Hey Boston: Let's Get Liquid!
I am excited to announce that we will be hosting our next Liquidity Event at the New England Aquarium in Boston, on Tuesday, February 24. Tickets are now available at http://GetLiquidBoston.eventbrite.com.
No content, just cocktails and conversation with the Bay State’s top deal-makers, deal-breakers, entrepreneurs and assorted hangers-on. Plus yours truly, an open bar and tons of penguins.
Tickets cost just $15, plus a small service charge. All ticket proceeds will go to a local nonprofit, and you can vote for the “winner” when buying your ticket.
We can’t do this without our sponsors, so a HUGE thanks to:
- .406 Ventures
- Choate LLP,
- Citizens Bank
- FKA (firm formerly known as Atlas Venture)
- Murray Devine
We’ve sold out every past Liquidity Event, and don’t expect this one to be any different. In other words, be sure to get your ticket today. I can’t wait to see you there…
• Silicon Valley suit: When venture capital firm Formation 8 was raising $500 million for a new fund last year, prospective limited partners were not aware of sexual assault allegations that had been made against firm co-founder Joe Lonsdale, Fortune has learned.
The charges came to light publicly last week in a civil lawsuit filed against Lonsdale and Formation 8 by Ellie Clougherty, a former Stanford student who had dated Lonsdale for around one year beginning in February 2012. The complaint is, in a word, brutal – with a narrative that leave little room for “maybe they saw things differently” interpretations. It also is being denied in its entirety by Lonsdale, who has filed a lengthy defamation claim in response. And, for the record, I have absolutely no idea who is telling the truth, except that someone is certainly lying.
What I do know, however, is the timeline, vis-à-vis Formation 8’s fundraise. The firm began marketing its second fund over the summer, and held a final close in the first half of October (despite not disclosing it publicly until early December). At the time of the close, Formation 8 was aware that Clougherty had made certain allegations against Lonsdale to Stanford University, which had resulted in Lonsdale being banned from campus for the next ten years (Lonsdale had been advisor to a class that Clougherty had taken). It is unclear exactly what the firm, or even Lonsdale, knew about the specific charges, however, due to Stanford policies that can keep such information even from the accused. Multiple sources suggest that Formation 8 only believed the alleged transgression related to crossing the line between mentor/mentee.
That said, I think it’s reasonable to argue that Formation 8 should have disclosed the Stanford ban to prospective LPs (even though Lonsdale is appealing it). After all, a Silicon Valley VC having to avoid Stanford is a bit like a New York City VC having to avoid 5th Avenue.
There was no way for the firm to provide information on the lawsuit, however, as I’m told that neither the firm nor Lonsdale were expecting litigation. That perhaps goes double for Formation 8, which was named as a defendant because Clougherty claims to have briefly been an intern with the firm during her relationship with Lonsdale (something Formation 8 explicitly denies).
The question for Formation 8 LPs is what to do now. Lonsdale seems unlikely to settle, and a trial wouldn’t occur for at least a year. The firm would almost certainly allow LPs out of their nascent commitments if requested – the fund was oversubscribed, which probably means it could find replacement capital – but, to date, no LPs I’ve spoken with want out. Instead, they are in wait-and-see mode. So am I.
• Your Radio Shack story: It looks like Radio Shack is finally about to close, with Amazon reportedly in talks to buy some of its physical storefronts. I’m putting together a post about people’s first memories or early experiences at Radio Shack, which was such an important retailer for technologists in the 1970s, 1980s and early 1990s. If you have an anecdote to share, I’d love to include it. Please email me.
THE BIG DEAL
• Sysco (NYSE: SYY) has agreed to sell 11 distribution centers to Performance Food Group, a portfolio company of Wellington Capital Management. The move would be designed to help Sysco gain regulatory approval for its pending $3.5 billion acquisition of US Foods from KKR and Clayton Dubilier & Rice. Read more.
VENTURE CAPITAL DEALS
• kCura, a Chicago–based provider of e-discovery software, has raised $125 million in minority equity funding from ICONIQ Capital. www.kcura.com
• Guardant Health, a Redwood City, Calif.–based developer of biopsy-free cancer screening tests, has raised $50 million in Series C funding. Lightspeed Venture Partners led the round, and was joined by Formation 8 and return backers Khosla Ventures and Sequoia Capital. www.guardanthealth.com
• FirstCry.com, a Mumbai-based ecommerce company focused on baby products, has raised $26 million in Series D funding led by Valiant Capital Partners. Read more.
• WaVe Life Sciences, a nucleic acid therapeutics startup with offices in Boston and Japan, has raised $18 million in Series A funding. RA Capital Management and Kagoshima Shinsangyo Sosei Investment were joined by return backer SNBL Ltd. www.wavelifesciences.com
• Revinate, a San Francisco-based provider of guest experience software for the hospitality industry, has raised $15.34 million in Series B funding. Tenaya Capital, Northgate Capital and Industry Ventures were joined by return backers including Benchmark, Formation 8 and Tao Capital Partners. www.revinate.com
• KnCMiner, a bitcoin mining company, has raised $15 million in Series B funding. Accel Partners led the round, and was joined by Creandum, GP Bullhound and Martin Wattin. www.kncminer.com
• Pley, a Santa Clara, Calif.-based LEGO subscription service, has raised $10 million in Series B fundiong. Sozo Ventures led the round, and was joined by return backers Floodgate,
Correlation Ventures, Maven Ventures and Allegro Venture Partners. www.pleyworld.com
• AnyPerk, a San Francisco-based platform for companies that want to provide employee perks and discounts, has raised $8.5 million in Series A funding. DCM Ventures led the round, and was joined by return backer Digital Garage. www.anyperk.com
• nToggle, a Boston-based provider of programmatic advertising software, has raised $5.6 million in Series A funding co-led by Sigma Prime Ventures and Bessemer Venture Partners. www.notggle.com
• Skipta, a Lancaster, Penn.-based provider of online specialty and disease state medical communities for verified healthcare professionals, has raised $2.5 million in Series A funding from Mansa Capital. www.skipta.com
PRIVATE EQUITY DEALS
• Columbus Nova has agreed to acquire online gaming business Sony Online Entertainment from Sony Corp. for an undisclosed amount. Read more.
• Custopharm Inc., a Carlsbad, Calif.-based generic injectable drug services company, has raised an undisclosed amount of private equity funding from Water Street Healthcare Partners. www.custopharm.com
• Duff & Phelps Corp., a New York-based valuation and corporate finance advisor, has agreed to acquire American Appraisal Associates Inc., a Milwaukee–based service valuation and fixed asset management advisor. No financial terms were disclosed. Duff & Phelps has been owned since 2012 by an investor group that includes The Carlyle Group, Stone Point Capital, Pictet & Cie and Edmond de Rothschild Group. www.duffandphelps.com
• M1, a Lebanese private equity firm, reportedly has acquired denim brand Pepe Jeans London from Torreal, Arta Capital and L Capital for an undisclosed amount. Morgan Stanley managed the process. Read more.
• Marlin Equity Partners has acquired Pendum, an Elmhurst, Ill.-based provider of ATMs and other cash automation equipment for the financial and retail markets, from H.I.G. Capital. No financial terms were disclosed. www.pendum.com
• Mid Europa Partners has agreed to acquire a majority stake in Danube Foods Group, a Serbian foods group that includes dairy producers and a mineral water bottling plant. No financial terms were disclosed, except that Danube generated around $453 million in 2014 revenue. Read more.
• NEP Group Inc., a portfolio company of Crestview Partners, has acquired The Screen Store Group, a company specializing in live broadcasts of sports and entertainment events. No financial terms were disclosed. www.nepinc.com
• The Ontario Teachers’ Pension Plan has acquired of PODS Inc., a Clearwater, Fla.-based portable moving and storage company, from Arcapita for more than $1 billion. www.pods.com
• AutoGenomics Inc., a Vista, Calif.-based maker of molecular diagnostics systems, has set its IPO terms to 3.75 million shares being offered at between $11 and $13 per share. It would have an initial market cap of approximately $123 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol AGMX, with Stifel, Canaccord Genuity and Cantor Fitzgerald serving as lead underwriters. This is the third time that AutoGenomics has filed for an IPO, having withdrawn its two prior registrations (most recently in Nov. 2013). www.autogenomics.com
• IASIS Healthcare Corp., a Franklin, Tenn.-based healthcare services company owned by TPG Capital, has filed for a $100 million IPO (likely a placeholder figure). The company plans to trade on the NYSE under ticker symbol IAS, with J.P. Morgan, BofA Merrill Lynch and Barclays serving as lead underwriters. It reports $9.3 million in net income on $2.5 billion in revenue for the year ending Sept. 30, 2014. www.iasishealthcare.com
• Invitae Corp., a San Francisco-based company that plans to “bring genetic information into routine medical practice,” has set its IPO terms to 5.35million shares being offered at between $13 and $15 per share. It would have an initial market cap of approximately $417 million, were it to price in the middle of its range. The company plans to trade on the NYSE under ticker symbol NVTA, with J.P. Morgan serving as lead underwriter. The company has raised around $195 million in VC funding, from firms like Baker Brothers (20.6% pre-IPO stake), BlackRock (17%), Thomas McNerney & Partners (15.2%), Genomic Health Inc. (9%), The Broe Group, Decheng Capital, Deerfield Management, OrbiMed, Perceptive Advisors, Rock Springs Capital, Wellington Management Co., Casdin Capital, Genesys Capital and Redmile Group. www.invitae.com
• MBK Partners has launched a sale process for South Korea’s HK Savings Bank, according to Reuters. Read more.
• Trilantic Capital Partners has hired Robert W. Baird & Co. to find a buyer for Implus Corp., a Durham, N.C.-based maker of footwear and recreational accessories, according to Dow Jones. The company could be worth upwards of $600 million. Read more.
• SS&C Technologies Holdings Inc. (Nasdaq: SSNC) has agreed to acquire Advent Software Inc., a San Francisco–based provider of software and services for the global investment management industry, for approximately $2.7 billion in cash. Read more.
• Staples (Nasdaq: SPLS) and Office Depot (Nasdaq: ODP) are in advanced talks to merge, according to the WSJ. Read more.
• Verizon Communications (NYSE: VZ) is nearing a deal to sell a package of assets, including cellular towers and some of its wireline business, via a series of transactions that could be worth more than $15 billion, according to the WSJ. Read more.
FIRMS & FUNDS
• Crestview Partners has closed its third private equity fund with more than $3.25 billion in capital commitments (including $250m from the general partner). www.crestview.com
• EMR Capital, an Australian private equity firm, has closed a new mining-focused fund with A$450 million in capital commitments. Read more.
MOVING IN, UP, ON & OUT
• Adams Street Partners, a private equity firm with more than $26 billion in assets under management, announced that head of investments Jeff Diehl will take on the additional title of managing partner, effective July 1. As part of the move, CEO Bon French will transition into a chairman role. www.adamstreetpartners.com
• Cinven has promoted Yalin Karadogan, Pontus Pettersson and Maxim Crewe to partner. Karadogan joined the UK-based buyout firm in 2006, and has worked on such deals as Pronet Güvenlik. Pettersson joined in 2011 from KKR, and has worked on such deals as CeramTec GmbH and Prezioso-Technilor. Crewe joined in 2006 and has worked on Avolon and Guardian Financial Services. www.cinven.com
• Alec Saunders has joined Microsoft Ventures. He is a former Microsoft employee who most recently was VP of BlackBerry’s QNX cloud business unit. Read more.
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