The first quarter of 2012 rang the bell like Wall St. was getting back to business. Dow Jones Venture Source recently released a report that showed Q1 of 2012 as the most active quarter for IPOs since the fourth quarter of 2007. That’s thanks to 20 companies that went public that quarter, including the likes of Yelp, Brightcove, and others. Those 20 companies managed to raise $1.4 billion in public offerings that quarter, a significant improvement from the 11 IPOs that raised $768 million of the first quarter of the previous year.
On the other side of the CEO wish list, 94 companies were acquired during the same period, marking the second straight quarter for declining value on the M&A scale. Yet they managed to fetch higher price tags. For the first quarter, 94 mergers, acquisitions or buyouts raised $18.1 billion in the first quarter, marking a 32 percent decrease in deals but a 42 percent increase in capital. The median price paid for a company hit $190 million, up from $43 million during the same period last year.
“Greater stability in the public markets, more corporations opening venture units to work closely with startups without acquiring them, and a continued disconnect between entrepreneurs’ asking price and what corporations are willing to pay have contributed to a steady decline in M&A activity,” said Jessica Canning, global research director for Dow Jones VentureSource.
Currently 50 companies with US venture investments are in IPO registration, including 13 that filed during the first quarter of 2011.
“Big exits by Groupon and Zynga dominated the end of 2011, but small- and mid-cap IPOs have taken center stage so far this year,” said Zoran Basich, editor of Dow Jones VentureWire. “The public markets proved receptive to a broad range of companies, which is a positive sign for the industry.”
Those exists also put more money on the acquisition table. Groupon acquired six venture companies in the first quarter, roughly double the companies it bought for all of the previous year. Google, which topped last year’s list with a total of 12 acquisitions, has so far taken the year off with no acquisitions for the first quarter.