VC-BACKED M&A SNAPSHOT

Q1 2011
APRIL 2011
VC-BACKED M&A SNAPSHOT

OVERVIEW COMMENTARY FOLLOWING ANALYSIS

As we highlighted earlier this week in our Q1 M&A Snapshot, overall M&A activity SUMMARY OF VC-BACKED SUMMARY OF QUARTERLY ACTIVITY
IN NUMBERS AND TONE
levels in our sector accelerated with a good overall tone.  Similarly, venture M&A EXITS:
capital-backed M&A volume was up by 35%.

Summary observations for the quarter include:

VC-BACKED M&A TRANSACTIONS: LISTING OF TRANSACTIONS
BETWEEN $25MM-$1B IN VALUE,
1. The median return on invested capital was a very healthy 5.4x(a)

2. Five transactions provided extraordinary high returns to investors (in excess of

or equal to 9.0x invested capital):

Trx Value/
Buyer / Seller Inv. Cap Seller Description
Salesforce / Radian6 37.1x Social media monitoring
AOL / GoViral 11.0x Online video distribution network
Skype / Qik 9.2x Mobile video streaming service
Concur / TripIt 9.2x Online travel management
Facebook / Snaptu 9.2x Rich mobile apps for feature phones
Broadcom / Provigent 9.0x SoC for wireless networks

3. Total liquidity to VCs increased from Q4 2010 levels by 31%.

4. Non-U.S. sellers comprised 37% of transactions. Seven out of ten of these

companies were backed by local region VCs.

(a) Note: Data pertains to 23 transactions in the quarter (out of a total of 27), where both
acquisition price and total invested capital were disclosed.

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VC-BACKED M&A SNAPSHOT - SUMMARY
COVERAGE MARKET TONE
Architect Partners tracks venture capital-backed M&A activity within Quality businesses with momentum attract close
the converging Internet | mobile | digital media sectors. The assessment although buyers remain prudent and
following assessment is focused on venture capital-backed M&A move at a moderate pace. Valuations solid to
transactions with announced values of between $25mm and $1b as robust.
these typically represent successful business-building endeavors.
We also include transactions with unannounced values which we
believe are within $25mm-$1b range.
2010 2011
Q1 Q2 Q3 Q4 Q1

26
20 20
8
3 4
27
17 18 16
12
Venture-Backed M&A Exits (#)1......................................................................
$4.2
$3.4 $3.2
$2.3
$1.4

Total Consideration Paid ($b)2,4........................................................................

$135
$124
$103
$70 $70

Median Transaction Size ($mm)2,4....................................................................

85%
74% 75%
67% 63%

U.S.-based Target (%)3.......................................................................................

Note:
1) Dark blue includes VC-backed M&A transactions with announced values of between $25mm and $1b.
Light blue includes VC-backed M&A transactions where consideration paid was 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 with announced and unannounced values.
4) Transaction values within a range are presented as a mid-point value
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VC-BACKED M&A SNAPSHOT - TRANSACTIONS
Below, we highlight Venture Capital-backed transactions that have announced values of between $25mm and $1b.

ACQUISITION INVESTED MULTIPLE OF TARGET M&A

TARGET ACQUIRER PRICE ($mm) CAPITAL ($mm) INV. CAPITAL VENTURE CAPITAL FIRMS LOCATION ALERT
$436 $244 (a) 1.8x

$360 $40 9.0x

Stata Venture Partners

$350 $10 37.1x

$315 $37 8.5x

$306 $59 5.2x

$277 ND ND

$263 $53 5.0x

$225 $41 5.5x

$190 $50 3.8x Vodafone Ventures

Time Warner Investments

$136 $15 9.2x

$125 $28 4.5x

$120 $13 9.2x

$115 ND ND

$103 $59 (a) 1.8x

$100 $13 7.6x Women’s Growth Capital Fund

$100 $19 5.3x

$97 $9 11.0x

$95 $24 4.1x

$89 ND (a) ND

$80 $69 1.2x

Note:
ND= Funding information undisclosed
a) Represents public company at time of acquisition. Funding is cumulative private financing for the company.
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VC-BACKED M&A SNAPSHOT - TRANSACTIONS (continued)
ACQUISITION INVESTED MULTIPLE OF TARGET M&A
TARGET ACQUIRER PRICE ($mm) CAPITAL ($mm) INV. CAPITAL VENTURE CAPITAL FIRMS LOCATION ALERT
$65 $12 5.7x

$61 ND ND

$58 $7 8.3x

$55 $6 9.2x

$45 $32 1.4x

$34 $10 3.3x

$31 $8 3.9x

Average 7.0x
Median 5.4x

Note:
ND= Funding information undisclosed
a) Represents public company at time of acquisition. Funding is cumulative private financing for the company.