Venture-backed IPOs and M&A activity decline in value

By Sarah McBride

SAN FRANCISCO, Oct (KOSDAQ: 039200.KQ - news) 1 (Reuters) - Average sizes of both initial public offerings and acquisition prices dropped for venture-backed companies last quarter as some companies battled a tough environment in their sector and others faced outsized comparisons from a year earlier.

Data from the National Venture Capital Association and Thomson Reuters showed 26 venture-backed companies held IPOs last quarter, more any quarter since the final three months of 2010, but the average offer amount dropped by 10 percent from a year ago to $103 million.

Most of the IPOs were in the life-sciences sector, which has been weaker than the technology sector, home to most of the IPOs a year earlier.

Similarly, 107 venture-backed companies were sold, down from 125 in the year-earlier period. The total disclosed value of the transactions fell to $4.88 billion, down 42 percent from $8.44 billion a year earlier. Just 31 deals disclosed their values, down from 37 a year ago.

The bulk of the merger-and-acquisitions activity was in the information technology sector, which saw some outsized deals in the year-earlier quarter. They included VMWare (NYSE: VMW - news) 's $1.26 billion purchase last year of network virtualization company Nicira Networks, Microsoft Corp's $1.2 billion acquisition of business software company Yammer, and Facebook Inc (NasdaqGS: FB - news) 's $1 billion purchase of photo-sharing service Instagram.

Global security network company FireEye held the largest IPO of the recent quarter, raising $349 million on Sept. 19. The largest M&A transaction was healthcare company Johnson & Johnson's $650 million purchase of Aragon (Xetra: A0B9N3 - news) Pharmaceuticals, a developer of anti-endocrine therapies.