M&A activity a positive indicator, despite IPOs being down in Massachusetts software industry

Although the number of software IPOs have been down significantly so far in 2008 (coupled with a major downdraft in the credit markets globally), a very bright spot has been the continued availability for credit for worthy M&A activity. In fact, in April so far, we have IBM purchasing FilesX http://www.filesx.com/news-events/press-release.asp?display=detail&id=56, Nuance picking up eScription for $363M http://www.nuance.com/news/pressreleases/2008/20080408_escription.asp , Game studio Mad Doc picked up by Take-Two interactive’s Rockstar label http://biz.yahoo.com/bw/080404/20080404005671.html?.v=1, and finally mindSHIFT acquiring Collaboration Online http://news.groupspark.com/2008/04/01/mindshift-expands-market-reach-with-the-acquisition-of-collaboration-online-limited-company/.

It’s a trend that has accelerated in recent years — with much more shareholder value being unlocked via acquisition vs. IPO — in fact, we can count on our fingers how many 2006, 2007 and 2008 IPOs are trading above their initial offering price.


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