term sheet

By Dan Primack
February 17, 2016

Random Ramblings

Some assorted notes to push us past the mid-week mark…

• Lucky sevens: Shamrock Capital Group today will announce that it has raised $700 million for its fourth flagship fund, which is a major jump from the $400 million it raised for Fund III back in 2011.

Steve Royer, a partner with the Los Angeles-based firm since 1998, says that the increase is not reflective of plans to do larger deals, but rather that Shamrock felt it had become over-reliant on co-investments. He also said that while Shamrock was originally founded as a family office for Roy E. Disney, there is no Disney money in the new fund. You can read more here.

• Recommended reading: Chris Douvos is one of the precious few limited partners who blogs about the industry, and he’s actually been doing so for a while. So long, in fact, that he has re-posted an open letter to founders that he originally wrote in the dark days of 2008. We’re not near that sort of Good times RIP trough, but Chris’ missive is still worth heeding. Check it out.

• Quick turnaround: Last month we noted that Josh Harris, co-founder of Apollo Global Management, said during the Wharton PE/VC Conference that “our entire private equity pipeline dried up.” More specifically, he said that the firm’s “huge pipeline going into the holiday period” was done in by financing markets “shutting down,” and that Apollo would respond by increasing its investments in distressed debt.

So I’m not quite sure what to make of the fact that Harris’ firm is the lead sponsor behind a pair of giant take-private LBOs announced since his speech: The $7 billion agreement to buy security company ADT Corp., and the $1.1 billion deal for University of Phoenix operator Apollo Education (which may be on the ropes, as the company’s lead shareholder just came out in opposition).

Were these deals not in that holiday pipeline? Has Apollo already changed its mind, or are these transactions (particularly ADT, which actually upgrades existing bondholders) just reflective of newfound PE acceptance that return expectations have been tempered? These aren’t rhetorical questions ― just ones floating around in my head this morning.

• Speaking of inconsistencies: Staples yesterday announced that it would sell around $550 million worth of large commercial contracts and related assets to Essendant Inc. (Nasdaq:ESND), in order to help gain regulatory approval for its pending merger with Office Depot (which is being opposed by the FTC on antitrust grounds). More specifically, the divestiture would only occur if the merger goes through.

I spoke yesterday with an Essendant spokesman, who said his understanding was the the deal represented the “entire wholesale” contract business of Staples and Office Depot. But in an earlier statement, Staples had said that it would agree to divest up to $1.25 billion in commercial contracts. Waiting on clarification from the Staples/Office Depot side. Perhaps the term “wholesale” is key…


THE BIG DEAL

• MindMaze, a Swiss developer of virtual reality systems that help stroke victims recover and retrain themselves, has raised $100 million in new VC funding at a $1.1 billion pre-money valuation. India’s Hinduja Group led the round. Read more.


VENTURE CAPITAL DEALS

• Giphy, a New York-based repository and search engine for animated GIFs, has raised $55 million in Series C funding at a reported $300 million post-money valuation. Lightspeed Venture Partners led the round, and was joined by return backers CAA, Betaworks, General Catalyst, RRE Ventures and Lerer Hippeau Ventures. Read more.

• Sprout Social, a Chicago-based provider of social media management software, has raised $42 million in Series C funding. Goldman Sachs led the round, and was joined by return backer NEA. Read more.

• Synlogic, a Cambridge, Mass.-based developer of medicines based on a synthetic biology and microbiome platform, has raised $40 million in Series B funding. OrbiMed led the round, and was joined by Deerfield Management and return backers Atlas Venture and NEA. www.synlogic.com

• Yello Mobile, a South Korean mobile Internet company, has raised $30 million from Japan’s SBI Holdings. Existing shareholders include Formation 8. The new deal came at a valuation of approximately $4 billion, according to TechCrunch. Read more.

• Cala Health, a Burlingame, Calif.-based neuroscience startup, has raised $18 million in VC funding, according to a regulatory filing. Backers include Johnson & Johnson Development Corp., Lux Capital, Google Ventures, Lightstone Ventures, DRX Capital and Action Potential Venture Capital. www.calahealth.com

• YouAppi, an Israel-based provider of mobile customer acquisition solutions, has raised $13.1 million in Series B funding. Hawk Ventures, Global Brain, Click Ventures, Digital Future, Emery Capital and Altair Capital were joined by return backers Glilot Capital Partners, 2B Angels and Flint Capital. www.youappi.com

• Rainforest QA, a San Francisco-based QA-as-a-service platform, has raised $12 million in Series A funding. Bessemer Venture Partners led the round, and was joined by Rincon Venture Partners, Industry Ventures and Marc Benioff. The company previously raised $4 million in seed funding from Storm Ventures, Rincon Venture Partners, Andreessen Horowitz, Morado Ventures and Crosslink. www.rainforestqa.com

• Bux, the maker of a casual stock and derivatives trading app, has raised $6.9 million in new VC funding led by Holtzbrinck Ventures. Read more.

• Qualia Media, a New York-based SaaS marketing platform designed to target audiences based on multiple “consumer intent” signals, has raised $5.5 million in Series B funding co-led by S3 Ventures and return backer Verizon Ventures. www.qualia-media.com

• ZeaKal, a San Diego-based biotech startup focused on improving agricultural productivity, has raised $5.3 million in Series B funding. Finistere Ventures led the round, and was joined by Middleland Capital. www.zeakal.com

• Hometeam, a New York-based provider of home care solutions to older adults, has raised $5 million in strategic funding from Kaiser Permanente, according to Fortune. Hometeam previously raised $38.5 million from firms like Oak HC/FT, Lux Capital, IA Ventures, and Recruit Strategic Partners. Read more.

• Grana, a Hong Kong-based online clothing retailer, has raised $3.5 million in seed funding. Golden Gate Ventures led the round, and was joined by MindWorks Ventures and Bluebell Group. www.grana.com

• AQ Metrics, a Dublin, Ireland-based provider of risk management, regulatory compliance and surveillance software, has raised $3.25 million in first-round funding from Frontline Ventures, Bluff Point Associates, and Enterprise Ireland. www.aqmetrics.com

• Gooten (f.k.a. Makeable), a New York-based provider of custom print fulfillment services, has raised $1.35 million in new funding form existing backers ff Venture Capital and KEC Ventures. The company also promoted Brian Rainey from CFO to CEO. www.gooten.com

• PokitDok Inc., a San Mateo, Calif.-based online health marketplace, has raised an undisclosed amount of strategic funding from McKersson Ventures. The company previously raised more than $38 million from firms like New Atlantic Ventures, Rogers Venture Partners, Lemhi Ventures and Subtraction Capital. www.pokitdot.com


PRIVATE EQUITY DEALS

• Alpha Private Equity has entered into exclusive talks to acquire French auto repair chain Feu Vert, according to Reuters. Sellers would include Qualium Investissement (65% stake) and the Monnoyeur Group (34%). Feu Vert generated around €677 million in 2014 revenue. Read more.

• Avenue Capital Group has acquired C.P. Crane LLC, owner and operator of a 399-MW coal-fired power plant near Baltimore, from Talen Energy Corp. (NYSE: TLN). No financial terms were disclosed. www.talenenergy.com

• The Blackstone Group has agreed to acquire a retirement village portfolio in New Zealand from Lendlease (ASX: LLC). No financial terms were disclosed. www.blackstone.com

• EQIS, a San Rafael, Calif.-based asset management platform, has raised $15 million in funding led by Long Ridge Equity Partners. www.eqis.com

• Fairchild Semiconductor International (Nasdaq: FCS) has rejected a $21.70 per share takeover offer — reported to be from China Resources Holdings Co. and Hua Capital Management — in favor of a $20 per share bid from ON Semiconductor (Nasdaq: ON). Part of Fairchild’s explanation for taking the lower price was a concern over U.S. regulatory approval. Read more.

• Keais Records Service, a Houston-based portfolio company of The CapStreet Group, has acquired LegalPartners LP, a Houston-based provider of document retrieval and court reporting services. No financial terms were disclosed. www.keais.com

• MW Industries, a Genstar Capital-backed provider of precision components, has acquired USA Fasteners Inc., a Houston-based manufacturer of fasteners. Financial terms were not disclosed. www.md-ind.com

• Olympus Partners has acquired G.E.T. Enterprises, a Houston-based provider of alternative tabletop solutions to the foodservices industry. No financial terms were disclosed. Sellers include ShoreView Industries and Valesco Industries. www.get-melamine.com

• Schroders PLC said that it will oppose a proposed $1.1 billion private equity takeover of Apollo Education Group (Nasdaq: APOL), in which it is the largest shareholder with a 13.73% stake. Read more.

• StoneEagle Services, a Richardson, Texas-based B2B payments platform, has raised $76 million in equity funding led by FTV Capital. www.vpayusa.com


IPOs

 No IPO news this morning.


EXITS

• MBK Partners has hired Morgan Stanley to find a buyer for ING Life Korea, according to the Korea Economic Daily. The deal could be valued at more than $1.6 billion. MBK acquired the business from ING Groep in 2013. Read more.

• SAP (NYSE: SAP) has acquired the assets of Roambi, a Solana Beach, Calif.-based provider of mobile reporting and analytics solutions. No financial terms were disclosed. Roambi had raised around $50 million from firms like Sequoia Capital. www.sap.com


OTHER DEALS

• Amazon (Nasdaq: AMZN) has agreed to acquire Emvantage, an Indian online payment gateway, for an undisclosed amount. Read more.

• Azko Nobel (Amsterdam: AKZO) has agreed to acquire the industrial coatings business of BASF (DE: BASFn) for €475 million. Read more.

• CensorNet, a British cloud security company backed by Talis Ventures, has acquired SMS Passcode, a Denmark-based mutli-factor authentication vendor. No financial terms were disclosed. www.censornet.com

• Fosun International (HK: 656) has withdrawn a $460 million takeover offer for Israel-based insurance company Phoenix Holdings (TASE: PHOE). The deal had been delayed by Israeli regulators who were concerned about a Chinese investigation that involved Fosun’s billionaire founder. Read more.


FIRMS & FUNDS

• Ecosystem Investment Partners, a Baltimore-based private equity firm focused on the land-based environmental offset market, has closed its third fund with $303 million in capital commitments. Monument Group served as placement agent. www.ecosystempartners.com

• Shamrock Capital Advisors, a Los Angeles-based private equity firm focused on the media, entertainment and communications markets, has closed its fourth fund with $700 million in capital commitments. Read more.


MOVING IN, ON & UP

• Donald Allen has joined Summit Partners as director of portfolio technology. He previously was director of technical operations at e-commerce site Zulily. www.summitpartners.com

• Greg Baty has joined Miami-based private equity firm Trivest Partners as a partner. He previously was a principal with Hamilton Lane. www.trivest.com

• Adam Berg, former CEO of Arvato AG, has joined General Atlantic as a Munich-based operating partner. www.generalatlantic.com

• David Gill has joined JPMorgan Chase & Co. as a managing director in the firm’s financial sponsors group. He previously was with advisory firm Three Ocean Partners. Read more.

• Renée James, former president of Intel Corp., has joined The Carlyle Group as an operating partner focused on the global telecom, media and tech sectors. www.carlyle.com

• Noa Simons has joined the Hudson Valley Startup Fund as a manager. She previously was a partner with TianDi Growth Capital. www.hvstartupfund.com

• Sing Wang has joined China Minsheng Financial Holdings (HK: 245) as CEO. He previously was a senior advisor to TPG Capital, after having previously served as the firm’s co-chairman of Greater China and head of TPG Growth Fund efforts in North Asia. Read more.

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