Venture-Backed Buyouts at Record Volume as Increasing Pace of Exits Mark Possible Recovery

Xconomy National — 

Initial public offerings and acquisitions surged for venture-backed companies during the fourth quarter of 2010. The results suggest a recovery in the overall pace of “liquidity events” since the capital crisis of 2008, which triggered a painful economic recession throughout the U.S. and elsewhere.

Most of the IPO activity was driven by Chinese companies going public on U.S. exchanges, according to a report by Thomson Reuters and the National Venture Capital Association (NVCA). But there are signs of overall improvement as the post-IPO performance of venture-backed companies strengthened, along with acquisition values in 2010.

The report counted 32 venture-backed IPOs with a total value of nearly $3.6 billion during the last three months of 2010—almost three times the 12 IPOs that took place during the full year in 2009. Of those 32 deals, 17 were ventures based in China, including SinoTech Energy, a Beijing-based provider of enhanced oil recovery services that raised almost $168 million on the Nasdaq exchange.

Altogether, the report counted 72-venture-backed IPOs for full-year 2010—a six-fold increase over 2009. Another 42 venture-backed companies have currently filed with the Securities and Exchange Commission for an initial public offering, according to the report.

In a statement from the NVCA, president Mark Heesen says, “In 2010 we moved from ‘abysmal to viable’ in the venture-backed IPO market. The number of offerings has improved in large part due to Chinese venture-backed companies going public on U.S. exchanges. We would like to see U.S. company IPOs grow at this pace in the coming year.”

The report also counted 88 venture-backed M&A deals during the fourth quarter, which was a decline from the 111 M&A deals reported during … Next Page »

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