It’s Official: IPOs and M&As Plummeted in First Quarter—New England Exits Hard to Find

Updated and corrected, April 1, 5:15 pm—see note below

It’s not like we needed a financial report to tell us that things were rotten for investors looking for an exit—but the National Venture Capital Association and Thomson Financial are providing just that. Only five venture-backed firms managed to go public in the first quarter of 2008, none of them in New England. Meanwhile, the venture-backed M&A arena saw a meager 56 deals, down 32 percent from the 82 deals done in the first quarter of last year, which itself was 21 percent off the same period in 2006.

The IPO volume represented the lowest quarterly number since the second quarter of 2003, when only a pair of companies managed to go public, according to the report. M&A figures, meanwhile, hit one of their lowest points in a decade: only Q1 1999 (53 deals), Q3 1998 (50), and Q1 1998 (47) fared worse. Four of the five IPOs came in the medical or biotech fields, just one in computer software. It was the other way around in M&As, though, as 41 of the 56 deals were in information technology—the vast majority in the software and services and Internet sectors. There were only five life sciences acquisitions in the country, according to the report.

Despite the gloomy numbers, NVCA president Mark Heesen evidently saw some reason for optimism. “We will need to see a significant increase in volume in the remaining three quarters to salvage the rest of the year,” he predicted in the statement. And, he said, “the quality of the…exits—both IPOs and acquisitions—appears to be holding up, which should translate into some much needed confidence for venture backed companies looking to exit in 2008.”

Talk about seeing the silver lining. In any event, New England did manage to score the largest M&A deal of the quarter, but even this comes with an asterisk. That was Dell’s purchase of Nashua, NH-based network storage device maker EqualLogic for $1.4 billion, reportedly the largest all-cash acquisition of a venture-backed company in history. Even this was a stretch, though, since the deal was announced last November but apparently was effective this year.

Here’s the list of New England M&As, ranked by deal size: (Editor’s note: This list, supplied by the NVCA and Thomson Financial, originally included a reported $12 million acquisition of Cambridge’s Acceleron Pharma by Celgene. However, thanks to the reader comment below, we contacted the NVCA for clarification. They looked into it and notified us that they were removing it from the list. Thank you, Mark.)

EqualLogic (Nashua, NH) — purchased by Dell Computer — $1.4 billion

Idiom Technologies (Waltham, MA) — purchased by SDL International — $26.6 million

Groove Mobile (Bedford, MA) — purchased by NMS Communications — $14.5 million

Tribotek (Burlington, MA) — purchased by Methode Electronics — price undisclosed

And here’s the list of New England IPOs:

Oops, there is no list. But you can find our list of pulled IPOs and secondary offerings here.

Here is the list of the country’s IPOs, ranked by offering size:

IPC (California, medical/health) — $83.2 million

CardioNet (California, medical/health) — $81 million

ArcSight (California, computer software) — $61.8 million

MAKO Surgical (Florida, medical/health) — $51 million

Bioheart (Florida, biotech) — $5.8 million

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2 responses to “It’s Official: IPOs and M&As Plummeted in First Quarter—New England Exits Hard to Find”

  1. Mark Milton says:

    I don’t think that Acceleron were bought by Celgene for $12M but they did do a deal to related the development of certain products.

    Under the terms of the agreement, Celgene and Acceleron will jointly develop, manufacture and commercialize Acceleron’s products for bone loss. Celgene will make an upfront payment to Acceleron of $50 million, which includes a $5 million equity investment in Acceleron. In addition, in the event of an initial public offering of Acceleron, Celgene will purchase a minimum of $7 million of Acceleron common stock.

  2. This was the information from NVCA. We are checking it out. Thanks much Mark…Update…It looks like Mark is correct, and the NVCA just informed us they were removing it from the list.