'04 banner year for Utah

More venture capital deals and an increase in mergers and acquisitions marked a banner year in Utah business activity, according to a new report.

The MountainWest Capital Network, formerly known as the MountainWest Venture Group, reported $3.9 billion in public offerings, venture capital deals, mergers and acquisitions and other fundings in 2004 in its Utah Deal Flow report released Thursday. The annual publication of the nonprofit organization, which promotes capital development in Utah, is now in its ninth year.

That $3.9 billion number is up from $2.8 billion in overall business activity in 2003.

Other fundings — which include money raised by "angel" investors, government grants and private placements — topped the four categories at $1.7 billion. The category included two new private equity funds by Sorenson Capital and Peterson Partners, which collectively closed on roughly $355 million.

Venture capital and private equity fundings made up 85 deals valued at $399.4 million, up from 53 deals at $228.6 million in 2003.

Bluffdale-based Linux Networx Inc. topped Utah venture deals in 2004, raising $40 million in series B funding by Oak Investment Partners, Tudor Ventures and Wasatch Venture Fund.

"I just think we've got a lot of great ideas, a lot of great entrepreneurs in this state," said Scott Young, Deal Flow chairman. "Great ideas and sharp people attract money."

The report noted five public offerings with a transaction value of $778.5 million, down from nine deals valued at $1.4 billion in 2003.

Extra Space Storage Inc., a self-storage company based in Salt Lake City, was the only Utah company to hold an initial public offering in 2004. It raised $290 million.

Mergers and acquisitions made up 38 deals valued at $1.1 billion, up from 26 deals valued at $664.9 million in 2003.

Headwaters Inc., a South Jordan-based energy company, led acquisitions with four deals valued collectively at $442.5 million.

Brad Bertoch, president of the Wayne Brown Institute, a Salt Lake-based nonprofit that helps businesses find funding, said 2004 showed a continued increase in Utah venture capital.

"We continue to close a gap in terms of being a leader in the amount of venture capital deployed with other states like Colorado, Washington state and other major areas and communities in the country," Bertoch said. "The number of funds under management is approximately 16 in the state of Utah, up in the last four years from two."

At present, Bertoch added, money under management by Utah VC firms totaled roughly $1.5 billion. Of that amount, money available for deployment was roughly $700 million to $900 million.

---

E-mail: danderton@desnews.com