Front Core Capital Pleased As Exit Market Stabilizes
The venture capital exit market today is exhibiting a welcome stability in terms of both IPOs and acquisitions.
- (1888PressRelease) May 13, 2011 - Venture-backed company exit activity showed marked improvements over the first quarter of last year, driven by continued strength in M&A and strong aftermarket IPO performance. Fourteen venture-backed IPOs valued at $1.4 billion came to market in the first quarter of 2011. This quarter marked the strongest opening three-month period for venture-backed IPOs since 2007. For the first quarter, 109 venture-backed M&A deals were reported, 45 which had an aggregate deal value of $5.9 billion.
The venture capital exit market today is exhibiting a welcome stability in terms of both IPOs and acquisitions. For more than a year, we have seen a high volume of strategic sales that are bringing in solid returns for the venture industry, coupled with an IPO market that is growing and improving steadily in terms of volume and predictability. This stability is an absolute pre-requisite for the growth we need, particularly in the capital markets where the volatility of the recession years contributed to the many challenges of companies going public. A successful 2011 will be contingent upon maintaining the momentum in the acquisitions market while moving the current IPO pipeline through at a faster clip. Ideally there would be a 20 to 30 percent increase of US venture-backed companies going public this year. Market signs currently suggest that this is a reasonable goal.
There were 14 venture-backed IPOs valued at $1.4 billion in the first quarter of 2011, a 47% increase in terms of dollars raised and a 56% increase by number of deals, compared to the first quarter of 2010. This quarter marks the strongest opening three-month period for venture-backed IPOs since 2007. Ten of this quarter`s offerings were from companies based in the United States, with one based in the Netherlands and three based in China.
For the first quarter of 2011, five companies listed on the New York Stock Exchange (NYSE) and nine listed on the NASDAQ stock exchange.
Of the 14 IPOs in the first quarter, 11 are trading at or above their offering prices as of March 31, 2011. Forty-nine U.S. venture-backed companies are currently filed for an initial public offering with the SEC.
As of March 31, 2011, 109 venture-backed M&A deals were reported for the first quarter, 45 which had an aggregate deal value of $5.9 billion. The average disclosed deal value was $130.9 million, down 11 percent from Q4 2010. By total disclosed deal value, first quarter volume marks a five percent increase from the first quarter of 2010.
The information technology sector led the venture-backed M&A landscape, with 74 deals and a disclosed total dollar value of $3.3 billion. Within this sector, computer software and services and Internet specific companies accounted for the bulk of the targets with 35 and 28 transactions, respectively, across these sector subsets.
Deals bringing in the top returns, those with disclosed values greater than four times the venture investment, accounted for 47 percent of the total during first quarter 2011. Venture-backed M&A deals returning less than the amount invested accounted for 14 percent of the quarterly total.
- About Front Core Capital -
Front Core Capital is a Venture Capital and Financial service company. Front Core Capital caters to the expectations of knowledgeable and discerning investors who seek the highest return on their investments. Front Core Capital is a wholly independent company and, as such, is not restricted in any of the funds or investment products we may wish to utilize for our clients' wealth management and financial planning purposes.
- Press Contact at Front Core Capital -
Zach Amiran, press-contact ( @ ) frontcorecapital dot com
Unit 421, Malcha Technology Park, Jerusalem 96951, Israel
8th Floor, Crystal Tower, 1-2-27 Shiromi, 540-6017, Osaka, Japan
9th Floor, Commerce Court, 199 Bay Street, Toronto, M5L 1E9, Canada
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