Monday, November 29, 2010

VCs score big in EMC-Isilon deal

November 29, 2010 – Whenever there’s a blockbuster acquisition such as EMC’s $2.25 billion buyout of Isilon, it’s interesting to speculate about what the marriage will mean to customers and competitors. But one angle I never look into is what the acquisition means to the venture capitalists (VCs) behind the acquired company.

According to a blog post on The Wall Street Journal’s, the VCs behind Isilon made out quite well (see “EMC-Isilon Deal Is Another Data-Storage Win for VCs”).

According to that article: Atlas Ventures and Madrona Group, which provided Isilon with its Series A funding in 2001, as well as Sequoia Capital, which led the company’s Series B funding, all held significant stakes in Isilon.

Atlas said it will reap $473 million from the EMC-Isilon acquisition, or 20X its initial investment.

Madrona will get more than 15X the $15 million it invested, or $225 million+, according to a Madrona representative.

Sequoia Capital (which apparently did not sell any of its holdings prior to the acquisition announcement), will score $394.4 million.

Isilon was founded almost 10 years ago by Sujal Patel. The company went public in late 2006 at $13 a share. Going public was rocky in the beginning, with shares falling about 50% in the first year. Isilon’s stock price kept sliding through 2008 and 2009, when investors such as Atlas and Madrona added to their holdings.

Under the terms of the agreement announced a couple weeks ago, EMC will pay $33.85 per Isilon share.

Read the full blog post at “EMC-Isilon Deal Is Another Data-Storage Win for VCs”

1 comment:

Carlo said...

Hi Dave,
You are right, this marriage looks undoubtedly like a very good deal for the original VCs. But I think that EMC stakeholders (even more than Atlas' and Madrona's) are the real winners in this rush. People at Hopkinton have now the missing element to counterattack Netapp excellent results in 2010 and its regular growth in NAS market. Nobody can really predict what will happen and how the market will adapt to this new scenario. Let's see what happens!