Mergers and acquisitions (M& As) of venture capital-backed companies in the United States surged in the fourth quarter last year, setting the stage for a promising 2010, Dow Jones Venture Source said on Monday.
According to numbers from the industry tracker, corporate acquirers snapped up 86 U.S. venture-backed companies for a total of 7.3 billion U.S. dollars in the last three months in 2009, an increase of 49 percent compared with the same period in the previous year.
During the quarter, three venture-backed companies completed initial public offerings (IPOs), together raising 220 million dollars.
Throughout 2009, U.S. venture-backed companies generated 17.1 billion dollars in liquidity, down 34 percent from 2008.
Forty-four percent of last year's total liquidity was generated in the fourth quarter and the increased M&A activities in the quarter are seen as a positive sign for the New Year.
"The fourth quarter has set the stage for an active year in M& As in 2010," Jessica Canning, director of global research for Dow Jones Venture
Source, said in a statement.
"As the economy improves, acquirers are gaining confidence in their own financial situation and returning to strategic acquisitions," she added.
Although IPOs of venture-backed companies were still sparse in 2009 with only eight companies completing public offerings, Canning said investors are expecting the IPO window will re-open in the New Year.
"With 25 venture-backed companies currently in IPO registration, it is clear that many entrepreneurs and their investors expect the market to improve in the coming year," she noted.