Atlas Venture this morning is holding its annual investor meeting in Boston, and led with some very big news: The veteran VC firm plans to split in half, with its healthcare and IT groups to raise separate funds as independent entities.
The healthcare team will retain the Atlas brand, and plans to raise a new fund next year that would be similar in size to the $265 million Atlas raised for its ninth fund in early 2013. The IT team will come up with a new name – but keep the firm’s Cambridge, Mass. office space – and is expected to raise a fund that is around half as big, believing that its seed and early-stage strategy is best followed when each of its five partners have around $25 million or so to invest.
Atlas partners Bruce Booth (healthcare) and Jeff Fagnan (tech) say that the split is not being driven by performance, as each side of the house has similar returns over the past several funds. Instead, it’s just a belief that the two investment strategies have grown further and further apart over the year, and that being a generalist no longer makes sense. That said, the combined group will continue to manage existing funds.
This is just the latest evolution for Atlas, which at one point had a $750 million fund and multiple offices throughout North America and Europe. It refocused on the Boston market in 2009, while still making opportunistic plays in areas like Silicon Valley. The current teams are expected to remain the same, with the healthcare side recently adding former Epizyme president and CFO Jason Rhodes as a partner.
• Deal data: The third quarter of 2014 is now in the books, which means quarterly data is beginning to roll in. Pitchbook reports that private equity deal activity slowed to its lowest level since Q1 2011, with $204 billion in global disbursements for 1,060 companies. It also found that global private equity fundraising fell from 109 funds raising $87 billion in Q2 to 91 funds raising $59 billion in Q3 (a number that is virtually identical to Q1 2014, and very similar to Q3 2013). On the upside, median exist size more than doubled – thanks to the high valuations that are causing new dealflow to slow.
As for venture capital, the party only intensified. More than 1,600 companies raised $21.3 billion, the second-highest quarterly total in the past decade. Fundraising slowed a bit with 73 VC funds raising $9 billion, compared to the 79 funds raising $14.5 billion in Q2 (for content, 51 funds raised $6.9b in Q3 2013). Expect the Q4 fundraising number to be a bit higher, however, as word is that NEA is formally back in market with another monster fund (not to mention the Tiger effort).
• Post-IPO: After market close yesterday, I spent some time on the phone with Vivint Solar CEO Greg Butterfield, whose Blackstone-backed company had just gone public. He mentioned that he hadn’t yet looked at the closing share price (for the record, Vivint finished up a single penny from its $16 per share pricing). I’ve heard a similar line from a number of other post-IPO CEOs over the years, and have decided that one of two things is true: (1) They are all liars who want to put forth the appearance of long-term stewards; or (2) They all simply have greater self-control than I would have. It’s probably #2…
• #GetLiquid: Our upcoming Liquidity Event in San Francisco is now sold out, with more than 700 of you expected to attend. Pretty sure it’s our fastest sell-out ever. I’m hoping we’ll be able to open up a few more tickets closer to the event so, if interested, please add your name to the waiting list at: http://TermSheetSF.eventbrite.com
THE BIG DEAL
• Wayfair, a Boston-based ecommerce company focused on the home furnishings market, raised around $319 million in its IPO. The company priced 11 million shares at $29 per share (above $25-$28 range), for an initial market cap of approximately $2.4 billion, were it to price in the middle of its range. It will trade on the NYSE under ticker symbol W, while Goldman Sachs was listed as left lead underwriter.
Wayfair reports a $51 million net loss on $574 million in revenue for the first half of 2014.
It had raised nearly $370 million in venture capital funding from such firms as Great Hill Partners (11.43%), HarbourVest Partners (7.03%), Battery Ventures (6.15%) and Spark Capital (4.4%). Included in that total is a $157 million investment earlier this year at a $2 billion valuation from a group of mutual funds led by T. Rowe Price (which is not listed as a significant shareholder in the filing) — $29 million of which was used to repurchase stock from insiders. www.wayfair.com
VENTURE CAPITAL DEALS
• Houzz, a Palo Alto, Calif.-based digital platform for home remodeling and design, has raised $165 million in new VC funding. Sequoia Capital led the round, and was joined by fellow return backers Oren Zeev, New Enterprise Associates, GGV Capital and Kleiner Perkins Caufield & Byers. New investors included DST Global and T. Rowe Price. The company previously raised around $48 million. www.houzz.com
• Visterra Inc., a Cambridge, Mass.-based developer of drugs for infectious diseases like seasonal and pandemic influenza, has raised $30 million in Series B funding. Merck Research Labs Venture Fund, Vertex Venture Holdings and Temasek were joined by return backers Polaris Partners, Flagship Ventures, Omega Funds and Alexandria Venture Investments. www.visterrainc.com
• Acutus Medical Inc., a San Diego–based developer of real-time 3D cardiac chamber imaging and dipole density mapping devices, has raised $26.2 million in new VC funding. No investor information was disclosed. www.acutusmedical.com
• Glow, a San Francisco-based women’s health and fertility company, has raised $17 million in Series B funding. Formation 8 led the round, and was joined by return backers Founder’s Fund and Andreessen Horowitz. www.glowing.com
• Tile, a San Mateo, Calif.-based miniature wearable for tracking “things you never want to lose,” has raised $9.5 million in Series A funding led by GGV Capital. The company also disclosed a $3.5 million seed round led by Tencent. Other investors include Tandem Capital, Rothenberg Ventures, AME Cloud Ventures, Slow Ventures and individual angels.www.thetileapp.com
• Cohealo Inc., a Boston-based provider of medical asset mobilization and analytics, has raised $9 million in Series A funding led by Romulus Capital and Krillion Ventures. www.cohealo.com
• ZenMate, a German provider of consumer security and privacy software, has raised $3.2 million in Series A funding. Holtzbrinck Ventures led the round, and was joined by Shortcut Ventures, T-Venture and return backer Project A Ventures. www.zenmate.com
• MoviePass, a New York–based movie theater subscription service, has raised $2.2 million in new VC funding led by Structure Capital and Chris Kelly (ex-chief privacy officer for Facebook). www.moviepass.com
• StackEngine, an Austin, Texas-based provider of Docker application deployment and management solutions, has raised $1 million in seed funding from Silverton Partners and LiveOak Venture Partners. www.stackengine.com
PRIVATE EQUITY DEALS
• Bonefish Capital has sponsored an acquisition of DataSpan, a Dallas–based provider of data storage products and management, from Media Recovery Inc. No financial terms were disclosed. www.dataspan.com
• China Investment Corp. and AVIC Capital have ended talks to acquire Avolon, a Dublin-based aircraft leasing company that was seeking a valuation of between $4 billion and $5 billion, according to Reuters. Avolon now is likely to pursue an IPO. It currently is owned by a private equity consortium that includes Cinven, CVC Capital Partners, Oak Hill Capital Partners and Temasek Holdings. Read more.
• Cosentry, an Omaha, Neb.-based portfolio company of TA Associates, has acquired Red Anvil, a Milwaukee-based managed data center provider. No financial terms were disclosed. www.cosentry.com
• EFG-Hermes Holding has agreed to acquire a 49% stake in a French wind power project portfolio from EDP Renovaveis SA for $208 million. Read more.
• Francisco Partners has agreed to acquire Vendavo Inc., a Mountain View, Calif.-based provider of revenue and price optimization and management solutions for B2B mid-market and enterprise companies. No financial terms were disclosed. Vendavo had raised VC funding from such firms as DCM, InterWest Partners, Sigma Partners and Split Rock Partners. www.vendavo.com
• Gryphon Investors has agreed to acquire a majority stake in Orchid Underwriters Inc., a Vero Beach, Fla.-based specialty underwriter of property insurance focusing on coastal properties. No financial terms were disclosed. www.gryphoninvestors.com
• Immucor, a Norcross, Ga.–based provider of transfusion and transplantation diagnostics, has acquired Sentilus Inc., a Durham, N.C.-based developer of a microarray-based technology for use in a variety of in vitro diagnostics areas. No financial terms were disclosed. Immucor is owned by TPG Capital. www.immucor.com
• Littlejohn & Co. has acquired Interior Specialists Inc., a Carlsbad, Calif.–based provider of interior design and installation services for the homebuilding industry. www.interiorspecialists.com
• Rhone Capital has completed its previously-announced acquisition of Ranpak Holdings Inc., a Concord Township, Ohio–based provider of paper-based systems for the “in-the-box” protective packaging market, from Odyssey Investment Partners. No financial terms were disclosed. www.ranpak.com
• Skillsoft Ltd., a Dublin, Ireland-based portfolio company of Charterhouse Capital Partners, has acquired SumTotal Systems LLC, a Gainesville, Fla.–based provider of HR solutions, from Vista Equity Partners. www.sumtotalsystems.com
• Trescal, a French calibration services company owned by Ardian, has made two acquisitions: Calibration Solutions Inc. (Cornelius, N.C.) and the calibration lab of GES SIEMSA (Madrid, Spain). No financial terms were disclosed. ww.trescal.fr
• JP Energy Partners LP, an Irving, Texas-based midstream energy company owned by ArcLight Capital Partners, raised $275 million in its IPO. The company priced 13.8 million shares at $20 per share (middle of $19-$21 range), for an initial market cap of approximately $364 million. It will trade on the NYSE under ticker symbol JPEP, while Barclays and BofA Merrill Lynch served as lead underwriters. www.jpenergypartners.com
• Pamplona Capital Management is considering a 2015 IPO in London for KCA Deutag Drilling, a Scotland-based provider of drilling and engineering services to the oil and gas industry, according to Bloomberg. Read more.
• Rocket Internet, the European tech incubator and investor, raised €605 million in its Frankfurt IPO. The offering valued Rocket Internet at around €5.3 billion. www.rocket-internet.com
• Virgin Money, the UK-based financial services group partially owned by Richard Branson, is planning to raise around £150 million in its London floatation later this month. Read more.
• VWR Corp., a Radnor, Penn.–based lab equipment maker owned by Madison Dearborn Partners, raised around $536 million in its IPO. The company priced 25.53 million shares at $21 per share (below $22-$25 offering range), for an initial market cap of approximately $2.68 billion. It will trade on the Nasdaq under ticker symbol VWR, while BofA Merrill Lynch, Goldman Sachs and J.P. Morgan served as lead underwriters. It reports $18.5 million of net income on around $2.07 billion in revenue for the first half of 2014. www.vwr.com
• Blackbaud Inc. (Nasdaq: BLKB) has completed its previously-announced acquisition of 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
• Gilde Buy Out Partners has retained J.P. Morgan to find a buyer for Dutch poultry producer Plukon Food Group, according to the FT. Read more.
• Quantcast, a San Francisco-based online analytics company, has acquired Struq, a London-based provider of creative optimization and retargeting solutions. No financial terms were disclosed. Quantcast has raised over $53 million in VC funding from Founders Fund, Revolution Ventures, Polaris Venture Partners, Cisco Systems and Glynn Capital Management. Struq had raised over $8 million from Allen & Co., Reed Elsevier Ventures and Pentech Ventures. www.quantcast.com
• Berkshire Hathaway has agreed to acquire Van Tuyl Group, an Irving, Texas-based auto dealership group. Read more.
• Builders FirstSource Inc. (Nasdaq: BLDR) has acquired Trim Tech of Austin Inc., a Hutto, Texas-based provider of custom cabinets, interior and exterior doors, stair parts, and custom millwork and molding. No financial terms were disclosed, except that Trim Tech generated around $13 million in 2013 revenue. www.bldr.com
• Glass Lewis & Co., a provider of governance research and technology services to institutional investors has acquired Meetyl, a San Francisco–based provider of direct engagement technology solutions between investors and issuers. No financial terms were disclosed. www.glasslewis.com
• MinuteKey Inc., a Boulder, Colo.-based self-service kiosk for duplicating keys, has secured up to $30 million in growth financing from Main Street Capital Corp. www.minutekey.com
• Post Holdings (NYSE: POST) has completed its previously-announced acquisition of the PowerBar and Musashi brands and related assets from Nestle SA. www.postholdings.com
• Starboard Value has offered to acquire RealD (NYSE: RLD), a Beverly Hills, Calif.-based 3D tech licensing company in which it holds at least a 9.9% stake. The $12 per share offer would value the company at around $540 million, and represents around a 29% premium to yesterday’s closing price. Read more.
FIRMS & FUNDS
• Perella Weinberg Partners has closed its debut growth equity fund with $600 million in capital commitments. www.pwpartners.com
•Relational Investors, an activist hedge fund led by Ralph Whitworth, is planning to wind down its current $6 billion worth of funds, according to the NY Times. It then will raise a new fund hat gives more operational control to the firm’s younger partners, as Whitworth recently disclosed a recurrence of throat cancer. Read more.
• Octopus Investments has acquired MedicX Holdings Ltd., a UK-based healthcare real estate investment manager. No financial terms were disclosed. www.octopusinvestments.com
MOVING IN, UP, ON & OUT
• Sven Baumann has agreed to join Citigroup as a Frankfurt-based managing director focused on private equity and corporate clients, effective next year (he will begin in London, before relocating). He previously was with BofA Merrill Lynch. www.citigroup.com
• Kimberly Pollack has stepped down as co-head of the corporate finance group with Levine Leichtman Capital Partners, in order to “spend more time with her family.” Fellow co-head Aaron Perlmutter will become the group’s sole lead. www.llcp.com
• Blake Shorthouse has joined KKR as a London-based director, with a focus on fundraising from European family offices, according to Dow Jones. He previously was with Credit Suisse as head of ultra-high net worth wealth management for Europe and MENA. www.kkr.com
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