Mar 17, 2005

Utah venture deals jump

Utah venture deals jump Increase in transactions is seen as a sign of state's economic rebound By Glen Warchol The Salt Lake Tribune A sharp jump in venture capital deals in 2004 indicates Utah's economy is rebounding, according to a report issued Thursday. Utah Deal Flow Report 2004, a comprehensive publication of financial transactions issued annually by the MountainWest Capital Network, showed a 38 percent overall upswing in investment transactions over 2003. The total number of venture capital deals increased 60 percent, and the amount of money involved rose 75 percent. "The numbers clearly indicate that Utah's economy is on the rebound," said Deal Flow report chairman Scott Young. "If venture capitalists are going to make a bet on a company, they are only going to make that bet if they think they are going to get a return on their money," Young explained. "When these companies get more money, that creates more jobs, that puts more money in people's pockets - which spurs the economy." The Deal Flow report showed a 46 percent increase in the total number of mergers and acquisitions in 2004, with the total value of those transactions increasing 60 percent compared to the previous year. In 2003, 26 acquisitions worth $665 million were transacted. The number jumped last year to 38, which were valued at more than $1 billion. Various other financing deals in 2004, such as subordinated debt transactions, jumped 35 percent over 2003, adding up to a 211 percent increase in dollar value. The report also described five Utah public offerings that were completed during 2004, raising a total of more than $778 million. Advertisement Click to learn more... The investment network issued "Deal of the Year" awards in three categories: * Venture capital - Linux Networx for a $40 million deal with Oak Investment, Tudor Ventures and Wasatch Venture Fund; * Public offerings - Extra Space Storage Inc. for its $290 million IPO; and * Acquisition - Headwaters Inc. for its purchase of Eldorado Stone. After nine years of issuing the annual reports as MountainWest Venture Group, the organization of venture capitalists, entrepreneurs and bankers changed its name this week to MountainWest Capital Network. glenwarchol@sltrib.com Investment uptick Highlights from the 2004 Utah Deal Flow Report: l 5 public offerings, total value $778 million. l 85 venture capital deals, total value $399 million. l 38 merger and acquisition transac- tions, total value $1.1 billion. l 151 deals in all, total value $3.9 billion.