vc backed m&a snapshot q1 2012

8/2/2019 VC Backed M&A Snapshot Q1 2012

http://slidepdf.com/reader/full/vc-backed-ma-snapshot-q1-2012 1/5

VC-BACKED M&A SNAPSHOT

Q1 2012

APRIL 2012



1.

2.

3.

4.

OVERVIEW COMMENTARY

Consistent with overall M&A activity, in Q1 2012, VC-backed M&A activity also

shows a good overall tone. Median transaction size increased by 36% from $95to $129, although VC-backed M&A exits within the $25mm and $1b rangedecreased from 19 to 12. Although activity levels have been down for the pasttwo quarters, we believe we’ve already seen the trough and expect M&A activityto increase for the foreseeable future.

Summary observations for the quarter include:

China-based Youku’s $1b+ acquisition of Tudou represents the largest VC-backed transaction this quarter.

The median return on invested capital was a healthy 6.1x(a)

Six transactions that provide >8.0x invested capital multiple returns toinvestors are provided below:

Buyer / Seller

Apple/ChompCisco/LightwireAMD/SeaMicroZynga/OMGPOPShoreTel/M5 NetworksSingTel/Amobee

Non-U.S. sellers comprised 25% of transactions. All of these four companieswere backed by local region VCs.

FOLLOWING ANALYSIS

SUMMARY OF VC-BACKED

M&A EXITS:

VC-BACKED M&A TRANSACTIONS:

SUMMARY OF QUARTERLY ACTIVITYIN NUMBERS AND TONE

L I S T I N G O F V C - B A C K E D

TRANSACTIONS.

2

VC-BACKED M&A SNAPSHOT

Trx Value/ Invested Cap

19.5x19.4x16.7x10.8x8.4x8.2x

Seller Description

Mobile App Search and DiscoveryNetwork interconnect solutionsPower-bandwidth-efficient microserversOnline social gamesHosted enterprise VoIP systemMobile advertising platform

(a) Note: Data pertains to 12 transactions in the quarter (out of a total of 16), where both

acquisition price and total invested capital were disclosed.



COVERAGE

Architect Partners tracks venture capital-backed M&A activity

within the converging Internet | mobile | digital media sectors.

The following assessment is focused on venture capital-backed

M&A transactions with announced values of between $25mm and

$1b as these typically represent successful business-building

endeavors. We also include transactions with unannounced

values which we believe are within $25mm-$1b range.

Note:1) Dark blue includes VC-backed M&A transactions with announced values of between $25mm and $1b.

Light blue includes VC-backed M&A transactions where consideration paid was not announced, however we believe to have values of between $25mm and $1b.2) Total consideration paid and median transaction size are calculated based on transactions with announced values of between $25mm and $1b.

3) Percentage is based on U.S. target, calculated based on cumulative transactions.

4) Transaction values with a range are presented as a mid-point value3

MARKET TONE

Quality businesses with momentum attract close

assessment although buyers generally remain prudent and

move at a moderate pace.

VC-BACKED M&A SNAPSHOT - SUMMARY

Venture-Backed M&A Exits (#)1

...................

Total Consideration Paid ($b)2,4...................

Median Transaction Size ($mm)2,4

...............

U.S.-based Target (%)3....................................

2010

Q1 Q2 Q3 Q4

1217 18 16

3

8

4

20

26

20

$70

$135

$70

$124

67%

85%

74% 75%

$1.4

$2.3

$3.4 $3.2

27

2723 23

19

4

2

21

63% 64% 67%73%

$4.2

$3.4 $3.6

$2.3

2011

Q1 Q2 Q3 Q4

$103 $104

$80$95

2012

Q1

12

4

16

75%

$129

$1.8



Below we highlight Q1 2012‘s Venture Capital-backed transactions. This list contains transactions within the $25mm to $1b

values. We also include Youku’s $1b+ acquisition of Tudou.com and other notable transactions with undisclosed values.

4

Note: a) Represents public company at time of acquisition.

Source: Architect Partners, Capital IQ and Public Information

VC-BACKED M&A SNAPSHOT - TRANSACTIONS

TARGET

LOCATION

INVESTED

CAPITAL ($mm)TARGET

ACQUIRER

ACQUISITION

PRICE ($mm)

M&A

ALERTVENTURE CAPITAL FIRMS

MULTIPLE OF

INV.CAPITAL

$1,144

$334

$321

$271

$180

$174

$158

$100

$70

$65

$50

$43

$35

ND

ND

ND

(a)

$20

$39

$14

$17

$63

$19

$116

$18

$156

$3

$17

$60

$2

$76

ND

Average

Median

NA

16.7x

8.2x

19.4x

10.8x

2.8x

8.4x

0.9x

4.0x

0.4x

19.5x

2.5x

0.6x

NA

NA

NA

7.9x

6.1x

vc backed m&a snapshot q1 2012

Documents