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    http://www.nvca.org/pdf/IPOQ42003Final.pdf http://www.nvca.org/pdf/IPOQ42003Final.pdf Document Transcript

    • Jeanne Metzger, NVCA, 703-524-2549 ext. 116, jmetzger@nvca.org Joshua Radler, Thomson Venture Economics, 973-353-7139, joshua.radler@thomson.com Venture-Backed IPO Market Tops $1 Billion in Fourth Quarter 2003, Quarter Sees Largest Number of IPOs Since 2000 Newark, NJ- January 5, 2004—Seventeen venture-backed companies raised $1.05 billion through Initial Public Offerings (IPOs) in the fourth quarter of 2003, according to Thomson Venture Economics and the National Venture Capital Association (NVCA). The quarter marked the third consecutive increase in 2003, up substantially from the third quarter, when nine venture-backed companies completed IPOs worth $732.8 million. The fourth quarter also saw the largest total number of IPOs for one quarter since the fourth quarter of 2000, when twenty-one companies went public. The increase in venture-backed IPOs mirrors the increased activity in the overall IPO market, where a total of 46 companies went public during the fourth quarter. “The IPO market has come a long way since this time last year, but it still has room to grow,” said Mark Heesen, president of the National Venture Capital Association. “We are certainly encouraged by the optimism in the public markets but what we really want to see is the kind of corporate technology spending that will foster sustained profitability at our venture backed companies. That is what will keep the pipeline strong and help build some momentum for 2004.” Venture backed IPOS in the fourth quarter were dominated by the Medical/Health industry. This industry accounted for 5 of the 17 IPOs and $295.8 million of the $1.05 billion of the total offering amount during the quarter. The largest IPO in the Medical/Health sector was Pharmion Corporation, which had an offering amount of $84.0 million. Pharmion is backed by New Enterprise Associates, Versant Ventures, Nomura International, Domain Associates, ProQuest Investments, Bay City Capital, General Electric Pension Trust, and Aberdare Ventures. The Consumer Products and Services industry was the second largest sector, with three companies raising a total of $191.6 million. The largest IPO in Q4 was Tessara Technologies, Inc., which raised $97.5 million. Tessara’s investors include Apax Partners, Investor AB, Concord Partners, and Landmark Partners. The next largest venture- backed IPOs were: the afore mentioned Pharmion Corporation; Open Solutions, Inc., which raised $81.94 million and was backed by Menlo Ventures, Connecticut Innovations, Axiom Venture Partners, Key Principal Partners, and HNC Software; and Ctrip.com International, Ltd., which raised $75.6 million and was backed by Carlyle Group and IDG Technology Venture Investment. For full year 2003, twenty-nine venture-backed IPOs raised $2.02 billion. There were more venture-backed IPOs in 2003, compared to 2002, when only twenty-four venture-backed companies went public. However, the total offering amount in 2003 of $2.02 billion is slightly lower than 2002’s total of $2.47 billion. Market performance has been relatively strong, as twenty-four of the twenty-nine venture-backed companies (83%) that had IPOs during 2003 are currently trading at or above their offering price. Accredited Home Lenders, Inc., backed by Enterprise Partners and Crosspoint Venture Parters, experienced the greatest increase, advancing over 280% from its initial offering price. Further strengthening of the venture-backed IPO market is seen in the amount of companies that are currently “in registration” with The Securities and Exchange Commission. Thirty-one venture-backed companies that filed with the SEC during 2003 are currently preparing for their initial public offerings. This strong “pipeline” is poised to support the renewed strength of the venture-backed IPO market.
    • Analysis of Recent Quarters' IPOs Total Avg. Number Total Avg. Venture Venture of Venture Venture Backed Backed Venture Backed Backed Post Post Number Backed Offering Offering Offering Offering Quarter of IPO's in IPO's in Size Size Value Value Ending the U.S. the U.S. ($Mill) ($Mill) ($Mill) ($Mill) 43 21 1,589.5 75.7 9,300.1 442.9 12/31/2000 19 9 650.1 72.2 2,902.3 322.5 03/31/2001 26 9 710.5 78.9 4,220.6 469.0 06/30/2001 11 7 542.5 77.5 2,948.7 421.2 09/30/2001 27 16 1,586.9 99.2 7,932.4 495.8 12/31/2001 14 4 376.3 94.1 2,398.0 599.5 03/31/2002 34 15 1,836.1 122.4 5,917.6 394.5 06/30/2002 7 1 30.0 30.0 153.4 153.4 09/30/2002 26 4 231.2 57.8 523.8 130.9 12/31/2002 3 1 77.2 77.2 147.8 147.8 03/31/2003 5 2 164.0 82.0 695.3 347.6 06/30/2003 19 9 732.8 81.4 3,064.5 340.5 09/30/2003 46 17 1048.7 61.7 4,349.9 255.87 12/31/2003 Thomson Venture Economics & National Venture Capital Association Analysis of Recent Years' IPOs Total Avg. Number Total Avg. Venture Venture of Venture Venture Backed Backed Venture Backed Backed Post Post Number Backed Offering Offering Offering Offering Year of IPO's in IPO's in Size Size Value Value Ending the U.S. the U.S. ($Mill) ($Mill) ($Mill) ($Mill) 473 245 18,831.6 77.2 122,230.9 501.0 1999 340 215 20,885.5 97.1 112,088.8 521.3 2000 83 41 3,489.9 85.1 18,004.0 439.1 2001 81 24 2,473.5 103.1 8,992.8 374.7 2002 73 29 2,022.7 69.8 8,257.4 284.7 2003 Thomson Venture Economics & National Venture Capital Association Bolstered by a strong fourth quarter, six Medical/Health companies raised a total of $347.7 million, with a total post-offering value of $1.29 billion in 2003. The Financial Services industry followed, with four companies raising a total of $322.0 million. The Financial Services industry was lead by Direct General’s $145.6 million offering and is backed by SSM Venture Partners and Noro-Moseley Partners. The Consumer Products and Services industry and the Internet Specific industry also had four companies go public, raising a total of $256.9 million and $217.8 million, respectively. In terms of average offering size and average post offering value, the Semiconductor/Electronics industry lead both, with an average offering size of $117.0 million and an average post-offering value of $484.9 million. The
    • Semiconductor/Electronics industry was lead by the largest venture-backed IPO of the year, SigmaTel, Inc.’s $150.0 million third quarter offering. SigmaTel’s investors include Creative Technology, Battery Ventures, and INVESCO Private Capital. 2003 Venture-Backed by Industry Avg. Avg. Venture Venture Number Venture Venture Backed Backed of Venture Backed Backed Post Post Backed Offering Offering Offering Offering IPO's in Size Size Value Value the U.S. ($Mill) ($Mill) ($Mill) ($Mill) Industry Medical/Health 6 347.4 57.9 1,288.8 214.8 Financial Services 4 322.0 80.5 865.2 216.3 Consumer Products and Services 4 256.9 64.2 1,056.0 264.0 Internet Specific 4 217.8 54.5 1,302.1 325.5 Biotechnology 3 196.4 65.5 990.9 330.3 Software 3 191.1 63.7 761.0 253.7 Semiconductor/Electronics 2 234.0 117.0 969.9 484.9 Computer Hardware 1 98.0 98.0 381.2 381.2 Other 1 97.5 97.5 491.8 491.8 Business Services 1 61.6 61.6 150.4 150.4 Thomson Venture Economics & National Venture Capital Association Venture Economics Post-Venture Capital Index (PVCI) Annualized Return as of 12/31/2003 Index Year to One Year Three Five Year Ten Year Value Date Return Year Return Return Return 542.08 68.0% 68.0% -10.8% -5.2% 7.3% PVCI 1111.92 26.4% 26.4% -5.6% -2.0% 9.1% S&P 2,003.37 50.0% 50.0% -6.7% -1.8% 9.9% NASDAQ 10,453.90 25.3% 25.3% -1.0% 2.6% 10.8% DOW Thomson Venture Economics & National Venture Capital Association The Venture Economics Post-Venture Capital Index (PVCI) is a market cap weighted index of the performance of stock of all venture-backed companies taken public over the last 10 years. As the chart indicates, the PVCI has mirrored the NASDAQ in outperforming both the S&P and the Dow Jones Industrial Average over the past year. The National Venture Capital Association (NVCA) represents approximately 450 venture capital and private equity firms. The NVCA’s mission is to foster the understanding of the importance of venture capital to the vitality of the U.S. and global economies, to stimulate the flow of equity capital to emerging
    • growth companies by representing the public policy interests of the venture capital and private equity communities at all levels of government, to maintain high professional standards, to facilitate networking opportunities, and to provide research data and professional development for its members. For more information about the NVCA, please visit www.nvca.org. Thomson Venture Economics, a Thomson Financial company, is the foremost information provider for equity professionals worldwide. Venture Economics offers an unparalleled range of products from directories to conferences, journals, newsletters, research reports, and the Venture Expert™ database. For over 40 years, Venture Economics has been tracking the venture capital and buyouts industry. Since 1961, it has been a recognized source for comprehensive analysis of investment activity and performance of the private equity industry. Venture Economics maintains a long-standing relationship within the private equity investment community, in-depth industry knowledge, and proprietary research techniques. Private equity managers and institutional investors alike consider Venture Economics information to be the industry standard. For more information about Venture Economics, please visit www.ventureeconomics.com. Thomson Financial Thomson Financial is a US$2 billion provider of information and technology solutions to the worldwide financial community. Through the widest range of products and services in the industry, Thomson Financial helps clients in more than 70 countries make better decisions, be more productive and achieve superior results. Thomson Financial is part of The Thomson Corporation (www.thomson.com), a leading provider of integrated information solutions to business and professional markets worldwide. The Corporation reported 2002 revenues of US$7.8 billion and its common shares are listed on the Toronto Stock Exchange (TSX: TOC) and the New York Stock Exchange (NYSE: TOC).