Random Ramblings
Today’s Term Sheet was supposed to be written from a coffee shop near Boston’s federal courthouse, where The Carlyle Group was scheduled to argue against class certification in the $36 billion private equity conspiracy lawsuit. But it isn’t happening, as Carlyle instead agreed on Friday afternoon to settle the case by paying out $115 million in cash (without admitting any wrongdoing, natch).
This will bring the entire case to an end nearly seven years after it was first filed, as all of the other original defendants either had been let out of the case by a judge, or had previously agreed to their own settlements.
In total, the plaintiffs received just under $600 million from seven firms: Carlyle, Bain Capital, The Blackstone Group , Goldman Sachs, Kohlberg Kravis Roberts & Co. , Silver Lake and TPG Capital. And when I say "plaintiffs received," I obviously mean: "Plaintiffs received, minus massive attorney fees."
Similarly, the private equity firms are said to have spent more than $100 million (in aggregate) on their defense.
The plaintiffs had argued that Carlyle and its co-defendants had conspired to not bid against each other on eight large take-private buyouts that occurred prior to the financial crisis. They had been requesting “class” certification (thus making the case a class action), with a hearing on the matter scheduled for today. Had the plaintiffs been certified and Carlyle proceeded to trial, it could have been on the hook for a whopping $36 billion.
Carlyle had been holding out largely because its co-founders — David Rubenstein, Dan D’Aniello and William Conway — were said to be personally offended by the notion that they had been involved in an illegal act, and who felt that any settlement would be a tacit admission of wrongdoing. No word yet on why they relented. Perhaps I convinced them that, in this case, capitulation is the better part of valor.
A Carlyle spokesman declined comment.
• Thinking aloud: A lot of biz talk around this celebrity phone hack has centered on what it means for Apple, and cloud services in general. All fair, but I also think there could be some regulatory implications for bitcoin. According to various reports, at least one of the original hackers requested donations via Bitcoin, while at least one other man offered up additional photos in exchange for bitcoin. In short: The crypto-currency became a major component of the very type of illicit activity that its evangelists have been trying to downplay. It's the sort of thing that could bring added regulatory skepticism, at the very time that bitcoin seemed to be gaining more and more acceptance...
• He's outta there: Desmong Hague is out as CEO of Centerplate, the stadium catering company owned by Olympus Partners, after video emerged of him repeatedly kicking a cowering puppy. It is being formally termed as resignation rather than a firing, although Hague did not sound like a man planning to resign in an exclusive comment last Thursday to Fortune:
“Clearly the recent situation is something that I am deeply ashamed of and something that I will atone for many years to come. I believe the steps I have taken and the sanctions imposed by the board in the long run will actually see many more animals safe and better protected… I look forward to rehabilitating and moving forward.”
No word yet on if those board sanctions – which included a $100,000 donation from Hague to an animal charity – will still be fulfilled. My colleague Daniel Roberts has more here.
THE BIG DEAL
• Thoma Bravo has agreed to acquire tech performance company Compuware Corp. (Nasdaq: CPWR) for approximately $2.5 billion, or $10.92 per share (17% premium over Friday's closing price). Compuware formally launched its sale process last year after pressure from activist investor Elliott Management (which had offered to buy the company for around $2.4 billion). Compuware has a current market cap of around $2.1 billion. Read more.
VENTURE CAPITAL DEALS
• DXY (a.k.a. Ting Ting Group), a Chinese online healthcare services community, has raised $70 million in growth equity funding from Tencent. Read more.
• FreeCharge, an India-based provider of online prepaid mobile recharge services., has raised $33 million in Series B funding. Backers include Sofina, RuNet and Sequoia Capital. www.freecharge.in
• MindMixer, a Kansas City-based provider of a community engagement platform for helping governments and residents work together better, has raised $17 million in Series C funding. Dundee Venture Capital led the round, and was joined by the Govtech Fund. www.mindmixer.com
• GC-Rise Pharmaceutical Co., a Beijing-based pharma startup focused on women and children's healthcare, has raised $15 million in Series B funding led by OrbiMed. www.gc-rise.com
• Whill Inc., maker of an “omnidirectional four-wheel-drive mobility device,” has raised $11 million in Series A funding, according to Dow Jones. Backers include Innovation Network Corp., 500 Startups, Jochu Technology Co., NTT DoCoMo and Scott McNealy. www.whill.jp
• OncoPep Inc., a Boston-based developer of cancer vaccines, has raised $6.9 million in Series B funding. Backers include The Leukemia & Lymphoma Society. www.oncopep.com
• Measurabl, a San Diego-based provider of SaaS solutions for sustainability reporting, has raised $2 million in seed funding led by CrossCut Ventures. www.measurabl.com
PRIVATE EQUITY DEALS
• 3i Group is prepping a bid for UK-based media information provider Gorkana Group, according to The Sunday Telegraph. Gorkana currently is owned by Exponent Private Equity, and could be valued at around £200 million. Read more.
• Accella Performance Materials Inc., a Mayland Heights, Mo.-based portfolio company of Arsenal Capital Partners, has acquired Zeus Tyrefill Systems GmbH, a German maker of tire-fill systems and flat-proofing solutions for heavy duty industrial and “off the road” vehicles. No financial terms were disclosed. www.dashmulticorp.com
• Aurora Brands, the Aurora, N.Y.-based owner of luxury home and lifestyle brands MacKenzie-Childs and Jay Strongwater, has raised an undisclosed amount of private equity funding from Castanea Partners. www.castaneapartners.com
• The Blackstone Group, Blue Water Energy and GIC have partnered to invest up to $500 million into Siccar Point Energy Ltd., a new exploration, development and production company focused on the North Sea. The company is led by Jonathan Roger, former managing director of Centrica Energy Upstream. www.blackstone.com
• Behrman Capital has acquired BECO Holding Co., a Charlotte-based B2B wholesale distributor of first-response fire protection equipment and related parts, from Freeman Spogli & Co. No financial terms were disclosed. Behrman previously held a majority stake in BECO from 1998 to 2010, before selling it to Freeman Spogli. www.behrmancap.com
• Bridgepoint has acquired Moneycorp, a UK-based provider of foreign exchange services, from SOF Investments at an enterprise value of £212 million. www.moneycorp.com
• Complete Innovations, a Toronto-based provider of fleet telematics and mobile workforce solutions, has raised an undisclosed amount of private equity funding from Madison Dearborn Partners. Some of the proceeds will be used to provide liquidity to existing CI shareholders, including Symmetric Capital. www.fleetcomplete.com
• FountainVest Partners has acquired a control stake in Key Safety Systems, a Sterling Heights, Mich.-based auto parts supplier, from Crestview Partners. www.keysafetyinc.com
• Get, a Norwegian cable operator owned by Goldman Sachs and Quadrangle Group, is expected to receive binding acquisition offers from BC Partners, EQT Partners and TDC AS, according to Reuters. The bids would value Get at around €1.4 billion. Read more.
• Hellman & Friedman has completed its previously-announced agreement to acquire ABRA Auto Body & Glass, a Brooklyn Park, Minn.–based provider of damaged vehicle repair services, from Palladium Equity Partners. ABRA senior management also participated on the buy-side. No financial terms were disclosed. www.abraauto.com
• Kloeckner Pentaplast, a German plastic packaging company owned by Strategic Value Partners, is being circled by private equity firms Apollo Global Management, Ares Management and Platinum Equity, according to Bloomberg. A sale could be worth upwards of $2 billion. Read more.
• Norwegian Cruise Line Holdings (Nasdaq: NCLH) has agreed to acquire rival Prestige Cruises International Inc. for approximately $3.03 billion. Prestige owner Apollo Global Management holds around a 20% stake in NCL. Read more.
• Omnitracs LLC, a San Diego-based fleet management company owned by Vista Equity Partners, has agreed to acquire XRS Corp. (Nasdaq: XRSC), an Eden Prairie, Minn.–based provider of mobile fleet optimization software, for $178 million in equity ($5.60 per share, which represents an 85.4% premium over last Friday’s closing price). www.xata.com
• The Riverside Co. has acquired Tate’s Bake Shop Inc., a Southampton, N.Y.-based provider of crispy cookies and baked goods. www.tatesbakeshop.com
IPOs
• Affimed Therapeutics, a German developer of cancer immunotherapies, has set its IPO terms to 6.25 million shares being offered at between $11 and $13 per share. It plans to trade on the Nasdaq under ticker symbol AFMD, with Jefferies, Leerink Partners and BMO Capital Markets serving as lead underwriters. Shareholders include OrbiMed Advisors, Aeris Capital, Novo Nordisk, BioMedInvest and Life Sciences Partners. www.affimed.com
• Enovation Controls Inc., a Tulsa, Okla.-based provider of digital control systems for gaseous fuel engines and engine-driven equipment, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol ENOV, with Morgan Stanley and UBS serving as lead underwriters. The company reports a $24 million net loss on $142 million in revenue for the first half of 2014. www.enovationcontrols.com
• USD Partners LP, a Houston, Texas-based acquirer and operator of energy-related rail terminals and other midstream infrastructure, has filed for a $150 million IPO. It plans to trade on the NYSE under ticker symbol USDP, with Citigroup listed as left lead underwriter. The master limited partnership was formed by US Development Group LLC. www.us-dev.com
EXITS
• Blackbaud Inc. (Nasdaq: BLKB) has agreed to acquire MicroEdge LLC, a New York–based provider of mission-critical software solutions for the philanthropic giving community, from Vista Equity Partners and Bregal Sagemount. The deal is valued at approximately $160 million, and is expected to close in Q4. www.microedge.com
• Cap-Con Automotive Technologies Ltd., a portfolio company of The Jordan Co., has agreed to sell its Casco unit to Amphenol Corp. (NYSE: APH) for approximately $450 million. The deal is expected to close by year-end. Casco is a Bridgeport, Conn.-based maker of power, connectivity and sensor solutions for the auto industry. Harris Williams & Co. managed the process. www.casco-cpcn.com
• Expera Specialty Solutions LLC, a Wisconsin-based manufacturer of specialty paper products, has completed a $270 million recapitalization. Most of the proceeds were used to refinance outstanding debt, while $35 million was used for a cash dividend to shareholders like KPS Capital Partners. www.experaspecialty.com
OTHER DEALS
• Dollar General (NYSE: DG) has increased its all-cash offer for Family Dollar (NYSE: FDO) to $80 per share, from $78.50 per share (and well above the $74.50 cash and stock bid from Dollar Tree). Read more.
FIRMS & FUNDS
• BV Investment Partners has closed its eighth fund with $487 million in capital commitments. The Boston-based private equity firm focuses on lower middle-market opportunities in the information, business services and communications sectors. www.bvlp.com
• Chiesi Group, an Italian pharmaceutical company, has formed a venture capital fund in collaboration with VC firm A.M. Pappas & Associates. Chiesi Ventures will have offices in Boston, Research Triangle Park and Parma, Italy. www.chiesi.com
• DN Capital has closed its third venture capital fund with $200 million in capital commitments, which is around triple the size of the UK-based firm’s second fund. www.dncapital.com
• Fifth Street Management has closed its second senior loan fund with $305 million in commitments. www.fifthstreetfinance.com
• Glennmont Partners, a European private equity firm focused on clean energy infrastructure, has closed its second fund with €500 million in capital commitments. www.glennmont.com Sequoia Capital is raising its fifth China-focused venture capital fund, according to a regulatory filing. www.sequoiacap.com
MOVING IN, UP, ON & OUT
• .406 Ventures has promoted Graham Brooks to partner. He joined the firm in 2007 and currently sits on the boards of portfolio companies Attend.com, Connotate and CoPatient. www.406ventures.com
•Eric Cantor has agreed to join Moelis & Co. as vice chairman and managing director. He also will serve on the investment bank’s board of directors. Cantor (R-VA) is the former U.S. House Majority Leader, who was defeated earlier this year in a GOP primary by Tea Party challenger David Brat. Read more.
• Lindsay Sharma has joined Industry Ventures as a vice president, with a focus on secondary investments. She previously was with Intuit as a principal in the company’s corporate strategy and development group. www.industryventures.com
• State Street Corp. (NYSE: STT) has named Bob Keogh as Hong Kong-based head of alternative investment solutions for the Asia-Pacific region. He previously was a senior managing director for State Street’s hedge fund servicing business based in Europe, having joined the firm in 2012 from Goldman Sachs. www.statestreet.com
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