M&A Is Heating up; Here Are the Top 10 VC-Backed M&A Deals for Q3 (slideshow)

The IPO market has been shrouded in darkness since August, but venture capitalists have found a ray of light in mergers and acquisitions.

One hundred and thirteen VC-backed companies were acquired in the the third quarter, including 38 that had disclosed valuations worth a combined $6.49 billion, according to Thomson Reuters (publisher of peHUB). That’s the largest aggregate amount for VC-backed M&A since the fourth quarter of 2009, Thomson Reuters reports.

While the number of deals per quarter is staying steady at about 110, the size of deals has shot up dramatically this year. For the first nine months of this year, there were 125 VC-backed acquisitions with disclosed valuations totaling $12.4 billion. That’s up from 85 VC-backed acquisitions with disclosed valuations totaling $6.1 billion in the first nine months of 2010, according to Thomson Reuters.

Of the deals with disclosed values in Q3, 15 were valued at $100 million or more, and one deal came in at $1 billion.

In another bright spot — at least with the top 10 deals for Q3 — VCs didn’t over-invest. On average, venture firms invested about 10% of the sale price for the top 10 deals, according to peHUB’s analysis of Thomson Reuters’ data. In one case, the VCs invested just $1.6 million in a company that sold for $314 million.

Who were the smart VCs on that deal? Watch our slideshow to find out.

(Photo by Kheng Guan Toh/Shutterstock)

[slideshow]

[slide title=”No. 10: DynaTrace Software”]
Deal Value: $256.0M
Target: DynaTrace Software, Inc.
Target Description: Provides application performance diagnostics for business-critical Java and .NET applications.
Acquiror: Compuware Corp.
VC Financing: $22.2M
Backers: Bain Capital Ventures, Bay Partners, undisclosed firm
Date: 07/01/2011

[slide title=”No. 9: Dotomi”]
Deal Value: $257.7M
Target: Dotomi, Inc.
Target Description: Develops a communications platform allowing companies and brands to transmit messages through their customer relations marketing software systems to advertising space on the Internet.
Acquiror: Valueclick Inc.
VC Financing: $25.3M
Backers: Globespan Capital Partners, Investor Growth Capital, U.S. Venture Partners, Velocity Equity Partners, undisclosed firm.
Date: 08/31/2011

[slide title=”No. 8: Apache Design Solutions”]
Deal Value: $314.0M
Target: Apache Design Solutions, Inc.
Target Description: Develops physical design and verification technology and tools that enable nanometer Systems-on-a-Chip markets to accelerate chip design and guarantee silicon for power, timing and signal integrity.
Acquiror: Power Play Merger Sub Inc.
VC Financing: $1.6M
Backers: Intel Capital, Pacific Rim Ventures Co. Ltd., PacRim Venture Management, SmartForest Ventures.
Date: 08/01/2011

[slide title=”No. 7: Amira Pharmaceuticals”]
Deal Value: $325.0M
Target: Amira Pharmaceuticals, Inc.
Target Description: Makes small-molecule pharmaceuticals focused on the discovery and early development of compounds to treat inflammatory disease.
Acquiror: Bristol-Myers Squibb Co.
VC Financing: $35.0M
Backers: Avalon Ventures, Novo A/S, Prospect Venture Partners, Versant Ventures, undisclosed firm.
Date: 09/08/2011

[slide title=”No. 6: Interactive TKO”]
Deal Value: $330.0M
Target: Interactive TKO, Inc.
Target Description: Provides cloud-based software-testing solutions for composite business applications for customers in the banking, telecommunications, insurance, travel, retail, utilities and government markets.
Acquiror: CA Inc.
VC Financing: $25.8M
Backers: CenterPoint Venture Partners, Covera Ventures, Vesbridge Partners
Date: 08/16/2011

[slide title=”No. 5: Clearwell Systems”]
Deal Value: $390.0M
Target: Clearwell Systems, Inc.
Target Description: Provides corporate email intelligence solutions for litigation, investigations, regulatory inquiries, law firms, enterprise, enterprise legal, IT/info security and government.
Acquiror: Symantec Corp.
VC Financing: $29.0M
Backers: DAG Ventures, Redpoint Ventures, Sequoia Capital
Date: 07/11/2011

[slide title=”No. 4: CashEdge”]
Deal Value: $465.0M
Target: CashEdge, Inc.
Target Description: Provides online financial applications for banks, credit unions and wealth management firms.
Acquiror: Fiserv Inc.
VC Financing: $63.0M
Backers: Capital Z Investment Partners, CIBC Wood Gundy Capital, Stone Point Capital, Royal Bnak of Canada Pension Fund, Susquehanna Growth Equity, 3 undisclosed firms
Date: 09/14/2011

[slide title=”No. 3: Salient Surgical”]
Deal Value: $480.0M
Target: Salient Surgical Technologies, Inc.
Target Description: Surgical tool maker that has developed “monopolar” electrosurgical devices used for the treatment of liver cancers.
Acquiror: Medtronic Inc.
VC Financing: $118.2M
Backers: Affinity Capital Management, Brait Private Equity, Crescendo Venture Management, Crown Advisors International, Frantzen/Voelker Investments, Graphite Capital, Medtronic, Merlin Nexus, Synergy Partners, Piper Jaffray Ventures, QuestMark Partners, Rahn Group, RiverVest Venture Partners, Vanguard Ventures, 3 undisclosed firms.
Date: 08/31/2011

[slide title=”No. 2: PopCap Games”]
Deal Value: $800.0M
Target: PopCap Games, Inc.
Target Description: Provides games for Web, PC and Mac, videogame consoles, cellular phones, PDAs, and other mobile devices.
Acquiror: Plumpjack Acquisition Corp.
VC Financing: $22.5M
Backers: Meritech Capital Partners, John McCaw
Date: 08/12/2011

[slide title=”No. 1: Broad Oak Energy”]
Deal Value: $1B
Target: Broad Oak Energy, Inc.
Target Description: Engages in the acquisition of leaseholds, drilling, exploration, development, completion, and production of domestic U.S. oil and natural gas reserves in Texas.
Acquiror: Laredo Petroleum Inc
VC Financing: $158.2M
Backers: Warburg Pincus
Date: 07/06/2011

[/slideshow]