IT IPOs Soared In 2007IT IPOs Soared In 2007

SAN JOSE, Calif. -- It was a mixed bag for initial public offerings (IPOs) and mergers in 2007.

Simply put, IPOs were up and acquisitions were down.

Some 31 IPOs totaling $3 billion in proceeds worldwide were disclosed in the fourth quarter of 2007, according to Thomson Financial and the National Venture Capital Association (NVCA).

This is the highest quarterly number of IPOs since the third quarter of 2000. For the year, 86 venture-backed companies went public for $10.3 billion, a 51 percent increase when 57 companies went public for $5.1 billion in 2006, according to the report.

The information technology (IT) sector saw the majority of venture-backed companies go IPO. Some 17 IPOs raised $1.5 billion during the fourth quarter, according to the firms. This represents an increase from the previous quarter when there were nine issues in the IT sector accounting for $684.5 million in proceeds, they said.

In 2007, the IT sector accounted for the most venture-backed IPOs, totaling 47 issues and $6.0 billion in volume, according to the report.

In contrast, the venture-backed M&A market had only 45 deals in the fourth quarter, 22 of which had a combined disclosed value totaling $5.0 billion, according to the firms.

This is the lowest number of total M&A exits since the first quarter of 1998, when there were 44 M&A exits. For the year, there were 304 venture-backed M&A transactions with a total disclosed value of $23.7 billion, the highest disclosed values since 2000, according to the firms.

In Q4, the non-tech sector dominated the venture-backed M&A landscape, with 5 deals and a disclosed total dollar value of approximately $2.2 billion, according to the firms.

In Q4, IT industries saw the next highest disclosed dollar volume at $2.0 billion. For 2007, IT targets dominated the M&A scene accounting for $13.6 billion in deals.

"This past year was marked by improving quality of both venture-backed IPO's and M&A transactions," said Mark Heesen, president of the NVCA, in a statement. "In the coming year, we would like to uphold that quality while increasing quantity on both exit fronts. An ideal year would see more than one hundred venture- backed IPO's and 350 or more acquisitions. But we don't want to sacrifice quality to hit that threshold."