Completing the technology transfer process: M&As of science-based IPOs

• Published in: Small business economics Vol. 40; no. 2; pp. 227 - 248
• Main Authors: Meoli, Michele, Paleari, Stefano, Vismara, Silvio
• Format: Journal Article
• Language: English
• Published: Boston Springer 01-02-2013; Springer US; Springer Nature B.V
• Subjects: Acquisitions & mergers; Biotechnology; Biotechnology industry; Business and Management; Business structures; Colleges & universities; Corporate affiliates; Economic theory; Entrepreneurs; Entrepreneurship; Industrial Organization; Initial public offerings; Innovations; International; Investments; Investors; Management; Microeconomics; New stock market listings; Product testing; Research centers; Science; Small & medium sized enterprises-SME; Start up firms; Studies; Technological innovation; Technology transfer; Universities; Valuation; United States > US; Academic entrepreneurship; L26; Technology transfer; M&As; IPOs; G34; University-firm relations; M13; O32
• ISSN: 0921-898X; 1573-0913
• DOI: 10.1007/s11187-012-9416-1

This paper investigates the valuation and merger and acquisition (M&A) dynamics of the population of 254 biotech firms that went public in Europe between 1990 and 2009. Among these, we identify a high proportion (40%) of firms affiliated with a university or another public research organization. After controlling for intellectual capital and other possible determinants, we find that affiliation with a university is recognized as beneficial by investors. This affiliation enhances the valuation of the firms and the probability of being targeted in subsequent M&As, particularly in cross-border deals. We conclude that following the initial public offering acquisitions by incumbent firms are mechanisms to finalize the technology transfer process started in a research institute. Our findings allow us to derive implications for venture investors, academic entrepreneurs, university managers, and policymakers.