Three New England technology companies in recent weeks have announced they were going private or being bought out.

Chelmsford-based Kronos, a work-force management software firm, is being acquired by private equity firm Hellman & Friedman for approximately $1.8 billion. Boston-based Keane, an integrated IT services company, said it would be purchased by Caritor for $854 million. And Vertrue, an integrated marketing services company in Norwalk, Conn., announced that it would be acquired by its management and an investor group that includes One Equity Partners, Oak Investment Partners and Rho Ventures in a transaction valued at about $800 million.

These transactions are validation of what we at Covington have believed for a long time: The costs of being public can far outweigh many of the benefits. It has been well documented that the Sarbanes-Oxley Act of 2002 (SOX) has become an added burden for public companies big and small. Companies have recently closed the books on two years of SOX controls and are evaluating the increased costs that the act has imposed upon them. When SOX and other costs are added, it is not uncommon for public companies to spend between $1 million and $2 million annually for the privilege of being public. These costs, the lack of research coverage and institutional-shareholder following, and the tyranny of quarterly reporting often start the debate on whether being a public company is worth it.

According to Thomson Financial, from 2005 to 2006 the dollar volume of going-privates nationwide quadrupled and the number of these transactions nearly doubled. For the New England economy, the recent going-private transactions can present many positive results, in particular allowing a company to remain independent and maintain its employee base within the state. Furthermore, such companies often have access to the resources of private equity firms, which provide the needed capital to grow and expand while eliminating public-company expenses and distractions.

At the same time that Kronos, Keane and Vertrue are going private, companies such as Netezza are announcing IPOs. The tech IPO market, which until recently had been dormant, seems to be building momentum. Last week, Netezza, a provider of enterprise-class data warehouse appliances, filed for a $100 million IPO. The company, which plans to trade on the Nasdaq, was founded in 2000 and was backed by VC firms.

Tech IPOs seem to be very sector-specific. While we see tech IPOs certainly making a comeback, it is not a broad-based trend. Netezza is an example of a company that happens to be in a hot sector of the tech market right now. Tech companies that have chosen the alternate route -- the going-private transaction -- may be in sectors that are not attractively valued in the public markets.

Interestingly, the current capital markets are supportive of both going-private transactions and IPOs on a case-by-case basis. Private equity firms are flush with capital, and senior and subordinated debt continues to be available at reasonable terms to finance going-private transactions. In addition, the public equity markets have all but ignored a whole class of high-quality small-cap companies that are consequently undervalued and prime for a buyout.

As far as the IPO market goes, the dust from the dot-com bust has settled and memories of massive failures are fading. Tech companies with growth and promise are prime candidates for IPOs. Where there is potential for growth, there is opportunity -- and going-privates and IPOs, depending on the circumstances, both are here to stay in New England.