PRINT THIS PAGE US venture-backed M&A activity continues to improve in Q2 0410/08/2004. Source: AltAssets. 
 US venture-backed merger and acquisition activity rose for the fifth consecutive quarter to 86 companies acquired in the second quarter of 2004, according to Thomson Venture Economics and the National Venture Capital Association. The average valuation on disclosed deals also improved to $94m, up from $88.6m in the previous quarter.
'We continue to keep our eye on the valuations for these acquisitions as that, along with IPO activity, is what drives venture capital returns,' said Mark Heesen, president of the National Venture Capital Association. 'The fact that the average value of a deal in the first half of 2004 is almost 50 per cent higher than all of 2003, is a positive trend that suggests that we are moving towards healthier exits.'
The first half also saw a significant shift in the ratio of transaction values to the amount of venture capital invested in target companies. Approximately 36 per cent of target companies attracted transaction values greater than four times their total venture investment, compared to the first half of 2003 when the proportion of deals in this return range was only 14 per cent. Additionally, over the same period in 2003, 37 per cent of targets attracted values lower than the total amount invested in them. In 2004, these deals h dropped to 32 per cent.
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