NewswireToday - /newswire/ -
Jerusalem, Israel, 2011/07/11 - In the second quarter, acquirers bought 91 companies for $9.2 billion, a 13% drop in M&A activity from the same period last year when 105 acquisitions netted $7.2 billion - RitterGroup.com.
As the public markets warm up to venture-backed companies, corporate acquirers are pulling back. In the second quarter of 2011, 109 venture-backed companies achieved liquidity, netting $11.2 billion. That represents a 13% decrease in exits and 26% increase in capital raised from the second quarter of 2010.
In the second quarter, acquirers bought 91 companies for $9.2 billion, a 13% drop in M&A activity from the same period last year when 105 acquisitions netted $7.2 billion. Information Technology (IT) was the most active area for acquisitions. Driven by interest in Software companies, the IT industry saw 38 M&As net $3 billion. Consumer Services, which includes consumer Web companies, was the second most active industry for acquisitions as 21 companies were bought for $2.1 billion.
While most M&As involved corporations buying venture-backed companies, eight start-ups sold themselves to other venture-backed companies, accounting for 9% of the quarter's M&As.
Buyouts of venture-backed companies by private equity firms also tracked below the same period last year. Private equity firms bought four venture-backed companies for $283 million in the most recent quarter, down slightly from the same period last year when private equity firms bought five companies for $832 million.
The $64 million median amount paid for a venture-backed company in the most recent quarter was slightly less than the $66 million median in the same period last year.
To reach an M&A or buyout, companies raised a median of $19 million in venture financing, on par with the same period last year, and took a median of 5.6 years to build their company, slightly more time than the 5.5-year median in the second quarter of last year.
Fourteen venture-backed companies went public in the second quarter, raising $1.7 billion, a slight drop in activity from the 15 IPOs that raised $859 million during the same period last year. With a total of 25 IPOs in the first two quarters, however, IPO activity is tracking ahead of the first six months of 2010, and for the first time since 2007 IPO activity has been in double-digits for three consecutive quarters.
The median amount of venture capital raised prior to an IPO rose 55% to $109 million in the second quarter of 2011. The median amount of time it took a company to reach liquidity fell to 8.6 years from 9.3 years in same period last year.
About Ritter Group
Ritter Group (rittergroup.com) is a premier provider of seed and early stage venture capital for innovative companies. Ritter Group works tirelessly to be the best across a global market and global technology areas including Biotechnology, Clean-tech, Information technology, Telecommunications, Diagnostic technology and Medical technology. Ritter Group provides unparalleled help and trusted advice across key aspects of company building including strategy, recruiting and business development.
Barbara Gould, Ritter Group Media Coordinator, press[.]rittergroup.com/.