vc backed ma snapshot q2 2013
DESCRIPTION
Venture capital-backed M&A transactions within the Internet | Mobile | Digital Media sectors Q2 2013TRANSCRIPT
VC-BACKED M&A SNAPSHOTQ2 2013
July 11th 2013
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OVERVIEW COMMENTARY
Despite the lower overall M&A activity levels in Q2 (see our Q2 2013 M&A Snapshot), venture-backed M&A exits remained relatively consistent with Q1 2013 levels, as we saw 11 transactions within the $25mm - $1b range. Total consideration paid for VC-backed companies was equal to Q1‘s value of $2.1b.
Summary observations for the quarter include:
The largest venture-backed exits this quarter were Google’s $1.3b acquisition of crowdsourced traffic app, Waze, representing a 19.4x investment return and Yahoo’s $1.1b acquisition of micro-blogging social network, Tumblr, representing a 8.8x return on invested capital.
The median return on invested capital was 8.8x(a)
Five transactions within the $25mm - $1b value range provided >10.0x invested capital multiple returns to investors:
U.S. sellers comprised 72% of total VC-backed transactions within Q2 2013.
FOLLOWING ANALYSIS
SUMMARY OF VC-BACKED M&A EXITS:
VC-BACKED M&A TRANSACTIONS:
SUMMARY OF QUARTERLY ACTIVITY IN NUMBERS AND TONE
L I S T I N G O F V C - B A C K E D TRANSACTIONS.
VC-BACKED M&A SNAPSHOT
Trx Value/Invested Cap
37.8x26.0x17.6x12.1x
10.0x
Seller Description
Tween-focused Youtube channel Mobile app location-based servicesMarketing automation platformMobile backend-as-a-service platformEnterprise class storage
(a) Note: Data pertains to 10 transactions in the quarter (out of a total of 11), where both acquisition price and total invested capital were disclosed between the $25mm - $1b range.
Buyer / Seller
Dreamworks / AwesomenessTVAruba / Meridian AppsAdobe / Neolane Facebook / ParseFusion-io / Nexgen Storage
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COVERAGEArchitect 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 two transactions with announced values above $1b.
Note: 1) Dark blue includes VC-backed M&A transactions with announced values of between $25mm and $1b. Light blue includes notable VC-backed M&A transactions where consideration paid was >$1b or 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 $1b.3) Percentage is based on U.S. target, calculated based on cumulative transactions.4) Transaction values with a range are presented as a mid-point value
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MARKET TONEAverage. Relatively consistent number of VC-backed exits and total consideration paid. Quality businesses with momentum will continue to attract strong interest. Strategic-driven transactions command premium values.
Venture-Backed M&A Exits (#)1............................
Total Consideration Paid ($b)2,4............................
Median Transaction Size ($mm)2,4........................
U.S.-based Target (%)3.............................................
27
21
2011 Q2 Q3 Q4
16
25
2012Q1 Q2 Q3 Q4
20
15
VC-BACKED M&A SNAPSHOT - SUMMARY
75% 84%
73% 75%
12 16 15 12
9 5
3
$129 $152
$76
$112
$1.8
$3.7 $3.8 $3.1
4
2013Q1 Q2
1427 23 23 19
4 2
$4.2 $3.4 $3.6
$2.3
$103 $104 $80
$95
63% 64% 67% 73%
12 16 12 11
9
2 2
13
$1.8
$3.7
$2.1 $2.1
$129 $152
$123 $150
63% 64% 71% 72%
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Source: Architect Partners, Capital IQ and Public Information
Below we highlight Q2 2013‘s venture capital-backed M&A exits. This list contains transactions within the $25mm to $1b value range as well as two transactions exceeding $1b.
VC-BACKED M&A SNAPSHOT - TRANSACTIONS
INVESTED
CAPITAL ($mm)TARGET ACQUIRER
ACQUISITION
PRICE ($mm) VENTURE CAPITAL FIRMS
MULTIPLE OF
INV. CAPITAL
$1,300
$1,100
$600
$370
$310
$180
M&A
ALERT
TARGET
LOCATION
$67
$125
$34
$60
$84
$34
19.4x
8.8x
17.6x
6.2x
3.7x
5.3x
5
Source: Architect Partners, Capital IQ and Public Information
Below we highlight Q2 2013‘s venture capital-backed M&A exits. This list contains transactions within the $25mm to $1b value range as well as two transactions exceeding $1b.
VC-BACKED M&A SNAPSHOT - TRANSACTIONS
INVESTED
CAPITAL ($mm)TARGET ACQUIRER
ACQUISITION
PRICE ($mm) VENTURE CAPITAL FIRMS
MULTIPLE OF
INV. CAPITAL
$151
$150
$120
$90
$85
$30
$26
M&A
ALERT
TARGET
LOCATION
$4
NA
$12
$12
$7
$10
$1
37.8x
NA
10.0x
7.5x
12.1x
3.0x
26.0x