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Bumper quarter for mergers & acquisitions

Last updated: 05:59 02 Oct 2015 AEST, First published: 03:59 02 Oct 2015 AEST

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A number of private deals have headed off potential IPOs recently

The third quarter was the busiest of the year for venture capital-backed mergers & acquisitions (M&A), according to information provider Thomson Reuters.

There were 90 deals reported in the third quarter, of which 20 were worth an aggregate US$5.1bn.

The three month period saw private equity groups bring 13 companies to the market, raising US$1.7bn in fresh capital. The number of flotations, or initial public offerings (IPOs) was down 55% on the second quarter total while the amount raised was down by a similar percentage.

"While the number of companies making a public offering during the third quarter was down as a result of market volatility, M&A activity was robust, marking the strongest quarter by disclosed deal value this year," said Bobby Franklin, president and chief executive officer of the National Venture Capital Association, which conducted the poll in conjunction with Thomson Reuters.

"Of the thirteen companies that did make an IPO, more than two-thirds are currently trading above their offering price in the middle of a choppy market, a strong indicator of the quality of venture-backed IPOs," Franklin added.

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