Nearly three years ago I wrote about private equity’s “golden hangover” — or how a majority of the 25 largest leveraged buyouts completed between 2005 and 2008 still remained in private equity hands.
Yesterday I went back to look at the list, and learned that just seven remain PE-owned and, of those, four have filed for IPOs that are expected to occur by year-end (Albertson’s, First Data, Sungard and Univision). Moreover, Blackstone has already offloaded most of its Equity Office holdings, with the remainder expected to be sold within the next few months. That could mean that, by January, only Avaya and (part of) Clear Channel would remain PE-owned.
• Recommended reading: Kirk Kardashian has a new piece up at Fortune this morning about algorithmic VC investing, which basically asks if a Moneyball-style approach to venture could help improve returns.
Among the advocates for this less-human approach is Bill Hambrecht, whose WR Hambrecht Ventures has been using an “investment strategy that combines predictive modeling and Clayton Christensen’s disruption theory.” And Hambrecht is hardly alone, given the existence of firms like Correlation Ventures (even Google Ventures has discussed its use of algorithms), but clearly this goes against the basic VC mantra of investing in people, etc. Take a look and let me know your thoughts…
• Data dive: Yesterday we noted how new Cambridge Associates data suggested that U.S. VC performance had topped both U.S. PE and the S&P 500 during 2014. The research firm also disclosed that U.S. venture distributions were up 37.3% to around $30 billion, which would suggest that my recent liquidity concerns (i.e., too few IPOs) are overstated.
What we still don’t know, unfortunately, are which funds are contained within the Cambridge Associates sample. For example, was Sequoia’s fund that contain WhatsApp included? If so, that would account for more than 10% of the total. Doesn’t mean the figure is wrong, but the skew would provide greater context. As I’ve written before, the onus for better industry data is on general partners.
• Heads up: Speaking of liquidity, I’ll be keeping a close eye on Fitbit’s first quarterly earnings since going public (they report after the closing bell). In case you haven’t been paying attention, the company is now valued at north of $10 billion, easily making it the year’s most successful “unicorn” exit.
• Just saying: Comcast yesterday announced that it will double the download speed of its Internet Essentials service, which is aimed reducing the digital divide by providing more affordable Internet service to low-income families. Kind of strange, given that it’s just the sort of infrastructure investment that companies like Comcast said would disappear once net neutrality rules went into effect…
THE BIG DEAL
• Silver Lake Partners has agreed to make a $1 billion convertible note investment into Motorola Solutions Inc. (NYSE: MSI), with the money earmarked toward growing the company’s smart public safety solutions and services businesses. Silver Lake partners Egon Durban and Greg Mondre will join the Motorola Solutions board of directors. Read more.
VENTURE CAPITAL DEALS
• Tintri Inc., a Mountain View, Calif.-based provider of VM-aware storage for virtualization and cloud environments, has raised $125 million in Series F funding. Silver Lake Kraftwerk led the round, and was joined by return backers Insight Venture Partners, Lightspeed Ventures, Menlo Ventures and New Enterprise Associates. Read more.
• Fastly, a San Francisco-based provider of content delivery and acceleration solutions, has raised $75 million in Series D funding. Iconiq Capital led the round, and was joined by return backers Amplify Partners, August Capital, IDG Ventures and O’Reilly AlphaTech Ventures. The company has now raised a total of $130 million. Read more.
• Workfront, a Lehi, Utah-based provider of enterprise work management solutions, has raised $33 million in growth equity funding led by return backer JMI Equity. www.workfront.com
• LifeBond, an Israel-based developer of surgical sealants, has raised $27 million in Series D funding. Backers include Adams Street Partners, Sino Biopharmaceutical and return backers Pitango Venture Capital, Glenrock Israel and Zitelman Group. www.life-bond.com
• Snap Kitchen, an Austin, Texas-based retailer of freshly-prepared takeaway meals, has raised $22 million in new funding from return backers Catterton Partners and co-founder Bradley Radoff. The company also named David Kirchhoff, former CEO of Weight Watchers International, as its new CEO. www.snapkitchen.com
• CashStar, a Portland, Ore.-based provider of prepaid mobile and web commerce solutions for retailers and restaurants, has raised $15 million in Series D funding. FTV Capital led the round, and was joined by Mosaik Partners and return backers like Passport Capital, Intel Capital and North Hill Ventures. The company has now raised a total of $50 million. www.cashstar.com
• Leanplum, a San Francisco-based provider of mobile lifecycle marketing solutions, has raised $11.6 million in Series B funding. Kleiner Perkins Caufield & Byers led the round, and was joined by return backer Shasta Ventures. www.leanplum.com
• Amplitude, a San Francisco-based mobile analytics startup, has raised $9 million in Series A funding. Benchmark led the round, and was joined by Quest Venture Partners, Data Collective, Merus Capital and individual angels. Read more.
• AdtoApp, a Los Angeles-based programmatic mediation platform for in-app advertising, has raised $6 million in new VC funding from Run Capital. www.adtoapp.com
• Onstream, a Reno, Nev.-based device intelligence framework provider, has raised $2 million in funding from Traynor Family Enterprise. www.onstream.io
• Letstransport, an Indian provider of last-mile logistics solutions, has raised $1.3 million in VC funding led by Rebright Partners. Read more.
• Archilogic, a Zurich-based provider of 3D real estate marketing technology, has raised $1.5 million in new funding from angel investors and family offices. www.archlogic.com
PRIVATE EQUITY DEALS
• Maroon Group, an Avon, Ohio-based portfolio company of CI Capital Partners, has acquired D.B. Becker Co. Inc., a Clinton, N.J.-based distributor of specialty chemicals. No financial terms were disclosed. www.maroongroupllc.com
• Motion Solutions, an Aliso Viejo, Calif.-based portfolio company of North Branch Capital, has acquired certain assets of Specialty Motions Inc., a Corona, Calif.-based distributor of linear motion and motion control solutions. No financial terms were disclosed. www.motionsolutions.com
• Odyssey Investment Partners has agreed to acquire Integro Ltd., a New York-based insurance brokerage and risk management firm. No financial terms were disclosed. Integro was launched in 2005 after raising more than $300 million in funding from an investor group that included DLJ Merchant Banking Partners, Weston Presidio, GE Pension Trust, Highfields Capital Management, Leucadia National Corp., Cave Creek Capital Management, Century Capital Management, and Black Diamond Capital Partners www.integrogroup.com
• Rangeland Energy of Sugar Land, Texas, has secured a $300 million equity commitment from EnCap Flatrock Midstream for the formation of a new entity, Rangeland Energy III LLC, that will pursue new midstream opportunities in North America. www.rangelandenergy.com
• Red Bluff Resources Holdings has been formed via a $300 million equity commitment from Pine Brook, in order to acquire and develop onshore crude oil and natural gas reserves in the U.S. Mid-Continent and Permian basins. www.pinebrookpartners.com
• Gladstone Investment Corp. (Nasdaq: GAIN) has acquired GI Plastek, a Wolfeboro, N.H.-based provider of custom manufacturing solutions for low-pressure structural foam and injection molded products, from Wincove Capital. No financial terms were disclosed. www.giplastek.com
• The Service Companies, a Miami Lakes, Fla.-based portfolio company of Vision Capital and York Street Capital Partners, has acquired Acrobat Outsourcing, a San Francisco-based hospitality temporary staffing firm. No financial terms were disclosed. www.theservicecompanies.com
• Sunstar Insurance Group, a Memphis, Tenn.-based portfolio company of LNC Partners, has acquired W.E. Walker-Lakenan LLC, a Cape Girardeau, Mo.-based insurance brokerage. No financial terms were disclosed. www.wewalker.com
• Thoma Bravo has acquired iPipeline, an Exton, Pa.-based provider of cloud software to insurance carriers. No financial terms were disclosed. Sellers include Technology Crossover Ventures, NewSpring Capital and Volition Capital. No financial terms were disclosed, except that Golub Capital provided leveraged financing. www.ipipeline.com
• Virtium, a Rancho Santa Margarita, Calif.-based provider of industrial memory and embedded solid state drive products, has raised an undisclosed amount of growth equity funding from L Squared Capital Partners. www.virtium.com
• Vista Equity Partners has completed its previously-announced $350 million acquisition of Powerschool, a provider of back-office software to schools, from Pearson PLC (LSE: PSON). www.powerschool.com
• Amplify Snack Brands Inc., an Austin, Texas-based snack-maker whose brands include SkinnyPop, raised $270 million in its IPO. The company priced 15 million shares at $18 per share (above $14-$16 offering range), for an initial market cap of approximately $1.35 billion. It will trade on the NYSE under ticker symbol BETR, while Goldman Sachs, Jefferies and Credit Suisse served as lead underwriters. The company reports $4.9 million of net income on $44 million in revenue for Q1 2015. Shareholders include TA Associates. www.skinnypop.com
• Intec Pharma, an Israel-based developer of an oral drug delivery system for a Parkinson’s disease treatment, raised $30 million in its IPO. The pre-revenue company priced 5 million shares at $6 per share. It will trade on the Nasdaq under ticker symbol NTEC, and continue to trade in Tel Aviv under ticker symbol INTP. Maxim Group and Roth Capital served as underwriters. www.intecpharma.com
• Neiman Marcus Group Inc., a Dallas-based luxury retailer, has filed for a $100 million IPO (that figure is almost certainly a placeholder). No stock exchange or underwriters were listed. The company previously filed to return to the public markets in June 2013, but just months later agreed to be bought for $6 billion by Ares Management and the Canada Pension Plan Investment Board (sellers were TPG Capital and Warburg Pincus). Read more.
• Sunrun Inc., a San Francisco-based residential solar energy company with nearly 80,000 customers, raised $250.6 million in its IPO. The company priced at $14 per share (middle of $13-$15 offering range), for an initial market cap of around $1.36 billion. It will trade on the Nasdaq under ticker symbol RUN, while Credit Suisse, Goldman Sachs and Morgan Stanley served as lead underwriters. The company reports a $162.5 million net loss on around $198 million in 2014 revenue. Shareholders include Foundation Capital (19.6% pre-IPO stake), Accel Partners (13.2%), Canyon Partners (9.1%), Sequoia Capital (9%) and Madrone Partners (7.5%). www.sunrun.com
• Zynerba Pharmaceuticals Inc., a Devon, Penn.-based developer of synthetic cannabinoid therapeutics formulated for transdermal delivery, raised $42 million in its IPO. The company priced 3 million shares at $14 per share (middle of $13-$15 range), for an initial market cap of around $128 million. It will trade on the NYSE under ticker symbol ZYNE, while Jefferies and Piper Jaffray served as lead underwriters. www.zynerba.com
• Renewable Energy Group (Nasdaq: REGI) has agreed to acquire nearly all the assets of Imperium Renewables, a biodiesel producer that operates the Grays Harbor plant in Washington, for $32 million in cash and stock (plus up to $10 million in additional earn-outs). Imperium had raised more than $120 million in VC funding, from firms like BlackRock, Capricorn Investment Group, Nth Power, Silver Point Capital, RobescoSAM Private Equity, Ecofin Ltd., Attractor Investment Management, The Westly Group and Vulcan Capital. Read more.
• Baxalta (NYSE: BXLT) has rejected a $30.6 billion all-stock takeover offer from Shire PLC (Nasdaq: SHPG), saying that it “significantly undervalues” the company. The $45.23 per share offer represented a 36% premium over Monday’s closing price for Baxalta stock. Read more.
• Mediobanca (BIT: MB) has agreed to acquire a 51% stake in London-based asset management firm Cairn Capital from Royal Bank of Scotland (LSE: RBS). Read more.
• SurveyMonkey, a Palo Alto, Calif.-based provider of online survey solutions, has acquired TechValidate, an Emeryville, Calif.-based provider of marketing content automation software. No financial terms were disclosed. SurveyMonkey has raised more than $1 billion from firms like Bain Capital Ventures, Spectrum Equity, Google Capital, Morgan Stanley, T. Rowe Price and Tiger Global Management. Read more.
• Team Health Holdings (NYSE: TMH), a provider of provider of outsourced physician staffing solutions for U.S. hospitals, has agreed to acquire North Hollywood, Calif.-based IPC Healthcare (Nasdaq: IPCM), for $1.6 billion in cash. Read more.
FIRMS & FUNDS
• Castik Capital, a European private equity firm, has closed its debut fund with 1 billion in capital commitments. Castik’s three partners are Michael Phillips (ex-Apax), Marc-Oliver Jauch (ex-Apax) and Michael Gröber (ex-Montagu Private Equity). www.castik.lu
MOVING IN, UP, ON & OUT
• Robert Kennedy and Brien Wassner have joined Milbank, Tweed, Hadley & McCloy LLP as New York-based partners focused on M&A and private equity work. They previously were with Jones Day. www.milbank.com
• Lorenzo Levi has joined Apollo Global Management as a London-based operating partner. He previously spent more than 12 years with Terra Firma Capital Partners. www.agm.com
• Linus Liang has joined Signia Venture Partners as a senior associate. He previously was with Andreessen Horowitz and co-founded of infant incubator maker Embrace. www.signiaventurepartners.com
• Wolfgang Reitzle, former president and CEO of Linde AG, has joined Perella Weinberg Partners as an advisory partner. He currently serves as chairman of LafargeHolcim and chairman of the supervisory board of Continental AG. www.pwpartners.com
• Shasta Ventures has promoted Nikhil Basu Trivedi to principal. He joined the VC firm in 2012 as an associate. www.shastaventures.com
• Marc Unger has joined private equity firm Harvest Partners as chief financial officer. He previously was CFO and COO of CCMP Capital. www.harvestpartners.com
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