Montgomery & Co. review and outlook of venture-backed companies and the M&A markets:
1) There were over 7,000 private and independent venture‐backed companies at the end of 2008. There are 800 independent companies with venture investment dating 10 years or more. This level would double within 18 months unless M&A accelerates.
2) We expect pressure on venture firms to achieve realizations combined with consolidation of the growth sectors to drive M&A activity to 50% above historic levels by 2011.
3) We expect an increase in M&A as strategics accelerate their acquisition activity.
4) We project the median consideration for M&A to recover, but remain below recent levels
5) The total consideration of venture‐backed M&A will reach $60 billion per annum by 2013.
6) “IPO ready” companies have been delayed by the economic downturn, but we expect a recovery in the IPO market—which will also boost M&A activity.
7) Investment returns for venture investors will remain largely driven by M&A exits.
The Return of M&A: An Outlook For The Venture Industry -
