Latest Report on the Sorry State of VC-Backed Tech M&A

If you thought September was a slow month for big acquisitions of venture-backed technology companies, you’ll be displeased to find that October looks even worse.

For the third month in a row, big acquisitions of venture-backed technology companies have slowed to a crawl. The biggest deal with a disclosed price was for just $63 million.  And while it’s likely there was a bigger deal with an undisclosed price (Microsoft’s purchase of cloud storage provider StorSimple comes to mind), October still provided minimal cause for VC bragging.

The biggest deal with a disclosed price was from Brooks Automation, a provider of automation, vacuum and instrumentation technologies and services, which bought Crossing Automation, a provider of semiconductor automation products, for $63 million in cash. Fremont, Calif.-based Crossing, founded in 2003, was backed by Tallwood Venture Capital and had previously raised $13 million.

The next-biggest disclosed deal was custom printer CafePress’s purchase of EZ Prints, a Norcross, Georgia-based provider of personalized products, for $40 million. EZ had raised $17.5 million between 1999 and 2006 from investors including Novitas Capital, General Catalyst Partners and Safeguard Scientifics.

After that comes lab software provider Accelrys’ $30 million purchase of Aegis Analytical, which provides manufacturing informatics software. Lafayette, Colo.-based Aegis had raised $38 million between 1999 and 2006 from investors including 3i, Merck Capital Ventures, Sandlot Capital and Skyland Capital. In the number four spot comes backup provider Carbonite’s $14.75 million purchase of Zmanda, a developer of open source backup and recovery software.  Sunnyvale, Calif-based Zmanda had raised $16 million between 2006 and 2010 from backers including BlueRun Ventures and Canaan Partners.

Judging by October’s list of acquiring companies, it’s more than likely the biggest deal of the month was actually not for a disclosed price. A top contender for that title is StorSimple, a provider of integrated cloud storage, which had raised $25 million over the past three years from Ignition Partners, Index Ventures, Mayfield Fund and Redpoint Ventures, before it sold to Microsoft.

Other October purchases by large companies for undisclosed sums include:

  • Yahoo bought Stamped, a provider of a social media platform for recommendations
  • Twitter bought Cabana, developer of a tool for building iPhone apps.
  • Google’s Motorola Mobility division bought Viewdle, a maker of facial recognition technology.
  • Cisco bought virtualized networking startup  vCider.

The  slow dealmaking pace is little changed from the prior month. In September, there was not a single newly announced venture-backed technology deal with a disclosed purchase price above $100 million, according to Thomson Reuters data. The biggest disclosed acquisition was Roomba-maker iRobot’s $74 million purchase of venture-backed rival Evolution Robotics.

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