U.S. venture capitalists ended 2007 on a very high note, garnering nearly $16.2 billion in liquidity from the sale of 106 venture-backed companies and more than $2 billion from the initial public offerings (IPOs) of 26 others during the fourth quarter, according to today's Quarterly U.S. Liquidity Report from Dow Jones VentureSource. The strong quarter pushed the annual total for venture-backed liquidity to roughly $52.9 billion, the highest yearly total since 2000.
The totals raised via mergers and acquisitions (M&As) in the fourth quarter of 2007 were more than double the amounts raised over the same period last year. Likewise, IPOs saw a 65% jump in amounts raised compared to the same quarter in 2006. "Without question, 2007 was a banner year for venture-backed liquidity," said Jessica Canning, Director of Global Research for Dow Jones VentureSource. "Not only did the industry have the largest number of completed public offerings since 2000 with 74, but it also saw the annual median amount raised at IPO break $75 million for the first time on record. Likewise, the median post-valuation for companies completing M&As in 2007 reached $97.5 million, just under the $100 million record set in 2000."
The report showed that information technology (IT) companies accounted for the bulk of the capital raised via M&A in the fourth quarter with 61 transactions generating more than $7.9 billion in liquidity, a near-40% increase for the segment over the fourth quarter of 2006. Software companies proved to be an acquirer favorite, as 28 of these companies garnered more than $3.2 billion through M&A transactions in the fourth quarter, nearly double the $1.7 billion the segment produced in the same time last year. Overall for 2007, 270 IT companies raised more than $26.1 billion in M&A transactions, a 30% increase over 2006.
Source: PRnewswire.com