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3rd quarter exits for VDOs span industry sectors

October 05, 2017
By: Mark Skinner

Seventeen venture development organizations (VDOs) from across the country shared in the success from a baker’s dozen exits posted in Pitchbook during the third quarter of 2017.  Information tech companies lead the pack, but seven come from other sectors of the economy including life sciences, vehicle manufacturing, materials, polymers, robotics, and chemicals – demonstrating the important role VDOs may play in broadening innovation’s contributions to regional economies.

Snapshots of all 13, along with two more late Q2 deals, follow in SSTI’s third article looking at the economic development impacts of nonprofit and publicly-backed VDOs. The first two stories are available here (Q1:17) and here (Q2:17).

Arcimoto (NASDAQ: FUV) raised $19.5 million in its Sept. 21 Reg A+ initial public offering (IPO), mentioned in SSTI’s look at 2nd quarter exits. Based in Eugene, Oregon, the 50-employee, Fun Utility Vehicle manufacturer had been in the portfolio of Oregon BEST, a recent Regional Innovation Systems award winner, prior to the IPO.

A British investment company is acquiring HemoGenyx, a blood disease pharmaceutical company, for $11 million, according to the Buffalo News. Spun out of Cornell University, the startup was a winner of the inaugural business plan competition sponsored by Buffalo-based accelerator/incubator 43North.  43North has a 5 percent stake in the company, according to press reports.

 Riverside Partners led a leveraged buy out (LBO) of Calero Software, based in Rochester, New York. The Advanced Technology Development Center in Atlanta was one of 13 exiting investors from the communications life management software developer. Terms for the deal were not disclosed.

On Aug. 28, Forcepoint acquired Baltimore-based RedOwl Analytics, a security analytics company based in Baltimore, Maryland, for an undisclosed sum.  Sellers with the acquisition included In-Q-Tel, TCP Venture Partners and TEDCO. RedOwl employed 87 people at the time of the purchase. The RedOwl product has been renamed Forcepoint UEBA; the Forcepoint press release stated RedOwl employees were “joining the Forcepoint team as part of the Data and Insider Threat Security business.”

BetaSpring, a Providence-based accelerator and Rhode Island partner in the SSBCI program, is among seven exiting investors following the Aug. 14 acquisition of NuLabel by ALTANA Pharma. Terms were not disclosed for the deal. NuLabel produced a fluid-activated, environmentally-friendly adhesive for application to containers.  Prior to the sale, the East Providence company employed 27 people.

Singapore-based ST Engineering acquired Aethon, manufacturer of autonomous mobile delivery robots, for $36 million on July 17. Founded in 2002, the Pittsburgh-based Aethon employed 87 people at the time of acquisition. Aethon becomes a division of ST Engineering’s U.S. headquarters, VT Systems, and, the acquisition press release stated, “Aethon’s leadership team and employees will remain in place and the company will continue to operate out of its Pittsburgh, PA location.” Sellers in the deal include Innovation Works.

The Texas-based, corporate philanthropy management firm YourCause completed an LBO to acquire Good Done Great, a fundraising platform for charities and companies. The North Charleston, South Carolina, company employed 60 people at the time of the acquisition on Aug. 3.  SCRA Technology Ventures was the sole exiting investor in the deal.

Preferred Sands (NYSE: PSND), a manufacturer of frac sands and proppants, announced an Initial Public Offering on Aug. 10, hoping to raise $100 million.  Based in Radnor, Pennsylvania, the company employs 417 people according to its Pitchbook profile.  Ben Franklin Technology Partners of Northeastern Pennsylvania is listed as partially exiting with completion of the IPO.

Aclaris Therapeutics acquired Confluence Life Sciences for up to $100 million, pending achievement of certain milestones for the developer of kinase inhibitors. The minimum purchase price is $20 million.  St. Louis-based Confluence became an operating subsidiary of Aclaris and had 30 employees at the time of acquisition on Aug. 8. Exiting investors included the Missouri Technology Corp, BioGenerator, and Accelerate St. Louis.

Idaho-based Kochava acquired MobileRQ, on July 17 for an undisclosed amount of money.  The contextual mobile marketing platform company based in Portland, OR, employed 13 people at the time of its acquisition, all of whom became Kochava team members and will maintain their Portland product development office according to the Kochava press release. Exiting investors include the Oregon Angel Fund and nonprofit accelerator TiE Oregon.

On July 13, Cisco announced the intent to acquire St. Louis-based Observable Networks for an undisclosed amount. Arch Grants will be one of the selling investors from the five-year-old firm that employed 51 people at the time of the announcement.  The deal is expected to close in the first quarter of 2018.

Crowdjoy, a geotracking application development firm, was acquired by ISM Connect for an undisclosed amount on July 11.  The sole exiting investor was Ben Franklin Technology Partners of Southeastern Pennsylvania.  ISM Connect is a new company formed from the merger of Customer Mobile and Ingenuity Sun Media.  Both ISM Connect and the former Crowdjoy are based in Doylestown, Pennsylvania.

Cincinnati-based Pilot Chemical Company acquired the Pittsburgh polymer materials company, ATRP Solutions, for an undisclosed sum on July 11. Spun out of Carnegie Mellon University and a past SBIR recipient, ATRP and its 14 employees remain in Pittsburgh as an operating subsidiary of Pilot.  Exiting investors include Innovation Works and the Pittsburgh Life Sciences Greenhouse.

Our account includes two exits from late last quarter:

The 20 employee healthcare platform developer Precipio acquired Transgenomic (NASDAQ: TBIO) in a reverse merger, “resulting in the combined entity trading on the NASDAQ Stock Exchange under the ticker PRPO,” according to its Pitchbook profile.  Previous investors in Precipio include Connecticut Innovations. CI has posted 49 prior successful exits on its website.

Certica Solutions acquired Unbound Concepts, developer of a machine learning algorithm, through an LBO on June 26.  Exiting investors include Accelerate Baltimore and TEDCO. Now an operating subsidiary of Certica, Unbound Concepts employs six people at the Emerging Technology Center in the Highlandtown neighborhood of Baltimore. 

venture dev orgs