While the IPO market refused to rouse itself from its recession-like repose, venture-backed merger and acquisition activity continued to rise during the second quarter, says a new report jointly released today by Venture Economics and the National Venture Capital Association (NVCA).
According to preliminary figures from Venture Economics, 76 M&A deals were completed in Q2 2001. However, while overall deal flow saw a 20% increase over the first quarter when 63 such deals were ushered through the M&A pipeline their value decreased to $2.02 billion in Q2 from $6.9 billion in Q1.
Moreover, due to the steady landslide of high-tech valuations, the average reported value of M&A deals declined significantly in the second quarter to $61.32 million from $218 million the previous quarter.
Still, the most recent M&A figures pale in comparison to those recorded in Q2 2000. All tolled, 86 deals closed during the same quarter last year. On average, each deal brought in $454 million per transaction, for a total value of nearly $26 billion.
Still, there were a few sectors that saw quite a bit of deal flow last quarter. The Internet-specific sector saw the lion’s share of M&A activity with 34 successfully completed deals worth $413.7 million. Nonetheless, it did not have the highest exit value. That distinction went to the communications and media sector, which recorded just nine deals worth a whopping $811.9 million.
In fact, data communications companies closed three of the top five deals. IONA Technologies acquired Netfish Technologies for $269 million, Advanced Digital Information bought Pathlight Technology for $264 million, and Micrel targeted Kendin Communications for $213 million.
Finally, the quarter’s largest M&A deal was Intel‘s $400 million acquisition of LightLogic.