All of today's deal and deal-maker news.
Deepest sympathies, sadness and rage.
Now moving on to decidedly less important stuff.
• Markdown context: Last week I detailed Fidelity’s markdowns of its recent investments in privately-held companies like Blue Bottle, Snapchat and Zenefits. Then, on Friday afternoon, I posted a longer piece about why it all matters. You can read it here.
For those who don’t want to click, here is the very quick version: For Fidelity, these markdowns may cause problems when trying to get into future deals. In fact, some Fidelity portfolio managers called up venture capitalists last week, to better gauge their reputational damage. For VCs, this could cause some major LP questions about where they’re holding portfolio companies, just as quarterlies are being finalized. If carrying at the most recent valuation, what do they know that Fidelity doesn’t? For entrepreneurs at the marked-down companies, this could be a major blow to employee morale, but also might provide an excuse to lower 409A valuations. Again, I encourage you to read the full piece here.
• Two more Fidelity notes: (1) There had been talk earlier this year about how Snapchat had raised “common stock” in its latest private financing round. But, as the Fidelity docs suggest and state certificates confirm, the securities were actually were preferred. Yes, very bland (no participation right, liquidation preferences, etc.), but technically preferred. (2) It’s worth noting that not all VCs have been marking up their portfolio companies to match unicorn rounds. Per an LP, one major Snapchat investor actually has been carrying the company below where Fidelity marked it down to. Moreover, a major Square investor has been carrying that company below the mid-point of its IPO price range (which would be below the company’s last private round valuation).
• New firm alert: Bold Capital Partners has quietly launched as a venture capital firm focused on companies that promise “exponential transformation.” Not a terribly surprising mission, given that one of the firm’s general partners is X Prize creator Peter Diamandis.
Other partners include: Monitor Ventures co-founders Neal Bhadkamkar and Teymour Boutros-Ghali; and Emilio Barroso, founder and co-chairman of NALA Investments. According to a regulatory filing, Bold Capital Partners is seeking upwards of $200 million for its debut fund.
• Take off: Huntsman Family Investments last night announced that it has agreed to acquire the specialty chemicals division of American Pacific Corp. from H.I.G. Capital for an undisclosed amount (although it appears to be well into 9 figures, based on the debt syndication ask).
Two notes on this: (1) This is the first private equity deal from HFI, which is the family office of Utah chemicals billionaire Jon Huntsman Sr. (who previously co-founded what is now known as HGGC, where he is no longer involved). The office’s plan is to lead private equity deals within the chemicals space, and to solicit other family offices as co-investors. In other sectors, it plans to act as a co-investor. (2) The actual asset is the sole producer of rocket propellant for U.S. Department of Defense missiles. Expect it to serve as an M&A platform going forward.
THE BIG DEAL
• Marriott International (Nasdaq: MAR) has agreed to acquire Starwood Hotels & Resorts Worldwide (NYSE: HOT), in a $12.2 billion cash and stock deal that would create the world’s largest hotel operator.
The $72.08 per share value to be received by Starwood holders is lower than the hotelier’s $75 per share closing price last Friday, but does not include around $7.80 per share in value that is expected via a simultaneous spin-off of Starwood’s timeshare business and subsequent merger with Interval Leisure Group (Nasdaq: IILG). No word on how much the combined company plans to save by simply flipping over the signs at Starwood’s W Hotels chain… Read more.
VENTURE CAPITAL DEALS
• Avedro Inc., a Waltham, Mass.-based ophthalmic drug and medical device company that leverages corneal cross-linking and refractive correction, has raised $32 million in new equity funding co-led by InterWest Partners and OrbiMed Advisors. www.avedro.com
• LoveCrafts, a London-based online crafting community and marketplace, has raised $20 million in Series B funding. Highland Europe led the round, and was joined by return backer Balderton Capital. Read more.
• PatientPing, a Boston-based network of healthcare facilities that enables patient information sharing, has raised $9.6 million in Series A funding. Google Ventures and FPrime Capital co-led the round, and were joined by First Round Capital and SV Angel. Read more.
• Ovizio Imaging Systems, a Belgium-based developer of cell counting solutions based on quantitative microscopy, has raised €8 million in VC funding. New Science Ventures and an undisclosed U.S. investor co-led the round, and were joined by Qbic and Nausicaa Ventures. www.ovizio.com
• Mavrck, a Boston-based “micro-influencer marketing platform for premier brands,” has raised $5 million in VC funding from Kepha Partners and GrandBanks Capital. www.mavrck.co
• Ample Hills Creamery, a Brooklyn, N.Y.-based ice cream maker, has raised $4 million in equity funding. Brooklyn Bridge Ventures led the round, and was joined by Lerer Hippeau, Red Sea Ventures and individual angels. www.amplehills.com
• CashKaro, an Indian cashback and coupon site, has raised $3.8 million in Series A funding from Kalaari Capital. Read more.
PRIVATE EQUITY DEALS
• Bernhard Capital Partners has acquired ATC Associates Inc., a Lafayette, La.-based purchased environmental consulting, industrial hygiene and engineering firm, from Australia’s Cardno Ltd. (ASX: CDD). www.bernhardcapital.com
• The Canada Pension Plan Investment Board, the Ontario Municipal Employees Retirement System and the Ontario Teachers’ Pension Plan have agreed to acquire Skyway Concession Co., operator of the Chicago Skyway toll road, from Macquarie Group (Australia) and Ferrovial SA (Spain). The deal is valued at around $2.84 billion. Read more.
• Goldman Sachs and Thomas H. Lee Partners have agreed to acquire Cleveland-based facility management company GCA Services Group Inc. from The Blackstone Group for around $1 billion, according to Reuters. Read more.
• Confie Seguros, a personal insurance company focused on Hispanic consumers, has acquired California Insurance Specialists, a Santa Ana, Calif.-based provider of homeowners and auto insurance. No financial terms were disclosed. Confie Seguros is a portfolio company of ABRY Partners. www.confieseguros.com
• Cortec Group has acquired a majority stake in Community Veterinary Partners LLC, a Philadelphia-based veterinary services company. No financial terms were disclosed. Sellers include MDM Equity Partners. www.cvpco.com
• Signostics, an Australian developer of miniaturized ultrasound technology, has raised US$35 million in equity funding from KKR. www.signosticsmedical.com
• Dali Foods, a Chinese snack and beverages group partially owned by CDH Investments, raised $1.15 billion in a Hong Kong IPO. It priced shares at HK$5.25 per share (compared to HK$5-HK$6.15 range), with BoA Merill Lynch and Morgan Stanley serving as lead underwriters. Read more.
• Mesoblast, an Australian regenerative medicine company that already trades on the ASX, raised $60 million in its U.S. IPO. The company priced 7.5 million shares at $8 per share (below anticipated $12.10 per share price), and will trade on the Nasdaq under ticker symbol MESO. J.P. Morgan and Credit Suisse served as lead underwriters. www.mesoblast.com
• ThinkingPhones, a Cambridge, Mass.-based provider of unified communications as a service, has acquired Fuze, a San Francisco-based cloud-based videoconferencing company. No financial terms were disclosed. ThinkingPhones has raised over $85 million in VC funding from firms like ATV, Technology Crossover Ventures and Bessemer Venture Partners. Fuze had raised over $60 million from Index Ventures, Hermes Growth Partners, Insight Venture Partners and Khosla Ventures. www.thinkingphones.com
• TSG Consumer Partners has agreed to sell ThinkThin, a Los Angeles-based maker of “wholesome protein-rich foods,” to Glanbia PLC (ISE: GL9). No financial terms were disclosed. www.thinkproducts.com
• BeIN Media Group, a Qatar-based broadcaster, is in exclusive talks to acquire film company Miramax, according to Bloomberg. Read more.
• Intercontinental Exchange (NYSE: ICE) has agreed to acquire Trayport, a London-based provider of electronic trading systems and matching engine solutions, from GFI Group for $650 million in stock. www.trayport.com
FIRMS & FUNDS
• Snow Phipps, a New York-based middle-market private equity firm, is raising its third fund, according to a regulatory filing. It closed its second fund in 2009 with around $845 million in capital commitments. www.snowphipps.com
• TPG Capital “has placed certain employees of its Beijing office on paid leave while it investigates U.S. allegations of insider trading by a former employee,” according to the WSJ. Read more.
MOVING IN, UP, ON & OUT
• Tanya Carmichael of the Ontario Teachers’ Pension Plan has been appointed chair of the board of directors at the Institutional Limited Partners Association (ILPA). www.ilpa.org
• Leif Lindbäck has stepped down as a partner with London-based private equity firm Charterhouse, in order to join Letter One Technology, an investment firm formed by Russian billionaires Mikhail Fridman and German Khan, according to Private Equity International.
• Lux Capital has promoted Adam Goulburn to partner. He has led such deals as Hometeam, Pager, Science 37, 3Scan and Aptible. Prior to joining Lux in 2011, Goulburn received his PhD in neuroscience from Weill Cornell Medical College. www.luxcapital.com
• Gary Steinberg, former chief investment officer of the International Monetary Fund, is joining Nigerian private equity firm CBO Investment Management as a member of the investment committee and head of the advisory board. www.cboim.com
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