about an 18 percent premium over Illumina’s closing stock price of $37.69 on Tuesday. Roche said it plans to run a “tender offer” in which shareholders are being asked to tender their shares at its price until Roche has corralled enough shares to take control. Illumina, in a brief statement, asked shareholders to do nothing until the board makes a recommendation.

The offer must look like a screaming low-ball offer to Illumina shareholders, given that the company traded as high as $79.40 a share in the last year. But Illumina has gone through a rough stretch of late, as it fell short of its quarterly sales goal last fall, and made layoffs, as customers worried about potential federal research budget cuts, and competitors like Life Technologies, Complete Genomics, and Pacific Biosciences all fought hard for their share of a fast-moving market for sequencing tools. Still, Illumina is the dominant player in the market, and the DNA sequencing market is expected to grow as machines get faster and cheaper, making them available to many more scientists. The market is expected to grow from $1.2 billion in 2009 to more than $3.6 billion by 2014, according to figures from Scientia Advisors.

Given the opportunity, I’ve got to imagine the Illumina board is seething at this unsolicited takeover bid. It sounded like it in last night’s terse, but diplomatic, statement.

“Consistent with its fiduciary duties and responsibilities, and in consultation with its financial and legal advisors, Illumina’s Board of Directors will thoroughly review Roche’s proposal and make a recommendation to stockholders in due course that the Board believes is in the best interests of Illumina stockholders. Illumina stockholders are advised to take no action at this time pending the Board’s recommendation.

Analysts at Bernstein, quoted by Dow Jones, didn’t sound so excited about the deal either. Roche has sought to become a diversified healthcare giant that makes drugs and diagnostics, and while high-powered genetic instruments like those from Illumina are primarily research tools today, many in the industry believe they will have more value in the future as diagnostic tools.

“Large scale genomics may, or may not, have an important role in clinical practice in the next 10 to 15 years, but Roche feels it needs to have the option to play just in case the hype eventually becomes reality,” is how analysts at Bernstein interpreted the Swiss company’s move Wednesday, according to Dow Jones.

Quintin Lai, an analyst with Robert W. Baird who covers Illumina, said he believes Roche is mostly interested in using Illumina tools for making products to diagnose cancer. “We think Roche covets the clinical diagnostics potential that ILMN’s technology provides,” Lai wrote today in a note to clients. “We have noted that next-generation sequencing is attracting strong interest in the area of cancer diagnostics and therapy selection.”

Illumina shares shot up 45 percent, all the way to $54.63, in speculation that takeover bids from Roche, or possibly another company, will run much higher. This will certainly be an interesting story to watch unfold over the coming weeks.

Comments | Reprints | Share:          

The evolution of Constant Contact continues. The Waltham, MA-based online marketing firm (NASDAQ: CTCT) said today it has acquired Boston-based CardStar, a maker of a mobile app that lets people consolidate their loyalty and rewards cards. Terms of the acquisition weren’t given.

The deal represents Constant Contact’s first foray into mobile rewards technology aimed at helping small businesses stay connected to consumers. CardStar’s app lets people create a digital version of their physical membership cards (for retail stores, gyms, and so on) all in one place, on their smartphone. CardStar started in late 2008 and has four employees joining Constant Contact, including founders Andy Miller and Danny Espinoza. The startup says it has more than 2 million active users.

“I was a user before I was an acquirer,” says Constant Contact CEO Gail Goodman.

And acquiring CardStar makes a lot of sense for Constant Contact, which has been working to transform itself from an e-mail marketing firm into a one-stop shop for small businesses trying to reach customers through social media, online marketing, rewards programs, and other methods.

“This acquisition is at the intersection of everything we do,” Goodman says. “As we look at what small businesses are trying to do, they are trying to use every possible channel to reach customers—e-mail, social, mobile. At the core of that is a loyalty program. Andy and his team will help us weave those pieces into a really simple, really impactful application on the merchant side.”

Goodman declined to give specifics on any upcoming mobile products, but she emphasized that CardStar’s app will continue to run, and that more is on the way. “We are on a pretty aggressive product roadmap,” she says. “Much of what we’ve done has loyalty at its heart. Our customers have always wanted to take that a step further. But without mobile, it’s pretty hard.”

As for why Constant Contact chose CardStar over other companies in the mobile couponing and rewards sector, Goodman pointed to the startup’s traction with consumers and the culture fit with her team.

Constant Contact says it has more than 450,000 customers, mostly small businesses, nonprofits, and associations. Last summer, I spoke with the firm about its plans for innovating as a young public company (IPO in 2007), and about the biggest technology shift in its 13-year history (integrating Web software with existing database systems, among other things).

Comments | Reprints | Share:          

There was a whole lot of life sciences news over the past week. Here’s my roundup.

—Carlsbad-based Life Technologies (NASDAQ: LIFE) said it’s taking orders for a benchtop genome sequencer that can to decode an individual’s DNA within 24 hours and at a cost of roughly $1,000. The company priced its new Ion Proton Sequencer at $100,000 to $150,000, which also represents a dramatic reduction compared with the cost of existing DNA sequencers, and might even entice some practicing physicians to buy into the idea of personalized medicine. A cross-town rival, San Diego-based Illumina, also introduced an improved version of its gene-sequencing machine capable of same-day service, although Forbes’ Matthew Herper says Illumina’s HiSeq 2500 is priced at $740,000.

—A $1 million gift to the Tech Coast Angels from the family of slain TCA member and life sciences investor John G. Watson has enabled the angel group to establish a nonprofit foundation to support entrepreneurism in the San Diego region. A financial adviser, who awaits sentencing following his conviction two months ago, murdered Watson in his La Jolla town home. Watson’s sister, Gillian Ison, told the TCA, “John loved investing, innovation, and the entrepreneurial spirit that he discovered when he arrived in San Diego. We believe that a foundation supporting entrepreneurism is the best way to honor his memory and his life.”

—San Diego’s AnaptysBio said it has established strategic alliances with Novartis and an undisclosed pharmaceutical company. The company plans to use its proprietary technology to discover and develop new therapeutic antibodies with multiple cancer-related therapeutic targets. AnaptysBio said the two deals provide global rights to develop and commercialize a limited number of antibodies against each cancer target that AnaptysBio generates.

—In his BioBeat column, Luke previewed the five myths likely to make the rounds at this week’s JP Morgan Healthcare Conference in San Francisco. You could say that Luke inoculated readers from excessive optimism by writing, “Hope and hype are a couple essential ingredients in this business, and every year both are on display at this conference. Sometimes the wishful thinking can congeal into conventional wisdom.” Is that good, or what?

— Wylie Vale, a Salk Institute scientist, renowned expert on brain hormones, and founder of San Diego’s Neurocrine Biosciences (NASDAQ: NBIX), died on Jan. 3 while vacationing in … Next Page »

Comments | Reprints | Share:          

Some interesting developments in ad distribution and video this week. Needham, MA-based Extreme Reach, the maker of a video-ad platform for TV and Web, has secured more money for its growth and has made an important acquisition.

Extreme Reach said today it has closed a $9 million credit facility with TD Bank. The company also has acquired Spotlight Business Affairs, a commercial talent rights management and payment firm, for an undisclosed sum. The details sound kind of gnarly, but basically the deal means the company’s ad distribution system will be in compliance with existing talent and rights agreements.

The idea behind Extreme Reach, which started in 2008, is to help video advertisers and agencies distribute ads to TV stations, cable networks, and Web publishers—all with cutting-edge cloud-based storage and processing technology. Last September, I reported that Extreme Reach was growing fast and looking to raise a big financing round. Chief executive John Roland said at the time that the company was very profitable and had grown from 17 employees to about 90 in the previous two years, with 20 more hires and geographic expansion imminent.

Comments | Reprints | Share:          

Carlsbad, CA-based SkinMedica says it has acquired Dana Point, CA-based Colorescience, a mineral makeup company that provides cosmetics to remedy and camouflage skin discolorations and other defects while also protecting skin from the damaging effects of the sun. Financial terms were not disclosed.

In a statement, SkinMedica indicates that it plans to operate Colorescience as a subsidiary, and named Josie Juncal to lead the business as vice president of new commercial operations. She previously held roles in product development, marketing, and public relations at SkinMedica.

SkinMedica markets its skin care products to dermatologists and other physicians. Its primary prescription product is an eflornithine hydrochloride cream intended to help women reduce unwanted facial hair. The company was founded in 1999, and has received venture backing from Apax Partners, Domain Associates, EuclidSR Partners, HealthCare Ventures, Montagu Newhall Associates, Montreux Equity Partners, Perseus-Soros BioPharmaceutical Fund, St. Paul Venture Capital, Split Rock Partners and Windamere Venture Partners.

Comments | Reprints | Share:          

Entrepreneurs in the crowdsourced-services niche must be feeling a lot like the knights battling the killer rabbit in Monty Python and the Holy Grail these days. San Francisco service-networking site TaskRabbit, fresh off a $17.8 million funding round, is eating up the competition.

According to an e-mail received Tuesday night from TaskRabbit marketing staffer Johnny Brackett, the startup plans to announce Wednesday that it has acquired SkillSlate, a New York startup similar to TaskRabbit in some respects. The financial terms of the acquisition aren’t being disclosed. SkillSlate, co-founded by former UBS investment banker Bartek Ringwelski and former Yahoo Real Estate product manager Brian Rothenberg, is a services marketplace that closed a $1.2 million round of angel and venture funding in August 2010, according to a regulatory filing.

SkillSlate’s specialty is matching service professionals such as movers, handymen, and programmers with consumers who post service requests. Like TaskRabbit, it does the matching online. But in contrast with TaskRabbit’s workers, many of whom handle less-skilled jobs like grocery pickup or office cleaning, SkillSlate workers focus on “skill-based and artistic tasks,” in the words of a TaskRabbit blog post shared with Xconomy. “By integrating SkillSlate’s platform with TaskRabbit’s, we will be able to provide an even more enhanced service—one where folks can get help with practically anything,” the post says.

TaskRabbit, which was born in Boston in 2009 under the name RunMyErrand, has raised more than $23 million in funding and has expanded to seven regions, including New York City. Ringwelski will become TaskRabbit’s's director of financial planning and analysis and Rothenberg will become director of online marketing, according to the post. SkillsSlate chief technology officer Mike Nelson will join TaskRabbit’s engineering team.

Comments (1) | Reprints | Share:          

—San Diego’s Active Network (NYSE ACTV), which provides online event registration and related services, acquired Philadelphia-based StarCite for about $51 million in stock and cash. StarCite, which provides Web-based event management services for companies around the world, has about 300 employees. The Active Network said StarCite will become part of its newly launched “Business Solutions” division, which will serve the events industry.

—San Diego-based Accelrys (NASDAQ: ACCL), which provides scientific enterprise research and development software and services, said it’s paying $35 million to acquire VelQuest, a Boston-area developer of systems that support good manufacturing practices for FDA-regulated industries. Accelrys said the VelQuest acquisition would expand its product line to include software used in pharmaceutical quality assurance and quality control.

—San Diego’s Entropic Communications (NASDAQ: ENTR), which specializes in Multimedia over Coax (MoCA) technology used in home entertainment systems, said it wants to purchase certain assets of Trident Microsystems’ set-top box and system-on-a-chip business. Entropic submitted its $55 million offer as part of a Chapter 11 bankruptcy reorganization that Sunnyvale, CA-based Trident filed last Wednesday. The bankruptcy court in Delaware must approve the Entropic offer, which could happen by the end of March if no other bidders step forward.

—Qualcomm Chairman and CEO Paul Jacobs is set to deliver the opening keynote address tomorrow morning at the annual Consumer Electronics Show in Las Vegas. Jacobs is expected to talk about Qualcomm’s vision for mobile computing as smart phones and tablets increasingly become a mainstay tool for consumer media and entertainment. The three-day show also will serve as a global stage for Sony Electronics, the San Diego-based arm of Sony’s U.S. business. San Diego’s Razer, Entropic Communications, Leap Wireless, Independa, Skin-It, and Marchon 3D, also are displaying products at the show.

—I profiled San Diego-based Verimatrix, a venture-backed company that develops encryption software and related security technologies for pay-TV networks. Verimatrix CEO Tom Munro told me the company has been successful in creating piracy protection software for Internet-Protocol Television (IPTV), and today more than half of the company’s business is in so-called unmanaged networks, such as Netflix, which provides streaming video “Over the Top” (OTT) of a cable- or satellite-based broadband Internet platform.

—The 2011 executive compensation survey showed a 3.7 percent increase nationwide in tech sector CEO pay over 2010. The annual CompStudy survey produced by executive search firm J. Robert Scott and law firm WilmerHale in collaboration with Noam Wasserman, associate professor of business administration at Harvard Business School. The study found that non-founder technology CEOs brought in average base salaries of $242,000 in 2011, up from $233,000 in 2010.

Comments | Reprints | Share:          

[Updated 12:20 pm] Here are a couple of notable Boston-area deals in digital advertising and marketing, each with a certain je-ne-sais-quoi European flair. Plus one more local company worth watching…

—Neolane, a social marketing tech company based in Paris with North American headquarters in Newton, MA, has closed a $27 million financing round led by Battery Ventures. The company’s previous investors also participated in the round. Neolane, which has 240 employees globally—just under 50 in New England—says it will use the money to expand its operations, particularly in North America. Neolane says it competes with IBM/Unica, Aprimo, and SAS.

—DataXu, the Boston-based digital advertising and marketing startup, has acquired U.K.- and Germany-based Mexad, a top European “demand-side platform” provider (meaning it gives advertisers tools to optimize when and where they place ads). Terms of the deal weren’t given. DataXu makes a software platform for advertisers who want real-time information and insights on consumer behavior across Web, mobile, and video channels. I spoke with CEO Mike Baker last year about DataXu’s recent growth and strategy in the ad-tech sector.

—ClickSquared, a Boston marketing software startup, has closed $9 million in equity financing led by Staley Capital, with existing investors also participating. The company, which started in 1999, does e-mail marketing and delivery, customer analytics, and campaign management, among other things. [This deal was added to the roundup after the first two were published---Eds.]

Comments (1) | Reprints | Share:          

Some business software news this morning. LogMeIn (NASDAQ: LOGM), the Woburn, MA-based remote access and customer support tech company, said it has acquired Kansas-based Bold Software for $16.5 million, including retention-based bonuses over time.

Bold makes software for live-chat systems and click-to-call customer service. The move is intended to strengthen and expand LogMeIn’s offerings in customer care and engagement. The company says it will continue selling Bold’s main product line as a stand-alone offering as well as integrate it with LogMeIn’s remote support software.

LogMeIn started in 2003 and is led by CEO Michael Simon, who spoke last fall about LogMeIn’s rise from being a “lifestyle business” to becoming a mid-size public company (a freemium business model was key). The company went public in 2009.

Comments | Reprints | Share:          

A lot has happened in the technology world in the past year. So let’s take a minute to reflect on the defining moments of 2011 and where we stand now, as a local tech community with increasingly global impact.

This is by no means comprehensive, or even a summary of the most important stories of the year. It’s just a select few of the biggest highlights and lowlights, organized in spaghetti western fashion (cliché alert).

The Good: Oracle Buys Endeca

Some might argue this wasn’t necessarily “good” for the local tech scene, but Oracle’s $1B+ purchase of Cambridge, MA-based Endeca, the enterprise search and business intelligence firm, was one of the biggest deals of the year, and was kept under wraps pretty well. It will be interesting to watch whether Endeca’s technology and talent give Oracle a leg up in its competition with IBM, SAP, Microsoft, and Google. Endeca, which started in 1999, stands as a testament to the notion that billion-dollar tech companies can be built—and are being built—in Massachusetts. (See Acme Packet, Progress Software, Wayfair, and others on their way.)

Honorable mention: Carbonite, TripAdvisor, and Zipcar each went public with successful IPOs in 2011. That’s three more publicly traded tech companies in Boston that seem to be thriving in a tough market. Who will join them in 2012?

The Bad: RSA Gets Hacked

No one would argue this isn’t bad—and not just for local companies. In March, RSA Security reported a data breach involving its authentication products, which are widely used by big companies and government agencies. The Bedford, MA-based division of data storage giant EMC said it had … Next Page »

Comments (1) | Reprints | Share:          

‘Tis the season for end-of-year acquisitions to be announced, now that everyone’s back at work. Hopkinton, MA-based VelQuest, a maker of pharmaceutical and medical device-related software, has been acquired by San Diego-based Accelrys (NASDAQ: ACCL), the scientific R&D software firm, for $35 million in cash.

VelQuest started in 1999 and is led by CEO and co-founder Ken Rapp. Its investors include GE and MedEquity Capital. The company makes software that helps life sciences organizations manage lab test procedures efficiently and in compliance with FDA regulations. “All key members” of the VelQuest management team are staying on post-acquisition, according to the press release.

Accelrys makes a wide range of modeling, simulation, lab management, workflow, and data management software. The VelQuest acquisition adds another piece to the corporate strategy that Accelrys CEO Max Carnecchia outlined last year. He said the company aspires to help its customers manage the entire process of scientific development by offering a range of software products that can harness the innovation, experiments, modeling and simulation, and other work being done in labs on a global basis, both within their own organizations and within their collaborators.

The company says it has more than 1,300 customers across pharma, biotech, energy, chemicals, aerospace, and other industries.

Comments | Reprints | Share:          

2011 was a year of bigger deals and fewer exits for venture-backed companies, according to data being released today by Dow Jones VentureSource.

VentureSource says that venture-backed companies netted $53.2 billion through a total of 522 deals of all kinds in 2011—mergers, buyouts, and IPOs. That was a 14 percent decline in the number of deals, and a 26 percent increase in capital raised when compared to 2010.

The median price paid for a venture-backed company was $71 million in 2011, a 77 percent gain over the median price of venture-backed M&A and buyout deals in 2010. VentureSource says companies raised a median of $17 million in venture financing to reach an M&A or buyout deal, which was a 12 percent slide from 2010.

The financial information service says 45 venture-backed companies raised $5.4 billion through initial public offerings in 2011. That’s significantly more capital than the $3.3 billion that 46 venture-backed companies raised in 2010. But the difference is due mostly to two IPOs in 2011, Groupon and Zynga, which together raised $1.7 billion.

“The IPO market saw some gains through the first half of the year, but the momentum was not strong enough to survive the volatility in August,” says Zoran Basich, editor of Dow Jones VentureWire, in a statement released today. “During 2012 we’ll get a sense of whether the last two years of flat IPO activity is the new normal for the industry or if there’s room to grow.”

During the fourth quarter of 2011, 10 IPOs raised $2.4 billion. Currently, 60 U.S. venture-backed companies are in IPO registration. Thirteen of those companies filed during the fourth quarter.

Connecticut-based Renaissance Capital, which tracks all IPOs, says 24 Internet companies went public in 2011—the highest number in a decade.

Renaissance Capital also counted 260 IPO filings in 2011, just one less than the 259 IPO registrations filed in 2010. But Renaissance also notes that 67 companies withdrew their IPOs in 2011, which is the second-highest number of withdrawals since 2003. The peak occurred in 2008, when 103 companies withdrew their IPOs.

Comments | Reprints | Share:          

Merry Christmas, Boston. You asked for it, and you got it. A big, publicly traded consumer tech company to put us on the map alongside the Silicon Valley bad boys and uppity New Yorkers. I present to you: TripAdvisor (NASDAQ: TRIP).

Sure, we already have Zipcar (NASDAQ: ZIP), Carbonite (NASDAQ: CARB), iRobot (NASDAQ: IRBT), and privately held but well-established companies like Wayfair, Kayak, and Harmonix. But TripAdvisor is different. Although the online travel firm is not new—it’s been cranking here in Boston for more than a decade—it has become one of the biggest consumer-focused Internet companies on the East Coast, with more than 1,100 employees; 50 million-plus unique visitors a month checking out hotel, restaurant, and travel reviews; and, oh yeah, a market cap north of $3 billion. Yet it hasn’t received as much media coverage or tech-community-adulation as you might expect over the years. (An exception to the former would be this in-depth story by my colleague Wade Roush; the latter would be this commentary from investor Chris Dixon.)

I spoke with TripAdvisor CEO Stephen Kaufer on Wednesday, the day his company officially became independent from Expedia (NASDAQ: EXPE) and started trading on the Nasdaq under its own stock symbol. Here are my takeaways from our chat:

1. TripAdvisor wants the spotlight now. “We have generally been very, very surprised at how little attention the press have paid to TripAdvisor,” Kaufer said. He pointed to his company’s size, number of employees, traffic, revenues, and profits, calling it “the $3 billion company in our own backyard.” On the local training and ecosystem front, he says college interns are turning down offers from Facebook and Google and working at TripAdvisor instead.

2. TripAdvisor is global. Seventy-five percent of the traffic to the company’s branded websites comes from outside the U.S. Think about that for a minute. “We’re almost unchallenged in most countries in the … Next Page »

Comments | Reprints | Share:          

Some big acquisition news before the holidays here. Cambridge, MA-based Akamai Technologies (NASDAQ: AKAM), the Web delivery and networking giant, said today it is acquiring a competitor, Sunnyvale, CA-based Cotendo, for $268 million in cash. The deal, which has been rumored for the past month, is expected to close in the first half of 2012.

Akamai has been positioning itself as a provider of a secure software platform for businesses to reach customers via Web, mobile, and cloud. Cotendo competes with Akamai in the realm of accelerating Web and mobile applications. The California-based company started in 2008 and has about 100 employees, more than half of them based in Israel.

About a year ago, Akamai and MIT filed a lawsuit against Cotendo alleging patent infringement. Presumably that case is resolved now.

This is a relatively rare case of a Boston tech company acquiring a Silicon Valley company. Most of the other big deals this year have gone the other way (such as Oracle-Endeca, Google-ITA, eBay-Where, and HP-Vertica).

Comments | Reprints | Share:          

Acquisitions and IPO announcements dominated the deals news in New England this week.

—Boston-based Third Rock Ventures put $34 million in Series A funding into Ember Therapeutics, a startup that’s developing drugs to fight obesity in a new way. Ember, also of Boston, is harnessing new understanding of the bodily tissue known as brown fat, which can help mammals burn off the more commonly known white fat tissue.

—Cerulean Pharma inked a $15 million Series D investment from new investor CVF, an affiliate of Henry Crown and Company, as well as existing backers Polaris Venture Partners, Venrock, Lilly Ventures, Lux Capital, and Bessemer Venture Partners. Cambridge, MA-based Cerulean’s lead drug is a so-called nanoparticle, a tiny chemical package designed to work its way into cancer cells and kill them.

—IBM made its 20th acquisition in the Bay State since 2003, with the purchase of Burlington, MA-based Emptoris, a maker of supply and contract management software. Emptoris has 725 employees across the globe and will become part of IBM’s software group. The financial terms of the acquisition were not disclosed.

—Coronado Biosciences  (NASDAQ: CNDO) started trading on the Nasdaq on Monday at an opening price of $6.50 per share. The formerly New York-based biotech, which moved to Burlington, MA in August, took an unconventional path to going public, by registering its private shares as common stock, rather than undergoing an IPO.

—Coskata, a cellulosic ethanol developer backed by Boston-area venture firms Advanced Technology Ventures and Greatpoint Ventures, filed documents with the SEC indicating its intent to raise $100 million in an initial public offering. The Warrenville, IL-based startup has raised $80 million in venture funding since founding in 2008, and is also backed by GE, Khosla Ventures, and Blackstone Group.

—Woburn, MA-based Excelimmune took in $12 million in financing from an undisclosed private investor to help fund the development of its molecules focused on fighting infectious diseases, like methicillin-resistant Staphylococcus aureus (MRSA).

—And in the week’s more shocking news, two speech software makers that had been battling in court over allegations like patent infringement and commercial bribery announced they would become one force. Burlington, MA-based Nuance Communications (NASDAQ: NUAN) is acquiring Cambridge-based startup Vlingo for an undisclosed sum. The deal enables the two to team up as players like Apple and Google and are focusing more on voice-enabled applications for mobile phones.

—A deal that had been talked about for more than half of this year finally went live. Newton, MA-based online travel company TripAdvisor officially began trading on the Nasdaq on its own (NASDAQ: TRIP), after being spun out by Bellevue, WA-based Expedia (NASDAQ: EXPE).

Comments | Reprints | Share: