BC-IPO Market Stalls in Second Quarter Despite Largest Venture-Backe

(http://thomsonreuters.com)

(http://www.nvca.org)

Venture-backed initial public offering (IPO) activity marked its

strongest quarter on record, by dollars raised, bolstered by the

record-breaking offering from Facebook Inc. in May. By number of

deals, 11 venture-backed companies went public in the United States

during the second quarter of 2012, a decline of 42 percent from the

first quarter of this year and down 50 percent from the second quarter

of 2011, according to the Exit Poll report by Thomson Reuters and the

National Venture Capital Association (NVCA). For the second quarter of

2012, 102 venture-backed M&A deals were reported, 27 of which had an

aggregate deal value of $5.5 billion, a 61 percent increase from the

first quarter of 2012.

"There's no question that the psychological fallout from the Facebook

IPO, coupled with economic uncertainty in Europe, put a chill on the

public markets for most of the second quarter," said Mark Heesen,

president of NVCA. "However, as the world was fixated on a single

offering, many companies were simultaneously registering

confidentially to go public under the new JOBS Act provision, building

an IPO pipeline that started to flow in the final days of June. This

backlog, coupled with an ongoing healthy acquisitions market, suggests

that 2012 can still be strong for venture-backed exits, if the public

markets stabilize and remain open fully for the rest of the year."

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M&A Deals *Total Total Average

Total with Disclosed *Average Offer IPO Offer

Quarter/ M&A Disclosed M&A Value M&A Deal **Number Amount Amount

Year Deals Values ($M) Size ($M) of IPO's ($M) ($M)

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2007 467 201 32,053.1 159.5 93 12,163.4 130.8

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2008-1 125 41 4,560.2 111.2 5 282.7 56.6

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2008-2 91 27 3,091.9 114.5 0 0.0 0.0

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2008-3 99 36 3,596.2 99.9 1 187.5 187.5

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2008-4 74 22 2,671.7 121.4 0 0.0 0.0

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2008 389 126 13,920.0 110.5 6 470.2 78.4

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2009-1 80 17 709.5 41.7 0 0.0 0.0

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2009-2 70 13 1,996.3 153.6 6 827.4 137.9

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2009-3 92 28 1,958.7 70.0 2 465.4 232.7

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2009-4 98 45 8,412.8 187.0 5 481.3 96.3

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2009 340 103 13,077.3 127.0 13 1,774.1 136.5

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2010-1 139 36 4,960.4 137.8 9 936.3 104.0

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2010-2 106 29 3,449.0 118.9 18 1,382.7 76.8

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2010-3 128 33 3,850.5 116.7 15 1,558.0 103.9

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2010-4 128 47 6,344.9 135.0 32 3,555.6 111.1

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2010 501 145 18,604.8 128.3 74 7,432.5 100.4

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2011-1 138 52 6,210.2 119.4 14 1,375.8 98.3

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2011-2 96 41 6,458.7 157.5 22 5,454.0 247.9

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2011-3 136 41 6,749.3 164.6 5 442.9 88.6

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2011-4 119 37 4,936.6 133.4 12 2,648.9 220.7

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2011 489 171 24,354.8 142.4 54 11,171.1 206.9

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2012-1 102 26 3,441.3 132.4 19 1,517.9 79.9

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2012-2 102 27 5,541.2 205.2 11 17,059.8 1550.8

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2012 204 53 8,982.5 169.5 30 18,577.7 619.3

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Source: Thomson Reuters & National Venture Capital Association

*Only accounts for deals with disclosed values

**Includes all companies with at least one U.S. VC investor that trade on

U.S. exchanges, regardless of domicile.

IPO Activity Overview

There were 11 venture-backed IPOs valued at $17.1 billion in the

second quarter of 2012, which, powered by Facebook Inc.'s $16.0

billion offering, marked the largest quarter for dollars raised by

venture-backed companies on record. By number of deals, quarterly

volume fell 42 percent from the first quarter of this year and 50

percent from the second quarter of 2011.

Nine of the 11 IPOs of the quarter were IT-related IPOs representing

82 percent of the total issues for in the quarter. By location, all of

the quarter's 11 IPOs were by U.S.-based companies with eight coming

from the state of California, two from Massachusetts and one from

Maryland.

In the largest IPO of the quarter and the largest venture-backed IPO

on record, Facebook Inc. (FB), an online social network based in Menlo

Park, California, raised $16.0 billion and began trading on NASDAQ on

May 18th.

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Q2 2012

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*Number of Total Venture-

Venture-Backed Backed Offering

Industry IPO's in the U.S. Size ($M)

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Communications and

Media 4 361.7

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Internet Specific 2 16,065.4

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Computer Software

and Services 3 501.7

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Information

Technology 9 16,928.8

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Biotechnology 1 81.0

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Medical/Health 1 50.0

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Life Sciences 2 131.0

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TOTAL 11 17,059.8

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Source: Thomson Reuters & National Venture Capital Association

*Includes all companies with at least one U.S. VC investor that trade on

U.S. exchanges, regardless of domicile

For the second quarter of 2012, eight companies listed on the NASDAQ

stock exchange and three companies listed on the New York Stock

Exchange.

Nine of the 11 companies brought to market this quarter are currently

trading above their offering price. There are 44 venture-backed

companies currently filed for an initial public offering with the SEC.

This figure does not include confidential registrations filed under

the JOBS Act.

Mergers and Acquisitions Overview

As of June 29th, 102 venture-backed M&A deals were reported for the

second quarter of 2012, 27 of which had an aggregate deal value of

$5.5 billion. The average disclosed deal value was $205.2 million, a

55 percent increase from the first quarter of 2012.

The information technology sector led the venture-backed M&A landscape

with 77 of the 102 deals of the quarter and had a disclosed total

dollar value of $2.6 billion. This was an increase of 24 percent from

the first quarter of 2012. Within this sector, Computer Software and

Services and Internet Specific deals accounted for the bulk of the

targets with 36 and 23 transactions, respectively, across these sector

subsets.

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Q2 2012

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Number of

Venture- Total

Number of Backed M&A Disclosed

Venture- deals with a Venture-

Backed M&A disclosed Backed Deal

Industry deals value Value ($M)

------------------------------------------------ ---------------------------

Computer Software

and Services 36 7 568.4

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Internet Specific 23 6 1,106.3

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Communications and

Media 10 2 143.4

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Computer Hardware 4 2 560.0

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Semiconductors/Other

Elect. 4 1 206.0

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Information

Technology 77 18 2,584.0

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Medical/Health 11 6 1,593.4

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Biotechnology 4 1 153.8

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Life Sciences 15 7 1,747.2

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Other Products 3 1 435.0

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Consumer Related 3 - -

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Industrial/Energy 4 1 775.0

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Non-High

Technology 10 2 1,210.0

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TOTAL 102 27 5,541.2

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Source: Thomson Reuters & National Venture Capital Association

The largest venture-backed M&A deal of the second quarter was

Amazon.com's $775 million acquisition of Kiva Systems, a North

Reading, Massachusetts-based maker of automation technology systems

for distribution centers.

Deals bringing in the top returns, those with disclosed values greater

than four times the venture investment, accounted for 52 percent of

the total disclosed transactions during second quarter of 2012, down

slightly from the first quarter of this year. Venture-backed M&A deals

returning less than the amount invested accounted for just 11 percent

of the quarterly total.

Analysis of Transaction Values versus Amount

Invested

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Relationship between transaction value and

investment Q1 12 M&A ** Q2 12 M&A**

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Deals where transaction value is less than total

venture investment 5 3

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Deals where transaction value is 1-4x total

venture investment 6 10

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Deals where transaction value is 4x-10x total

venture investment 12 5

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Deals where transaction value is greater than 10x

venture investment 3 9

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Total Disclosed Deals 26 27

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Source: Thomson Reuters & National Venture Capital Association

** Disclosed deals that do not have a disclosed total investment amount are

not included

About Thomson Reuters

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http://thomsonreuters.com(http://ctt.marketwire.com/?release=905401&id=1771747&type=1&url=http%3a%2f%2fthomsonreuters.com%2f).

About National Venture Capital Association

Venture capitalists are committed to funding America's most innovative

entrepreneurs, working closely with them to transform breakthrough

ideas into emerging growth companies that drive U.S. job creation and

economic growth. According to a 2011 Global Insight study,

venture-backed companies accounted for 12 million jobs and $3.1

trillion in revenue in the United States in 2010. As the voice of the

U.S. venture capital community, the National Venture Capital

Association (NVCA) empowers its members and the entrepreneurs they

fund by advocating for policies that encourage innovation and reward

long-term investment. As the venture community's preeminent trade

association, NVCA serves as the definitive resource for venture

capital data and unites its more than 400 members through a full range

of professional services. For more information about the NVCA, please

visit

www.nvca.org(http://ctt.marketwire.com/?release=905401&id=1771750&type=1&url=http%3a%2f%2fwww.nvca.org%2f).

Press Release (PDF):

http://hugin.info/142273/R/1623371/518928.PDF(http://ctt.marketwire.com/?release=905401&id=1771753&type=1&url=http%3a%2f%2fhugin.info%2f142273%2fR%2f1623371%2f518928.PDF)

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