Q1 venture-backed exits down

It’s said in polite society that if you can’t say something nice, don’t say anything at all.

Luckily financial reporters aren’t held to the polite society standard. Otherwise this past quarter’s venture exit data would make for very short reading.

Only five venture-backed IPOs totaling $282.7 billion in proceeds were issued in January, February and March. The volume represents the lowest quarterly number of new public offerings since the second quarter of 2003, when there were two issues, according to a report released last week by the National Venture Capital Association and Thomson Financial (publisher of PE Week).

The venture-backed M&A market was also slow, with only 56 deals. Of those, 20 had disclosed valuations for a combined total of $2.5 billion. The acquisitions volume represented one of the lowest quarterly levels in the past decade.

The life sciences sector saw the majority of venture-backed companies come to market, with four IPOs raising $221 million during the first quarter. The largest life sciences IPO exit of the quarter was the $83 million issue by North Hollywood, Calif.-based IPC Inc., which co-ordinates care of hospitalized patients. Investors in the company include Scale Venture Partners, Bessemer Venture Partners, Morgenthaler Ventures, CB Health Ventures and Crucible Group.

Just one information technology company went public during the first quarter, security solutions provider ArcSight, which raised $62 million in its IPO. Venture investors in ArcSight included Institutional Venture Partners, Kleiner Perkins Caufield & Byers, Integral Capital Partners, In-Q-Tel and Samsung Venture Investment Corp.

As of late March, 28% percent of the venture-backed companies that went public during the previous12-month period were trading at or above their offering price.

The IT sector dominated the venture-backed M&A landscape, with 41 deals and a disclosed total dollar value of about $2 billion. Life sciences deals accounted for nearly $230 million of M&A exits.

The largest disclosed deal of the quarter was the $1.4 billion acquisition of EqualLogic, a developer of storage area network solutions acquired by Dell in January. —Joanna Glasner