Cycling from VC to PE: Record Number of Exits to PE in 2014
January 12, 2015
In July of last year, we noticed an increase in the number of companies venture capitalists were selling to private equity firms; now, as we head into 2015, it appears the trend has only accelerated. According to initial data from our upcoming U.S. Venture Industry Report, 2014 saw the most VC exits via PE buyouts of the past 10 years.
Facing difficult dealmaking conditions due to rising valuations, PE firms seem to be refocusing activity in the lower and core middle market, where VC-backed companies oft reside; and VC investors are happy to exit for a price that's substantial enough for them while being comparatively cheaper for the buyers by PE standards. Of course, a few are more expensive: pricier companies that switched hands recently include Change Healthcare, which was formerly backed by firms including Sandbox Industries and Noro-Moseley Partners, and acquired by Blackstone and Hellman & Friedman for $185 million; and Idera, a company backed by VCs including Greylock Partners and Austin Ventures, that was sold to TA Associates through an estimated $500 million LBO.
To see which firms and companies have been involved in this VC-PE exchange over the last several years, click here.