The National Venture Capital Association (NVCA) just released a report that showed that the average disclosed mergers and acquisitions transaction value reached in highest level since 2000 in Q3, 2007.
Of note, 67 venture-backed mergers or acquisitions were completed for a disclosed total value of $7.7 billion according to the Exit Poll report by Thomson Financial and the NVCA. These numbers represent a 104% increase from Q3, 2006, when 41 disclosed deals equaled $3.8 billion in value. Better yet, the average disclosed acquisition value hit its highest mark since Q4, 2000.
In Q3, 2007 there were also 12 venture-financed initial public offerings (IPOs) representing $945.2 million, which represents some increase over this same quarter last year which saw eight offerings representing $934.2 million.
However, while the NVCA applauded venture-backed companies success in navigating stock market volatility and subprime hurdles, "exit strategies will be facing challenges over the next several quarters." Their data reveals that the closing period for acquisitions is extending and that VC-backed companies are trading below their offering prices, "signaling potential market weakness."
From a market threat standpoint, it is important to note that while these issues are "surmountable" they do have the potential to force business course corrections and thus impact the overall health of the exit market.
Shivonne Byrne, Innuity CMO
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