VC-Backed M&A Spikes In Q4 2014 Paced By Facebook-Whatsapp Deal
Acquisitions of venture-backed companies had the strongest quarter in Q4 2014 since the dot-com era, powered by Facebook’s $19.5 billion Whatsapp deal closing. Meanwhile, initial public offerings remained strong, notching an IPO record not seen since 2000, according to data released by NVCA and Thomson Reuters.
The fourth quarter of 2014 continued a hot streak for M&A, with the second largest quarter for venture backed M&A since 1994. The only other larger quarter was Q2 2000. Facebook’s $19.5 billion acquisition of Whatsapp (which closed in October) provided a major boost in the quarter. (Facebook also earlier in July purchased Oculus VR for $1.9 billion.) Johnson & Johnson made the second largest acquisition of the quarter, paying $1.8 billion for Alios BioPharma.
There were 95 M&A deals in Q4 2014, with 29 disclosed deal prices totaling $26.4 billion. That’s up 307% in dollars from Q3 2014 and 396% from the year-ago period. By number of deals, however, Q4 2014 was down from a busy Q3 2014 from 133 to 95, although it ticked up slighted from the year ago quarter of Q4 2013 from 93 to 95.
During 2014, there were 455 M&A deals, making 2014 the best year for VC-backed M&A since 2012.
Even without including Facebook’s massive Whatsapp deal, 2014 still totaled $26.5 billion in disclosed M&A dollars, which is up 57% from 2013 and the biggest year for US VC-backed M&A since 2007.
There were 27 VC-backed 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, which hasn’t happened since the dot-com era in Q4 2000.
Life sciences made up 16 of the 27 deals in the quarter. Biotechnology in particular had a strong year, with 59 biotech deals in the full year 2014 – the strongest year for the sector since 1994. Twenty of the 27 companies to list in Q4 2014 are trading at or above their offering prices.