The European acquisition market has been particularly buoyant over the last year with many global, mainly US-based, corporates seeking to acquire and exploit technology developed in Europe.

eBay subsidiary, PayPal, announced its first acquisition for over two years on 28/01/2008, buying Fraud Sciences, a company that develops online risk tools, for €115m. eBay will be hoping that the company’s technology will help allay the increasing concerns regarding trust and security on its sites. In the accompanying press release, Scott Thompson, President of PayPal said “Integrating Fraud Sciences’ risk tools with PayPal’s sophisticated fraud management system should allow us to be even more effective in protecting eBay and PayPal's hundreds of millions of customers around the world".

Fraud Sciences was founded in 2001 and is a classic example of an Israeli R&D/US HQ company. Prior to acquisition the company had raised two rounds of funding. In its first round in Q4 2004, the company raised €1.3m from BRM Capital. The company’s second round of funding occurred just four months ago, in October 2007, when BRM were joined by RedPoint Ventures in a €7.8m funding round for late stage development and commercialisation of the company's fraud analytics and transaction verification managed service.

The acquisition of Fraud Sciences follows the announcement three weeks ago that MySQL, the Swedish open-source database developer, was to be acquired by Sun Microsystems for €675m in the largest European venture backed trade sale since Skype was acquired by eBay in 2005. MySQL had received three rounds of venture funding in Q4 2001, Q2 2003 and Q1 2006 respectively, for a total of €32m of disclosed investment. Investors in these rounds included Baderton Capital, Index Ventures, Institutional Venture Partners, Intel Capital, Presidio Venture Partners and SAP Ventures.

In Q3 2007, another software company, Dublin-based Havok.com, was acquired by Intel for €80m. The company develops interactive software and services used by digital media creators in the game and movie industries. It now operates as a wholly owned subsidiary of Intel. Havok span out of Trinity College Dublin in 1998 and raised three rounds of funding before exiting from investors including Trinity Venture Capital, Enterprise Ireland, ICC Venture Capital Managers, Ltg Development Capital and AIB Capital.

Q2 2007 provided the most talked about European IT acquisition of the year, namely CBS’s €206m acquisition of Last.fm. Before being acquired, Last.fm received only €3m of disclosed venture capital investment from investors including Atomico Investments, Index Ventures and a number of high net worth individuals including Reid Hoffman, Chairman and President of LinkedIn and formerly EVP of Business Development at PayPal. In its first major announcement since the acquisition by CBS, this month Last.fm began offering users the ability to select and stream full-length tracks instead of the 30 second preview clips previously available.

These four high profile exits over the past year demonstrate the attractiveness of Europe’s IT software and systems sectors for venture investment, particularly in the geographic clusters of Israel, Sweden, Ireland and the UK. These exits also help cultivate the much talked about spill-over advantages, such as increased business angel activity, increased professionalism of entrepreneurs and a general increased risk tolerance for start-up businesses in the region.

The European IT sector has clearly seen some impressive exits over the last year. It is interesting to note that all four acquired companies outlined above were bought by US-based corporates. This demonstrates the increasingly global outlook of US corporates, mirroring the behaviour of the some of the larger US VC firms, and the eagerness to acquire world-class technology wherever it is created. On the other hand perhaps it highlights a more worrying view that Europe lacks the forward looking, innovation based corporates willing and able to make these types of acquisitions.

Clear2Pay, the Belgium-based provider of payment technology, has raised €10m in an internal round financed by Iris Capital.  The investment will be used for the company’s acquisition strategy, expansion into China and continued R&D.  Clear2Pay provides software to banks and financial institutions for processing electronic payments.

Circassia, the UK-based developer of medicines to control immune system responses, has raised £11m (€14.7m) from Goldman Sachs, Imperial Innovations, Invesco Perpetual and Lansdowne Capital.  Imperial Innovations invested £1.75m (€2.34m) for a 13 per cent stake.  The capital will be used for the development of the company’s cat, ragweed, house dust mite and grass allergy vaccines to cure allergic rhinitis.

Solel Solar Systems, the Israel-based solar power company, has raised $105m (€70.7m) from Ecofin in return for a “very significant minority stake”.  Solel Solar specialises in designing, manufacturing and installing solar fields and critical solar field components for large scale power generation.

More companies' intelligence at www.libraryhouse.net

More companies' intelligence at www.libraryhouse.net

Fraud Sciences, the US- and Israel-based developer of anti-fraud systems, has been acquired by PayPal in a cash transaction with an aggregate transaction value of around $169m (€113.8m).   The acquisition fits into Ebay’s plans to improve trust and safety across its sites and to accelerate the development of next generation fraud detection tools.

Medical Ventures, the Canada-based medical device manufacturer, has made two strategic acquisitions in Israel: B-Balloon, which designs stents and stent delivery systems; and Neovasc, developing a minimally-invasive treatment for Ischemic heart disease.  Both companies were being incubated in the Israel-based Peregrine Ventures.  Medical Ventures states that the acquisitions bring several new vascular therapies into its pipeline.

More companies' intelligence at www.libraryhouse.net

More companies' intelligence at www.libraryhouse.net

Mempile, the Israel-based developer of high-density storage technology, has appointed Mr Moty Mebel as chief executive.  He was previously chief executive at Smart Link, where he continues to chair the executive board.  Mempile has developed an optical storage drive that can store one terabyte of data on a DVD-sized disc.

Denmark-based ilochip, the developer and manufacturer of pathogen detectors, has appointed Casper Braum as chief executive, replacing Jes Østergaard who remains on the company’s executive board.  Mr Braum has held several positions at Lundbeck, Niels Clauson-Kaas and Novo Nordisk, most recently as business development director at Lundbeck.

More companies' intelligence at www.libraryhouse.net

More companies' intelligence at www.libraryhouse.net

UK-based [[Alternative Waste Solutions]], the plastic reprocessing company, has informed Library House that it has raised £2m (€2.7) from Northstar Equity and E-Synergy as part of a £14m (€18.6m) expansion of the company’s Hemswell plant.  Managing director Jonathan Short revealed that AWS is now seeking a further £3m (€4m) to continue this expansion, either as equity or as a convertible loan prior to an IPO on AIM, planned to take place in Q2 2009.  The purpose of the expansion is to begin manufacturing food-grade plastics by Q4 2008.

Tantalum Technologies, the Denmark-based spin-out of Danfoss which is commercialising a novel tantalum vapour deposit technology, has informed Library House that it intends to raise €10m in H1 2010 to build a second factory.  Bo Gillesberg, chief executive of Tantalum Technologies, has said that the company will break even in mid-2009 and will be seeking an exit through trade sale in four to five years time.

Badoo, the UK-based social networking company, has raised RUB 750m (€20.6m) from Finam Investment.  Lucy George, Badoo’s communications director, informed Library House that this investment would be used to launch the company in Russia by the end of Q1 2008.  Badoo offers social networking with photo/video sharing and its service is paid for with SMS text messages, requiring relationships with telephone operators in each of the countries it expands into.  Ms George stated that Badoo operates in 14 countries worldwide and will be available in 20 languages by the end of 2008.

More companies' intelligence at www.libraryhouse.net

More companies' intelligence at www.libraryhouse.net