Data spotlight: OpenDNS purchase leads M&A activity in August

M&A activity rose in August, led by Cisco System’s $635 million acquisition of OpenDNS, a provider of cloud-based network security services to protect multiple devices.

The company had raised about $54 million from Cisco, Evolution Capital PartnersGlynn Capital ManagementGreylock PartnersLumia CapitalOn Demand Venture FundMohr Davidow VenturesNorthgate CapitalSequoia Capital and Sutter Hill Ventures.

The OpenDNS purchase was one of 27 M&A deals of VC-backed, U.S.-based companies completed in August. Nine of the companies disclosed financial details for a combined deal value of nearly $1.46 billion, according to a VCJ analysis of Thomson Reuters data.

The second largest deal was Allergan’s purchase of Naurex Inc for $560 million. Another big deal was Advance/Newhouse Communications Inc’s 500 million acquisition of 1010data Inc.

Year-to-date through the end of August, 214 VC-backed, U.S.-based companies have been purchased, with 45 of them disclosing deal valuations for a combined $10.6 billion.

That’s down in comparison to the same seven-month period in 2014, when 318 VC-backed, U.S.-based companies were purchased with disclosed valuations totaling about $22.2 billion, according to Thomson Reuters data. The 2014 surge, however, was led by the multi-billion-dollar sales of Nest and Oculus VR.

Other notable stats based on a preliminary analysis of the August 2015 M&A data:

  • Naurex raised the most venture funding of any acquired company in the month. The Evanston, Ill.-based company raised about $161 million from a number of firms, including Adams Street PartnersLatterell Venture PartnersPortola VenturesShire Pharmaceuticals and Takeda Ventures, among others.
  • Imperium Renewables, a developer of renewable fuel technologies, also raised a fair amount of venture capital, pulling in $133 million in funding. However, Renewable Energy Group paid only about $38 million to acquire it. Investors include Technology Partners, Nth Power and other firms.
  • Versant Ventures and Intel Capital each sold two portfolio companies in the month.
  • The accompanying table shows that among the acquiring companies in the month, in addition to Cisco and Allergan, were Microsoft, Comcast and FanDuel.
  • California was home to 11 companies acquired, more than any other state. Three companies are based in New York.
  • Biotech accounted for a total of four of the acquired companies.
  • The average purchase price of venture-backed companies acquired in August is $265 million, which is slightly ahead of the yearly average of $235 million.
  • The average age of the companies acquired in August was six-and-a-half years.