Some quick notes to kick off your Thursday:
• Deal data: Yesterday we discussed a Goldman Sachs research report about the dearth of large “take-private” buyouts in 2014, accepting the premise but questioning the report’s actual data. Specifically, the notion that there only has been $3 billion of “take-private” activity year-to-date (even if you assume it’s only referring to U.S. activity, which wasn’t made clear). After all, just two deals alone – Thoma Bravo paying $2.5 billion for Compuware and Lone Star Funds paying $1.4 billion for DFC Global – bring us past the $3 billion mark, and that doesn’t even account for a variety of multi-billion dollar public company carveouts (Golden Gate/Red Lobster, etc.) or huge platform acquisitions (Cerberus/Albertsons/Safeway).
Goldman didn’t want to discuss it, so I rang up S&P LDC, which was cited as the original source. They tell me the data was only through the first half of 2014, even though Goldman had referred to it as YTD. Moreover, it agrees that overall LBO volume is on pace with prior years – agreeing that a large part of the private equity’s so-called disappearance is more related to increased overall M&A activity than declining PE activity. You can read more here.
• Concentration: Venture capital fund-of-funds manager TrueBridge Capital Partners yesterday announced that it has closed its third fund with $400 million in capital commitments. An obvious question here is if TrueBridge is expecting lower returns from this fund than from its second one, given that VC buy-in valuations are at near record-highs and macro conditions eventually will worsen (thus possibly affecting exit prices). In other words, does it have a pending vintage-year problem.
TrueBridge co-founder and partner Mel Williams agreed with my overall industry assessment, but expressed confidence that his own fund’s performance won’t suffer. Not because it’s expanding its number of GP relationships (i.e., diversifying), but because it’s cutting them back.
“I’ve got to think that the average returns for the VC industry in this set of vintage funds may not be as attractive as they are for prior vintage years, so one of the things we are doing is concentrating our portfolio,” Williams explains. “We have 18 primary fund relationships in Fund 1, 11 in fund two and will either have that many in this fund or a bit less. At the end of the day, we have to rely on our due diligence to get comfortable with the idea that this small group of managers will do well in any market cycle.”
• Amazing: A number of Term Sheet readers were among the throngs who took yesterday off of work to participate in Boston’s annual Tech Gives Back event. Here are some photos.
• Price point: Today’s big deal is that cybersecurity startup Veracode has raised $40 million in new VC funding led by Wellington Management, in what is being viewed as a pre-IPO round. The company isn’t talking valuation, but word is that the deal was done at a post-money mark just shy of $500 million.
• In memoriam: Please take a moment today to remember the thousands of innocents murdered thirteen years ago. In particular, the private equity community lost Brian Dale of Blue Capital Management, Chris Mello of Alta Communications and David Retik of Alta Communications. Please go here to learn more about the Retik Mello Foundation. May they not be forgotten
THE BIG DEAL
• Veracode, a Burlington, Mass.-based provider of application security services, has raised $40 million in new VC funding. Wellington Management Co. led the round, and was joined by unidentified existing investors. The company previously raised over $70 million in VC funding from Meritech Capital Partners, Atlas Venture, .406 Ventures and StarVest Partners. Read more.
VENTURE CAPITAL DEALS
• Livongo Health, a Palo Alto, Calif.-based consumer health platform founded by ex-AllScripts CEO Glenn Tullman, has raised $10 million in Series A funding from General Catalyst Partners. The company’s first product focuses on diabetes. Read more.
• Conservis Corp., a St. Louis-based provider of cloud-based farm management software solutions, has raised $10 million in Series A funding. Cultivian Sandbox Ventures, led the round, and was joined by Middleland Capital and Heartland Farms. www.conserviscorp.com
• CartoDB, a Spain-based mapping and geospatial platform, has raised $8 million in Series A funding. Earlybird led the round, and was joined by return backers Kibo Ventures and Vitamina K. www.cartodb.com
• Apropose, a Menlo Park, Calif.-based developer of a Web design analytics platform, has raised nearly $1.9 million in seed funding co-led by New Enterprise Associates and Andreessen Horowitz. www.apropose.com
• Doutissima, an online health forum focused on the South American market, has raised an undisclosed amount of seed funding. DFJ Esprit led the round, and was joined by Doutissima. The company also announced a partnership with Telefonica-based accelerator Wayra (an existing Doutissima investor) that will allow it “to leverage operations between the London and São Paulo academies.” www.doutissima.com.br
• eShakti.com, an India-based women’s fashion and custom clothing company, has raised an undisclosed amount of Series B funding. IvyCap Ventures led the round, and was joined by return backer IDG Ventures India. www.eshakti.com
• Tornado Spectral Systems Inc., a Toronto-based provider of optical spectroscopy instruments, has raised an undisclosed amount of new VC funding from BeauVest and Roadmap Capital. www.tornado-spectral.com
PRIVATE EQUITY DEALS
• Big Lake Services LLC, a Midland, Texas-based portfolio company of Rock Hill Capital Group, has merged with Beckman Production Services, a Kalkaska, Mich.–based production and well services company backed by SCF Partners. www.beckmanproduction.com
• ICV Partners has acquired OneTouchPoint Corp., an Oak Brook, Ill.-based provider of document management and related solutions, from Huron Capital Partners. No financial terms were disclosed. www.1touchpoint.com
• CyberArk Software Ltd., an Israeli provider of cyber attack security software, has set its IPO terms to 5.36 million shares being offered at between $13 and $15 per share. . It would have an initial market cap of approximately $414 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol, CYBR, with J.P. Morgan serving as left lead underwriter. It reports an $18,000 net loss on nearly $39 million in revenue for the first half of 2014. Shareholders include Jerusalem Venture Partners (46.6% pre-IPO stake), Goldman Sachs (24.1%), Vertex Venture Capital (11.6%) and Cabaret Security Ltd. (7.7%). www.cyberark.com
• Smart & Final, a Commerce, Calif.-based food and grocery retailer owned by Ares Management, has set its IPO terms to 13.45 million shares being offered at between $12 and $14 per share. It would have an initial market cap of approximately $924 million, were it to price in the middle of its range. The company plans to trade under ticker symbol SFS, with Credit Suisse serving as lead underwriter. It reports $13.6 million of net income on $1.,56 billion in sales for the 24 weeks ending June 15, 2014, compared to $5.1 million of net income on $1.45 billion in revenue for the year-earlier period. www.smartandfinal.com
• Virobay Inc., a Menlo Park, Calif.-based drug developer focused on neuropathic pain, autoimmune diseases and fibrosis, has filed for a $50 million IPO. It plans to trade on the Nasdaq under ticker symbol VBAY, with Piper Jaffray and JMP Securities serving as lead underwriters. Shareholders include TPG Biotech (28.6% pre-IPO stake), Sutter Hill Ventures (27.4%), Alta Partners (26.3%) and AbbVie (16.4%). www.virobay.com
• Google (Nasdaq: GOOG) has acquired Lift Labs, a San Francisco-based maker of a spoon that makes it easier to eat for people with Parkinson’s and other neurodegenerative tremors. No financial terms were disclosed. Lift Labs had been incubated by Rock Health. Read more.
• MTS Health Investors has sold FGTBA, a Tampa, Fla.-based provider of anesthesia management services, to TeamHealth Holdings Inc. (NYSE: TMH). No financial terms were disclosed. www.mtshealthinvestors.com
• EMC (NYSE: EMC) is considering a sale of VMWare, according to the NY Post. Read more.
• JDS Uniphase (Nasdaq: JDSU), a $2.8 billion maker of fiber optic networking equipment, said that it will split into two publicly-traded companies. One of the companies will focus on optical components and commercial lasers, while the other will focus on network software and services. Read more.
• Royal Bank of Scotland and Lloyds Banking Group said they would move their domiciles to England is Scotland votes in favor of independence next week. Read more.
• Twitter (Nasdaq: TWTR) said that it plans to raise up to $1.3 billion in a convertible senior note offering. www.twitter.com
FIRMS & FUNDS
• CCMP Capital Advisors, a New York-based mid-market buyout and growth equity firm, has closed its third independent fund with $3.6 billion in capital commitments. www.ccmpcapital.com
• Goldman Sachs has led the acquisition of around $350 million worth of stakes in distressed debt funds managed by a former unit of TCW Group, according to Bloomberg. Read more.
• The New York State Common Retirement Fund has hired Goldman Sachs to manage $2 billion in assets that is allocated to hedge funds. Read more.
MOVING IN, UP, ON & OUT
• Damien Coles has joined Kirkland & Ellis as a Hong Kong-based partner in the law firm’s corporate restructuring practice. He previously was with Hogan Lovells. www.kirkland.com
• Kurt DelBen has joined Madrona Venture Group as a venture partner. He previously spent more than 20 years with Microsoft Corp., most recently as president of its Microsoft Office division. He later served as senior advisor to the Secretary of the Secretary of the US Department of Health and Human Services, working to fix Healthcare.gov. www.madrona.com
• David Moffit, a former Morgan Stanley banker who more recently co-founded Mead Park, has agreed to join J.C. Flowers & Co. as head of a new fixed-income asset acquisition platform. Read more.
• Dave Odenath has joined private equity firm Altamont Capital Partners as an operating partner. He previously was a senior executive VP and head of the Americas for Legg Mason. www.altamontcapital.com
• Naresh Patwari has joined TA Associates as a Mumbai-based director focused on India and other emerging markets. He previously was a principal with ICICI Venture. www.ta.com
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