Deals

The 10 biggest VC-backed acquisitions of 2012

ss-exits While 2012 saw some spectacularly large IPOs like Facebook and Workday, it also had its share of major mergers and acquisitions.

In the tech sector, the acquisitions of Instagram, Yammer, and Nicira Networks were especially big news. Companies also made buys in the health and science sectors worth many millions of dollars.

We’ve compiled a list of the top 10 VC-backed mergers and acquisitions from National Venture Capital Association. The data ranks each of the acquisitions by value and the amount of debt each company takes on in the deal. Here’s the list, with many deals you’ll likely remember well from the year:

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1. Boston Biomedical: $2.63 billion

Boston Biomedical may not be a well-known company, but its price tag is certainly something you’ll want to know about. In the biggest acquisition of the year, Japan’s Dainippon Sumitomo purchased BB in February in a deal worth $2.63 billion. BB focuses on cancer drugs, and it boasts that two of its drugs are “likely to become the first anticancer drugs in the world targeting cancer stem cells.” If the medications are commercially successful by 2015, BB investors will receive the full $2.63 billion payout.

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2. Cameron Health: $1.35 billion

In June, Boston Scientific closed its $1.35 billion acquisition of Cameron Health, a large private health company that offers the “world’s first and only commercially available completely subcutaneous implantable cardioverter defibrillator.” In simple terms, Cameron Health’s defibrillators are a major tech breakthrough: Doctors can implant them just beneath the skin without impacting the heart and blood vessels. This is a major breakthrough for anyone who is at risk for a heart attack.

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3. Nicira Networks: $1.26 billion

Nicira Networks’ $1.26 billion acquisition by VMware in July was a big shocker. That kind of a price tag isn’t usual for a company that just came out of stealth mode in the same year. But VMware believes Nirica’s forward-thinking “software-defined networking” will come in handy as more companies invest in cloud networking.

“By combining Nicira’s technology with VMware’s market-leading server virtualization and cloud products, VMware today creates a clear path to becoming the most important infrastructure company across servers, networks, and storage for the next 10 years,” major investor Ben Horowitz wrote when the two companies announced this deal.

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4. Yammer: $1.2 billion

Another major acquisition that opened eyes throughout the tech world was Microsoft’s $1.2 billion buy of enterprise social network Yammer. The deal signaled to many that Microsoft’s collaboration software, SharePoint, had largely failed. Yammer, which claims that employees from more than 85 percent of the Fortune 500 companies use it, gives Microsoft a second chance at this key market.

Yammer might have been a bit pricey, but it’s clearly a smart buy for Microsoft, which wants to remain one of the influential providers of enterprise software. Even with the purchase, Yammer continues to make steady improvements, and its new owner isn’t slowing it down.

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5. Avila Therapeutics: $925 million

Celgene purchased Avila Therapeutics in a buyout worth $925 million in January. Avila specializes in covalent drugs, and some of its most promising drugs treat cancer, viral infections, and autoimmune diseases. Avila investors were paid $350 million upfront and will receive up to $575 million based on its drugs hitting certain milestones.

Check out deals 6-10 on the next page.

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6. Kiva Systems: $775 million

Amazon’s $775 million purchase of Kiva Systems in March seemed like an incredibly natural fit. Kiva’s smart robots and automation technology have helped make Amazon’s warehouses efficient for several years, so it only made sense for Amazon to snap it up. The move makes it possible for Amazon to lower the amount of human workers it needs in its fulfillment centers and further increase its efficiency of shipping products purchased online.

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7. EUSA Pharma: $730 million

Jazz Pharmaceuticals closed its deal to buy EUSA Pharma in June for $680 million in cash, plus an extra $50 million based on hitting milestones. Jazz was most interested in picking up EUSA Pharma for its biggest product, Erwinaze, which can greatly help patients with acute lymphoblastic leukemia. Yet another sign that life-saving drugs are attracting serious investments.

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8. Instagram: $715 million

While Facebook bought photo-sharing sensation Instagram for a widely reported “$1 billion dollars,” the final amount when the deal closed ended up being $715 million because the deal was based on Facebook’s up-and-down stock price. That’s still quite a bit of cash for a company that has more than 100 million users but basically no monetization. We’re seeing indications that advertising in Instagram will come soon so Facebook can finally start making cash off its investment.

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9. Merchant e-Solutions: $670 million

Cielo, Brazil’s largest card-payment processor, agreed to buy Merchant e-Solutions back in July. Merchant e-Solutions processes all kinds of online and mobile payments, amounting to more than $14 billion a year. Merchant e-Solutions has a wide variety of applications to help merchants sell their goods online.

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10. Buddy Media: $612 million

Cloud software powerhouse Salesforce closed its purchase of social media marketing service Buddy Media back in August. Salesforce paid about $475 million in cash and 1.4 million newly issued shares of common stock for the New York City-based company. Combined with Salesforce’s purchase of Radian6 in 2011, the Buddy Media buy further shows Salesforce’s commitment to helping the enterprise own social.

Photos: Exit sign via beboy/Shutterstock, Science research via wongwean/Shutterstock, Glowing heart via CLIPAREA/Shutterstock, Cloud computing via winui/Shutterstock, Yammer, Science research via Shutterstock, Kiva Systems via ForaTV/YouTube, Instagram/Facebook photo illustration via VentureBeat, Clinician in laboratory via Pressmaster/Shutterstock, Credit card and keyboard via Sura Nualpradid/Shutterstock, Marc Benioff via VentureBeat