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 Partners, Glynn Capital Management, Greylock Partners, Lumia Capital, On Demand Venture Fund, Mohr Davidow Ventures, Northgate Capital, Sequoia 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 Partners, Latterell Venture Partners, Portola Ventures, Shire 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.