Greetings from San Francisco, where hundreds of Term Sheet readers gathered last night for our annual Liquidity Event. It was great catching up with so many of you, and meeting a bunch of new people. I’m also pleased to announce that the event raised $11,000 for KIPP Bay Area Schools, which runs free and open-enrollment public charter schools in under-served San Francisco communities.
Finally, a sincere thank you to our sponsors, without whom there would have been no open bar, food trucks or giant screen for the World Series game. They were: Andreessen Horowitz, Gunderson Dettmer, NEA, Preqin and TriplePoint Capital.
• The truth comes out: There’s an old joke in sports that when a player says contract negotiations aren’t about the money, it’s always about the money. Same thing seems to be true in some of these tax inversion deals, in which the U.S. acquirer insists it’s about synergies, cost savings via eliminating redundancy and everything except for taxes.
So what to make of AbbVie, the Chicago-based drugmaker that yesterday officially killed off its $54 billion deal for Ireland-based Shire? After originally saying that the deal wasn’t being driven by taxes, it blamed its failure to finish – which means it will pay a $1.6 billion termination fee – thusly: U.S. Treasury “reinterpreted longstanding tax principles in a uniquely selective manner designed specifically to destroy the financial benefits of these types of transactions.” But I thought the financial benefit was due to strategic synergies? At least give AbbVie credit for pulling the plug on behalf of long-term shareholder value, rather than proceeding in order to save short-term face.
• That was different: Casual dining operator Brinker International today reported earnings in line with analyst estimates but, in explaining to CNBC why his company didn’t beat the street, CEO Wyman Roberts made special note about how the company had significantly increased its use of fresh avocados at the very time that avocado prices are soaring. Somewhere inside IBM, someone is thinking: Avocados! Why didn’t we think of that?
• Burning up: Last night, I had at least a dozen different conversations that touched on the issue of high cash burn rates at VC-backed startups (an issue first highlighted last month by Benchmark’s Bill Gurley). Here’s a corollary: Venture capital raised a ton of money in Q4 2013/Q1 2014. Not more funds (in terms of volume) than we see in market now or are expecting soon, but certainly much more in terms of dollars. And a lot of those funds have been investing quickly, particularly in large, later-stage rounds for so-called unicorns. The old 4-year investing cycle for such funds has been severely shortened to a 2-3 year time frame.
Okay. What if we get the sort of stock market correction that would strand many of those cash-burning startups? Wouldn’t the same correction adversely affect the VC firms that have been “burning” their own cash and need to raise new funds? LPs would be asked to re-up at a time when IRRs have stabilized/fallen, and when they may have their own liquidity troubles. Yes, VC firms could always target smaller raises, but many of the larger ones have build up giant infrastructures that are heavily reliant on annual fees that are tied to fund size…
THE BIG DEAL
• EQT Partners is the frontrunner for the hearing aids business of Siemens AG, according to Bloomberg. The deal could be valued at more than €2 billion, with Permira and Denmark’s GN Store Nord also having should interest. Read more.
VENTURE CAPITAL DEALS
• PT Tokopedia, an Indonesian e-commerce company, has raised $100 million in new VC funding. SoftBank Corp. led the round, and was joined by Sequoia Capital and return backer SB Pan Asia Fund. Read more.
• SnapLogic, a San Mateo, Calif.-based enterprise cloud integration company, has raised $20 million in a first close on its Series D round. Ignition Partners led the close, and was joined by Andreessen Horowitz, H. Barton Asset Management, Pharus Capital Management and Triangle Peak Partners. The company now has raised $60 million in total VC funding. www.snaplogic.com
• B2X Care Solutions, a Germany-based provider of customer care solutions for smartphones, has raised $15 million in Series B funding led by Earlybird Venture Capital. The company also announced that it has acquired a majority stake in The Service Solutions, an India-based provider of managed care services to smartphone manufacturers (including Apple). www.b2x.com
• InSilixa Inc., a Sunnyvale, Calif.-based developer of a molecular diagnostics platform, has raised $13 million in new VC funding from PointGuard Ventures and Morningside. www.insilixa.com
• Unum Therapeutics, a Cambridge, Mass.-based developer of cellular immunotherapy to treat cancer, has raised $12 million in Series A funding. Fidelity Biosciences and Atlas Venture co-led the round, and were joined by Sanofi-Genzyme BioVentures. www.unumrx.com
• Spikes Security, a Los Gatos, Calif.-based provider of browser malware isolation solutions, has raised $11 million in Series A funding. Backers include Lakewood & Co., Benhamou Global Ventures and Javelin Venture Partners. www.spikes.com
• YieldMo, a New York-based mobile ad startup, has raised $10 million in new VC funding. Timer Warner Investments led the round, and was joined by return backers Google Ventures and Union Square Ventures. www.yieldmo.com
• Flint Mobile, a Redwood City, Calif.-based developer of mobile payment solutions for small businesses, has raised $9.4 million in Series C funding. Verizon Ventures led the round, and was joined by Peninsula Ventures and return backers Digicel, Storm Ventures and True Ventures. www.flintmo.com
• Lytics, a Portland, Ore.-based developer of digital marketing tools, has raised $7 million in Series A funding led by Comcast Ventures. Read more.
• KnowRe, a Seoul-based digital math learning platform for secondary students, has raised $6.8 million in Series A funding. SoftBank Ventures Korea led the round, and was joined by KTB Ventures, Partners Fund and SparkLabs Global Ventures. Read more.
• StackIQ, a La Jolla, Calif.–based provider of enterprise IT automation solutions, has raised $6 million in Series B funding. Grayhawk Capital, Keshif Ventures, DLA Piper, and OurCrowd were joined by return backers Anthem Venture Partners and Avalon Ventures. www.stackiq.com
• HMicro, a Los Altos, Calif.-based developer of disposable wireless platforms for medical, industrial and IoT manufacturers, has raised $5.5 million in Series B funding. Backers include Reddy Capital Partners and Seraph Group. www.hmicro.com
• YouAppi, a New York-based provider of mobile customer acquisition solutions, has raised $3 million in Series A funding from Glilot Capital Partners, 2B Angels and Flint Capital. www.youappi,com
• Reputation Institute, a New York-based research and advisory organization focused on corporate reputation, has raised an undisclosed amount of second-round funding from Catalyst Investors. www.reputationinstitute.com
PRIVATE EQUITY DEALS
• The Blackstone Group has formed Onyx Renewable Partners, which will develop, finance, construct and operate utility scale wind and solar renewable power projects in North America. Onyx will be led by Matthew Rosenblum, founder and CEO of Solops LLC. www.blackstone.com
• Champ Private Equity has agreed to carve two businesses out of coatings and chemicals company Nuplex (NZ: NPX) — Nuplex Specialties (distribution) and Nuplex Masterbatch (plastics additives) – for A$127.5 million. www.nuplex.com
• Cision, Sweden-based provider of PR and social software, has acquired UK-based media monitoring group Gorkana for an undisclosed amount. Cision is a portfolio company of GTCR, and recently made two other transactions: The merger with Vocus, and the acquisition of Visible Technologies. www.cision.com
• Fortress Investment Group has acquired Omnisure Group LLC, a Chicago–based provider of payment plans for retail vehicle service contracts, from Lincoln Park Capital. No financial terms were disclosed. www.omnisuregroup.com
• North Bridge Growth Equity has acquired a majority stake in Atlanta-based Ingenious Med, a cloud-based, patient encounter platform for the healthcare market. No financial terms were disclosed. www.IngeniousMed.com
• The Ontario Teachers’ Pension Plan has agreed to acquire a 29.7% stake in CSC ServiceWorks, a Plainview, N.Y.–based provider of multi-family housing and commercial laundry services. No financial terms were disclosed. CSC ServiceWorks is a portfolio company of Pamplona Capital Management. www.coinmachservicecorp.com
• Palladin Consumer Retail Partners has acquired a majority stake in luxury shoemaker Harrys of London. No financial terms were disclosed. www.pcrp.com
• Providence Equity Partners has acquired a stake in RentPath, a Norcross, Ga.–based real estate listings company, from TPG Capital. No financial terms were disclosed. Providence and TPG now hold an equal stake in the company. www.rentpath.com
• Recapture Solutions LLC, a Houston-based portfolio company of Intervale Capital, has acquired Flex Leasing Power & Service, a leasor of remote well-site power generation turbines for the North American oil and gas market. No financial terms were disclosed. www.recapturesolutions.com
• Sentinel Capital Partners has acquired Hollander Sleep Products, a Boca Raton, Fla.–based maker of basic bedding products, from HGGC. No financial terms were disclosed. www.hollander.com
• Proteon Therapeutics, a Waltham, Mass. Developer of renal and vascular therapies, raised $61 million in its IPO. The company priced 6.1 million shares at $10 per share, compared to plans to offer 4.7 million shares at between $12 and $14 per share. It will trade on the Nasdaq under ticker symbol PRTO, while Stifel and JMP Securities served as lead underwriters. The pre-revenue company had raised around $125 million in VC funding, from firms like TVM Capital (19.4% pre-IPO stake), Abingworth (19.1%), Prism VentureWorks (15.6%), Skyline Ventures (15.3%), Deerfield Management (10.5%), Pharmastandard International SA (10.5%), Intersouth Partners (10.4%) and MPM Capital (10.3%).www.proteontherapeutics.com
• Viamet Pharmaceuticals Holdings, a Morrisville, N.C.-based developer of inhibitors of validated metalloenzymes, has withdrawn registration for a $75 million IPO. Yesterday the company announced that it has raised $60 million in Series D funding. www.viamet.com
• Bertelsmann has agreed to acquire Relias Learning, a Cary, N.C.–based provider of training and compliance SaaS solutions for the health and human services market, from Vista Equity Partners and LLR Partners. No financial terms were disclosed. www.reliaslearning.com
• Good Technology, a Sunnyvale, Calif.-based provider of enterprise mobility solutions, has acquired Macheen Inc., an Austin, Texas-based cloud service provider for connected devices, for approximately $8.3 million in stock. Good Technology has raised more than $150 million in VC funding and is in registration for an IPO, while Macheen has raised over $30 million in VC funding from firms like GemVentures, North Bridge Venture Partners and DFJ Mercury. www.macheen.com
• GTCR has hired Goldman Sachs and Jefferies to find a buyer for Sterigenics International, a Deerfield, Ill.–based provider of outsourced contract sterilization services, according to Reuters. Sterigenics, which recently acquired Nordion for $727 million, could be valued at upwards of $1.5 billion. Read more.
Yahoo (Nasdaq: YHOO) is in talks to acquire San Francisco-based ad platform BrightRoll for approximately $700 million, according to TechCrunch. BrightRoll has raised over $40 million in VC funding from firms like Adams Street Partners, Scale Venture Partners, KPG Ventures, True Ventures and Trident Capital. Read more.
• EMC Corp. (NYSE: EMC) has agreed to buy out most of Cisco Systems Inc.’s (Nasdaq: CSCO) minority stake in VCE, a joint venture that provides converged infrastructure solutions for private cloud computing. No financial terms were disclosed. No financial terms were disclosed, except that Cisco originally invested $716 million but so far reports $644 million in related losses. www.emc.com
• BGC Partners (Nasdaq: BGCP) is launching a hostile bid for rival brokerage and clearing firm GFI Group (NYSE: GFIG), after GFI previously rejected a $675 million cash buyout offer. CME Group (Nasdaq: CME) has an existing agreement to acquire GFI in a two-part deal that would involve GFI spinning off its wholesale brokerage and clearing business into an independent company. BGC currently holds a 13.5% stake in GFI.www.gfigroup.com
• Morgan Stanley is considering a sale of a planned natural gas exporting project, or bringing in a partner to run it, according to multiple press reports. Read more.
FIRMS & FUNDS
• Apollo Global Management is planning to raise between $2 billion and $3 billion for its second natural resources private equity fund, according to Reuters. Read more.
• Carmel Ventures, an Israeli venture capital firm, has closed its fourth fund with $194 million in capital commitments. Limited partners include Horsley Bridge, Ping An Group, Baidu and Qihoo360. www.carmelventures.com
• Freeman Spogli & Co., a private equity firm focused on middle-market consumer and distribution businesses, has closed its seventh fund with $1.3 billion in capital commitments. Lazard served as placement agent. www.freemanspogli.com
• Jaguar Growth Partners, a New York-based investment management and advisory firm, has secured a strategic investment from New York Life Insurance Co. No financial terms were disclosed. www.jaguargrowth.com
• Tallwave Capital, an Arizona-based seed investment firm focused on the tech space, has raised $13.15 million for its debut fund. www.tallwave.com
MOVING IN, UP, ON & OUT
• Nathan Elliott has joined Balance Point Capital Partners, a provider of mezzanine and equity capital to U.S. lower-middle-market companies, as a vice president. He previously was a VP with Jefferies Finance LLC. www.balancepointcapital.com
• Sachin Sood has joined venture firm Social+Capital Partnership as VP of finance. He previously served in a similar role with eVentures. www.s23p.com
• Marty Turco, a former NHL goalie, has joined real estate private equity firm Baceline Investments as director of business development. www.bacelineinvestments.com
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