VC-backed IPO Market Stays Hot While M&A Takes A Breather

By on July 3, 2014

stocksThe IPO window for VC-backed companies continued to stay open in the second quarter of 2014, while the M&A market slowed slightly after a busy first quarter.

There were 97 VC-backed M&A deals in the quarter, down 12.6% from 111 in the first quarter of 2014 and essentially flat with the year-ago quarter, according to the NVCA and Thomson Reuters.

Of those 97 deals, just 33 disclosed deal value–with an aggregate deal value of $3.3 billion. That’s down 56% from $7.6 billion in the prior quarter. Average deal size (again, disclosed deals only) was $98.6 million, which is the lowest since the first quarter of 2013.

Information technology was the strongest sector with 79 of the 96 deals with a disclosed total value of $1.7 billion.

The largest VC-backed M&A deal was Intuit’s $360 million acquisition of personal finance app Check, formerly known as PageOnce, which had raised $47 million in funding. The second largest was Cardinal Health’s $320 million purchase of Access Closure Inc.

Interestingly, deals that returned more than 4x the capital raised made up 45% of deals with disclosed values. However, only 33 of 97 disclosed prices so that number is likely much lower once undisclosed prices are included. For more on actual accurate deal prices in data we have, see more in our Exitround Exit Report here and here.

Meanwhile, VC-backed IPOs shot up 45% to $4.9 billion in capital raised during the second quarter of 2014 and more than doubled the year-ago period’s figure. The number of IPOs, however, was actually down from the wild first quarter. The second quarter was the fifth quarter in a row to have 20 or more VC-backed IPOs. Life sciences led in terms of sectors, with 16 of the 28 IPOs in the quarter.

Buoyed in part by the strong exit market, the venture investing market is still quite hot. VC investing valuations in the second quarter of 2014 jumped 28% from Q1 2014, according to PitchBook. Median pre-money valuation was $24.6 million, the fifth straight quarter of increasing valuations.

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2 thoughts on “VC-backed IPO Market Stays Hot While M&A Takes A Breather

  1. […] from 128 deals worth $17 billion in the first quarter of 2014. As usual, the numbers are slightly different from NVCA’s numbers (NVCA showed 97 deals compared to Dow Jones’ 108), but they are […]

  2. […] IPOS generating $4.4 billion in Q4 2014, up 17% by deals and up 68% by dollars from Q3 2014. IPOs stayed hot in the fourth quarter of 2014, with the seventh straight quarter of 20 or more VC-backed IPOs, […]

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