A bunch of notes to kick off your Monday.
• New firm alert: Earlier this year we reported that private equity firm Chicago Growth Partners had abandoned plans to raise a third fund, and subsequently added that some of the team had hung their own shingle in Newport Beach (L Squared Capital Partners), backed by some large family offices.
Now comes word that several other CGP partners are launching a new Chicago-based firm called ParkerGale LP, which will focus on mid-market buyouts of tech-enabled services companies. The plan is to soon begin raising a $200 million-targeted debt fund. It also has some capital commitments from select LPs that would allow it to do one-off deals before the fund is formally raised.
ParkerGale’s five founding partners are: Devin Matthews, Dave Chandler, Jim Milbery, Kristina Heinze and Ryan Milligan.
“Some of the feedback we got from the market when trying unsuccessfully to raise CGP III was that we were too generalist, in that he did tech and healthcare and education and industrial,” Matthews explains. “So the tech team liked working together, and decided that it would make sense to try raising a much smaller, sector-focused fund.”
• Interstate commerce: When the California Public Employees’ Retirement System announced last month that it was abandoning hedge funds, the nation’s largest public pension system cautioned that it would need at least one year to “strategically exit” its $4 billion of existing investments. This sounded like it would slowly redeem its way out of the asset class, but the process may go much more quickly.
Sources familiar with the situation say that CalPERS already has received multiple indications of interest for some or all of its hedge fund holdings from other state pension funds. One of the sources identifies The State of Wisconsin Investment Board as a suitor, which makes sense given that it remains below its target exposure to hedge funds.
It is unclear what types of prices are being offered, as some prospective buyers may believe CalPERS to be a motivated buyer that is willing to accept deep discounts.
A CalPERS spokesman declined to confirm interest from other state funds, except to say that CalPERS will “evaluate all possibilities” with the portfolio. He added: “Ultimately, we will exit those investments in a manner that best serves the interests of the fund.” A Wisconsin Investment Board spokesman declined comment, saying the pension does not publicly discuss “investment strategy.”
• Election year: We’re less than a month away from the mid-term elections, so I took at look at the FEC database to see where VenturePAC – the National Venture Capital Association’s political action committee – has been spending its money. Through the end of August (most recent available numbers), it looked like the trade group was betting on Democratic candidates and causes, by a $216k-$178k margin (and a 41-35 margin, in terms of specific candidates).
But NVCA spokesman Ben Veghte says that VenturePAC has since evened things up a bit more, with the current tally at $277,100 for Democrats and $252,000 for Republicans. Is this a reflection of the NVCA believing that the electoral tide is turning red? Not according to Veghte, who gives the following explanation:
“NVCA is proud to support champions of the entrepreneurial ecosystem and always strives to give equally to Democrats and Republicans in each election cycle. When we looked at our distributions to date at the end of August, we realized we had given slightly more to Democrats this cycle, so we adjusted our allocations during the month of September to bring parity between both parties.”
• Feedback: As you might imagine, a lot of email came in after Friday’s column about New York’s tech scene. I owe you a mailbag, and a mailbag you soon shall have (most likely tomorrow).
• Flashback: The WSJ broke news on Friday that Yahoo is in talks to invest in a new Snapchat round at a $10 billion valuation. Subsequent reports suggest that the check could be for as little as $20 million. No idea how that jives with the following statement from Yahoo’s Chief Development Officer Jacqueline Reses, when speaking just a few months back at Fortune Brainstorm Tech:
“Yahoo is in a transformation and in order to transform the company, we all need to focus on the things that really matter and drive them to be successful. We need 100% of our attention on our core business… Venture investing, to me, is a hobby. If we had the time to have a hobby and we could set up a separate venture arm. But that hobby also takes the time of executives… Right now we prefer our executive team to focus on the business and growing that, as opposed to making small investments that we own a piece of.”
• Bittersweet: A bunch of you have emailed me for thoughts on the news that Thomson Reuters has sold peHUB and its affiliated trade pubs (Buyouts, VCJ) and conference business to a small Maryland-based publisher called UCG. All I can really do is wish them the best of luck, and hope they get the type of support at UCG that they clearly failed to get at the former mothership. The more information and competition the better.
• #GetLiquid: Our upcoming Liquidity Event in San Francisco is now sold out, with more than 700 of you expected to attend. 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
• Hewlett-Packard (NYSE: HPQ) said that it will split into a pair of separate, publicly-traded companies (which may each be Fortune 50 companies in their own right). One will focus on enterprise hardware and services (led by current HP CEO Meg Whitman), while the other will hold its consumer PC and printer business (Whitman will chair). As part of the split, HP also said that it will lay off an additional 5,000 employees.
From listening in on the analyst call this morning, it also sounds like some M&A is in the works. One does have to wonder, though, how the notion of succeeding via being smaller/more focused jives with prior reports that HP was considering some sort of merger with EMC. Also worth noting that Whitman will be interviewed on stage at 8:30pm ET this evening at Fortune’s Most Powerful Women Summit, which will be streamed live on Fortune.com. Read more.
VENTURE CAPITAL DEALS
• Square, a San Francisco-based mobile payments company, has raised $150 million in new VC funding led by Singapore’s GIC at a $6 billion valuation, according to the NY Times. Read more.
• Alteryx, an Irvine, Calif.-based provider of strategic analytics, has raised $60 million in Series B funding. Insight Venture Partners led the round, and was joined by return backers SAP Ventures and Toba Capital. www.alteryx.com
• Beepi Inc., a Los Altos, Calif.-based used-car marketplace, has raised $60 million in new VC funding at around a $200 million valuation, according to the WSJ. Foundation Capital and Sherpa Venture were joined by return backers like Redpoint Ventures. Read more.
• Infusionsoft, a Chandler, Ariz.-based provider of sales and marketing software for small businesses, has raised $55 million in Series D funding. Bain Capital Ventures led the round, and was joined by return backers Signal Peak Ventures and Goldman Sachs. www.infusionsoft.com
• Reduxio Systems, a San Francisco-based provider of enterprise hybrid storage arrays, has raised $15 million in Series B funding. Seagate Technology (Nasdaq: STX) led the round, and was joined by return backers Jerusalem Venture Partners, Carmel Ventures and Intel Capital. www.reduxio.com
• Adarza BioSystems Inc., a Rochester, N.Y.-based provider of label-free multiplex assays, has raised $6.8 million in Series A funding co-led by Cultivation Capital Life Science Fund and the Siemens Venture Capital. www.adarzabio.com
• SynGen Inc., a Sacramento, Calif.-based regenerative medicine company focused on stem cell harvesting system, has raised an undisclosed amount of new VC funding from existing shareholder Bay City Capital. www.syngeninc.com
PRIVATE EQUITY DEALS
• KKR has agreed to acquire certain oil and gas properties in the Ector and Midland Counties of the Permian Basin from Linn Energy (Nasdaq: LINE) for $350 million. The deal is expected to close later this year, and is being done via a partnership between KKR Natural Resources and Fleur de Lis Energy. www.kkr.com
• Oak Hill Capital Partners has completed its previously-announced acquisition of Berlin Packaging LLC, a Chicago-based packaging company, from Investcorp for $1.43 billion (including debt). The deal is valued at $1.43 billion (including debt). www.berlinpackaging.com
• Palm Beach Capital has acquired an undisclosed stake in Harold Levinson Associates, a Farmingdale, N.Y.–based distributor to convenience store and tobacco shops. No financial terms were disclosed. www.hladist.com
• CVC Capital Partners has “revived plans” for a Singapore IPO of auto racing company Formula One if sales talks with Liberty Global and Discovery Communications fall through, according to Bloomberg. Read more.
• Dermira Inc., Redwood City, Calif.-based developer of dermatology therapies, raised $125 million in its IPO. The pre-revenue company priced 7.8 million shares at $16 per share, compared to earlier plans to offer 5.35 million shares at between $14 and $16 per share. It will trade on the Nasdaq under ticker symbol DERM, while Citigroup and Leerink Partners served as lead underwriters. Dermira had raised around $105 million n VC funding, from firms like Bay City Capital (21% pre-IPO stake), New Enterprise Associates (21%), Canaan Partners (15%), UCB (8.4%), Maruho Co. (7.3%), Apple Tree Partners (6.4%) and Fidelity Investments (6.4%). www.dermira.com
• eHi Car Services Ltd., a Chinese car services and rental company, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol EHIC, with J.P. Morgan, Goldman Sachs (Asia) and Deutsche Bank Securities serving as lead underwriters. The company reports around a $21 million net loss on nearly $62 million in revenue for the first half of 2014. Shareholders include Ctrip (23% pre-IPO stake), CDH Venture Partners (12.9%), Qiming Venture Partners (11.9%), an affiliate of Goldman Sachs (10.7%) and Ignition Partners (9.1%). www.ehicar.com
• Hubspot Inc., a Boston-based provider of a marketing and sales SaaS platform, has increased its IPO price range from $19-$21 per share to $22-$24 per share. It still plans to offer 5 million shares, and now would have an initial market cap of approximately $698 million, were it to price in the middle of its range. The company plans to trade on the NYSE under ticker symbol HUBS, with Morgan Stanley, J.P. Morgan and UBS serving as lead underwriters. Hubspot reports a $17.7 million net loss on around $51 million in revenue for the first half of 2014, compared to a $16.43 million net loss on $35 million in revenue for the year-earlier period. Hubspot has raised around $100 million in VC funding, from firms like General Catalyst Partners (27.1% pre-IPO stake), Matrix Partners (17.1%), Sequoia Capital (10.3%), Scale Venture Partners (6.8%) and Charles River Ventures (5%). www.hubspot.com
• Nevro Corp., a Menlo Park, Calif.-based maker of medical devices to treat chronic pain and other neurological disorders, has filed for a $115 million IPO. It plans to trade on the NYSE under ticker symbol NVRO, with J.P. Morgan and Morgan Stanley serving as lead underwriters. The company reports around a $14 million net loss on $14 million in revenue for the first half of 2014. It has raised around $106 million in VC funding, from firms like Johnson & Johnson Development Corp. (18.3% pre-IPO stake), Bay City Capital (13.4%), Three Arch Partners (13.4%), Novo AS (12%), AMV Partners (10.2%), Aberdare Ventures (9.8%), New Enterprise Associates (7.6%) and the Mayo Clinic. www.nevro.com
• Zayo Group LLC, a Louisville, Colo.-based provider of bandwidth infrastructure and network neutral colocation services, has set its IPO terms to 28.9 million shares being offered at between $21 and $24 per share. The company plans to trade on the NYSE under ticker symbol ZAYO, with Morgan Stanley, Barclays and Goldman Sachs serving as lead underwriters. The company reports a $106 million net loss on $827 million in revenue for the nine months ending March 31, 2014, compared to a $113 million net loss on $743 million in revenue for the year-earlier period. Shareholders include Battery Ventures, GTCR, Bridgescale Partners, Centennial Ventures, Charlesbank Capital Partners, Columbia Capital, M/C Partners, Morgan Stanley, North Sky Capital and Oak Investment Partners. www.zayo.com
• Littlejohn & Co. has hired Morgan Stanley to find a buyer for Henniges, an Auburn Hills, Mich.-based provider of vehicle sealing and anti-vibration solutions for the automotive industry, according to Reuters. A deal could be valued at more than $600 million (including debt). Read more.
• Littlejohn & Co. has hired Barclays to find a buyer for SunSource, an Addison, Ill.-based provider of fluid power and motion control parts for the North American industrial and mobile equipment markets, according to Reuters. A deal could be valued at more than $600 million (including debt). Read more.
• Permira is in talks to sell Japanese agricultural chemical company Arysta LifeScience Ltd. to Platform Specialty Products Corp. (NYSE: PAH) for around $3.5 billion (including debt), according to Reuters. Arysta currently is in registration for a U.S. IPO. Read more.
• Becton Dickinson (NYSE: BDX) has agreed to acquire CareFusion (NYSE: CFN) for $12.2 billion, or $58 per share in cash and stock (26% premium to Friday’s closing price). Read more.
• Fortress Investment Group has partnered with Italian property firm Prelios on a leading bid to acquire the bad-loan unit of UniCredit, according to Reuters. Read more.
• Shiloh Industries Inc. (Nasdaq: SHLO) has acquired Radar Industries Inc., a Warren, Mich.-based provider of interior, chassis and powertrain components and welded assemblies for the auto industry. No financial terms were disclosed. www.radarind.com
• Walt Disney Co. has agreed to invest €420 million into Euro Disney, as part of a larger recap. Read more.
FIRMS & FUNDS
• Amiti, a Chicago-based VC firm focused on Israeli startups, is raising upwards of $75 million for its second fund, according to a regulatory filing. www.amiticapital.com
• Castanea Partners, a Newton, Mass.-based private equity firm focused on branded consumer products, has closed its fourth fund with $600 million in capital commitments. www.castaneapartners.com
• Thrive Capital, a New York-based early-stage VC firm, has raised $400 million for its fourth fund. LPs include Princeton University and Wellcome Trust. Read more. http://fortune.com/2014/10/06/with-new-400-million-fund-thrive-capital-is-new-yorks-quietest-success-story/
• TVM Capital Life Science has closed its seventh fund with $201.6 million in capital commitments. www.tvm-lifescience.com
MOVING IN, UP, ON & OUT
• Cyril Demaria has joined UBS as a Switzerland-based executive director and private market analyst. He is the former chief investment officer for Tiaré Investment Management AG. www.ubs.com
• Jay Wintrob has agreed to join Oaktree Capital Group LLC (NYSE: OAK) as its first CEO, effective November 1. He is a longtime AIG executive whose roles have included running SunAmerica. www.oaktreecapital.com
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