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Print Edition StoriesFriday, January 2, 2009
VC-backed firms end 2008 with few IPOs, M&As
By Mass High Tech staff
How is the economic crisis affecting tech companies?
A big goose egg — that’s what venture-capital-backed companies reported when it came to U.S. IPOs in the fourth quarter. Just seven VC-backed companies completed initial public stock offerings in all of 2008, according to newly released data. And not a single VC-backed startup from New England made it to an IPO on the year.
At the same time, mergers and acquisition deals generated just $3.9 billion from 65 VC-backed companies — the lowest quarterly transaction number since 1999 and far below the 123 companies sold for $16.4 billion in the fourth quarter of 2007, according to Dow Jones VentureSource.
Among the largest M&A deals reported in the fourth quarter, just one involved a Boston-area company: Nuance Communications Inc.’s purchase of SnapIn Software Inc. of Bellevue, Wash., which it closed in October.
The largest M&A deal of 2008 was Dell’s (Nasdaq: DELL) $1.4 billion acquisition of New Hampshire-based data storage company EqualLogic Inc. — a deal that was named a winner in Mass High Tech’s Tech Dealmaker awards this fall. That deal was announced in the fourth quarter of 2007 but closed in January 2008.
The only other New England company to make Dow Jones’ list of the top eight M&A deals of 2008 was Westborough-based OptaSite Inc.’s September acquisition of SBA Communications Corp., a Florida-based cell tower company, for $430 million.
Overall, U.S. venture-backed companies generated $24.1 billion in liquidity through IPOs and M&As in 2008, down 58 percent from the $57.6 billion in liquidity produced in 2007, according to this morning’s report. The seven companies that reached IPO in 2008 raised $551 million — nowhere near the $6.8 billion from 76 public stock listings in 2007. The IPO totals were the lowest recorded since VentureSource began tracking the industry in 1992, Dow Jones officials said.
The largest M&A deal in the fourth quarter was eBay’s $945 million acquisition of Timonium, Md.-based transaction service provider Bill Me Later Inc.
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