X
insights
< Back

Q1 2013 Venture Exits Update

March 31, 2013 Wiley Becker 

M&A Down Slightly, IPOs Down Dramatically 
75% of M&A Deals IT, 12% Healthcare
Average Disclosed M&A Deal Value Down, Q1 IPOs Trading Up

Exit Poll report by Thomson Reuters and the National Venture Capital Association; 2013 annualized from Q1

There were 77 venture backed M&A transactions in Q1 2013 with $984MM in disclosed deal value.  The number of transactions fell 4% on a rolling four quarter basis, while disclosed value fell 12%.  However, the value of only 13% of transactions was disclosed in Q1 2013, while in 2012 the deal value was disclosed for an average of 26% of transactions.  Consequently, the decrease in disclosed value is not necessarily representative of the health of the M&A market.

75% of venture backed M&A transactions were IT companies in Q1 2013, while 12% were Healthcare, and 13% were in other industries.  Average disclosed M&A deal value fell from $174MM in 2012 to $98MM in Q1 2013, which again may not be representative of the M&A market due to the lower percentage of deal values disclosed.  Of disclosed deals, average values were highest in the Healthcare sector, averaging $149MM, while IT deals averaged $72MM and other industry transactions averaged $30MM in Q1 2013.

In Q1 2013, eight venture backed companies went public, raising a total of $672MM.  This was a 22% decline in the number of offerings and a 5% decline in the amount raised on a rolling four quarter basis.  While correlated, amount raised in an IPO is not necessarily representative of the valuation of companies at IPO.  Seven of the eight companies that went public in Q1 2013 are now trading up.

75% of the IPOs were IT companies and the remaining 25% were in the Healthcare industry.  Five listed on the NASDAQ and the remaining three on the NYSE.  There are now 25 venture backed companies filed publicly with the SEC for IPOs, not including those that may have filed confidentially under the JOBS Act.

John Taylor, head of research for the NVCA, noted that,

“First quarter IPO and acquisitions activity is often subdued as year-end reporting and forward planning take priority, but this year political, taxation, and sequestration concerns weighed even more heavily on the exit market for emerging growth companies… That said, public market valuations have been up recently… and quality companies tell us they are starting the process toward an exit later in the year… Barring significant adverse events, we expect stronger volume in the second and third quarters.”

The views, opinions, beliefs, conclusions, and other information expressed in this material is not given, verified, or endorsed by Square 1 Bank, a division of Pacific Western Bank. Instead, this material is solely the work of the author, and represents his views, opinions, beliefs, conclusions, and other information he wishes to present, in all cases without any manner of endorsement from or verification by Square 1 Bank, a division of Pacific Western Bank.

This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that the author believes to be reliable, but which has not been independently verified by the author or Square 1 Bank, a division of Pacific Western Bank, and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal, or other advice, nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to this material should be construed as a solicitation, offer, or recommendation to acquire or dispose of any investment, or to engage in any other transaction.

All material presented, unless specifically indicated otherwise, is under copyright to the author or Square 1 Bank, a division of Pacific Western Bank, and is for informational purposes only. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied, or distributed to any other party, without the prior express written permission of Square 1 Bank, a division of Pacific Western Bank or the author. All trademarks, service marks, and logos used in this material are trademarks, service marks, or registered trademarks of Square 1 Bank, a division of Pacific Western Bank.

Square 1 Bank is a division of Pacific Western Bank, member FDIC.

Secure email message: Your privacy is important to us. To protect your account information, we use Zixcorp Secure Mail to send and receive messages about your accounts. If you need to contact us securely, please use the Secure Email link on the Get in Touch page in the top navigation.

© 2005-2016 Square 1 Bank, a division of Pacific Western Bank. Member FDIC. All rights reserved.