M&A Gone Wild

The bottom-feeding frenzy is on.

Startups in record were sold off in the first quarter of 2010, marking the largest number of venture-backed companies to change hands since the National Venture Capital Association began tracking in 1975.

"The exit activity in first quarter of 2010 has engendered a cautious optimism within the venture capital industry,” said Mark Heesen, president of the NVCA, in a statement.

For the quarter ended March 31, 111 venture-backed were sold in M&A transactions compared with 64 deals in the same quarter a year ago. The average disclosed price companies went for was $180.2 million, according to the report.

Leading the boom was IT with 81 transactions worth a combined $2.3 billion. Life sciences came in at No. 2 with 21 deals reaching a combined $2.9 billion.

The largest venture-backed transaction of the quarter went to Ethicon's acquisition of Menlo Park, California, surgical devices maker Acclarent, which sold for $785 million.

IPOs showed signs of life as well, according to the report.

The first quarter of 2010 saw nine venture-backed IPOs come to market valued at $936.2 million, a figure that compares with zero IPOs for the same quarter a year ago. The largest IPO of the quarter went to Ironwood Pharmaceuticals, which raised $187.5 million.

Also, initial public offerings were continuing to trade above water post-IPO. Of the nine that went public, eight were trading at or above their offering price as of March 31.05 April 2010, 12:33 by Red Herring Staff

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