term sheet

March 18, 2016

Random Ramblings

Some items as we head into the weekend…

Circling the Square: Yesterday afternoon we reported that Union Square Ventures had raised $166.8 million for its fourth early-stage investment fund, according to a regulatory filing. This doesn’t quite appear to be a final close, but rather the institutional piece, with upcoming individual commitments bringing the total to $175 million. Two quick items that weren’t in our original post:

1. The SEC filing lists the same five general partners as were listed the last time around, but an LP tells me that there has been a switch when it comes to the “managing partner” roles. Rather than firm co-founders Brad Burnham and Fred Wilson, the managing partners are now Albert Wegner and Andy Weissman. Not terribly surprising, as Wilson had told me on stage earlier this year that USV was paying close attention to succession planning. “It basically means that if we need to talk or complain about something, we call Albert or Andy now” the LP says. “I think not being managing partner sounds like a better job.”

2. When USV raised its third early-stage fund in 2014, it was paired with a similar-sized “opportunity” fund for later-stage deals. But there is no sidecar being raised this time around, apparently because the existing vehicle has plenty of dry powder.

No comment on any of this from USV, natch.

Alt asset issue: As you might imagine, I’ve gotten a lot of emails this week about the Michael Goguen situation. Some of them believe Amber Baptiste, some of them believe Goguen and then there is a whole lot in between. But, as some of you have noted, Baptiste’s claims for breach of contract don’t only include lurid details of alleged sexual abuse. They also include an allegation that Goguen paid expenses for Baptiste via a bogus nonprofit.

From Baptiste’s complaint:

“In or around 2010, at Mr. Goguen’s request, Ms. Baptiste formed two companies to receive money from Mr. Goguen… Ms. Baptiste formed Je Ne Se Que Enterprises LLC and a charitable organization called Every Girl Counts. Mr. Goguen then wired money directly to these companies. On information and belief, the money was wired to the companies so that he could write off the money as ‘donations’ and keep it hidden from his wife. This money was paid to Ms. Baptiste to cover her general living expenses.”

Goguen does not address these allegations in his cross-complaint, but I’d have to imagine that the IRS might soon take an interest…

Still not easy: Staples and Office Depot will begin fighting for their merger in court next Monday, and today issued a letter saying that the Federal Trade Commission has “cherry picked a few facts to fit its narrative and support its case.”

It is highly unusual to beat the FTC in court on such things ― which is why acquirors rarely try ― but this is a case in which Staples CEO Ron Sargent has basically out his entire tenure on the line. And it should help that the deal has received regulatory approval elsewhere, not to mention that Staples has made significant divestiture offers. But, as a reminder, Staples itself is now worth just $1.1 billion more (including debt) than the value of Office Depot when the merger was originally announced more than a year ago.

Game Time: More than 1,400 Term Sheet readers are competing in our March Madness competition, which is easily a new record. And after the first day of games, we have a single leader: An account that goes by the name Hard Assets Only (IPP), which picked all 16 contests correctly. If that’s your account, be sure to let me know. And continued good luck to all…

 Have a great weekend!

THE BIG DEAL

 Starwood Hotels & Resorts (NYSE:HOT) has agreed to be acquired by China’s Anbang Insurance Group Co. for around $13.2 billion, or $78 per share, according to CNBC. Other members of the buying group include private equity firms J.C. Flowers and Primavera Capital. Starwood had agreed last November to be acquired by Marriott International (Nasdaq: MAR). Read more.

VENTURE CAPITAL DEALS

 Pieces Technologies, a Dallas-based health IT and data analytics startup that develops patient warning tools, has raised $21.6 million in Series A funding. Pacific Advantage Capital and Jump Capital co-led the round, and were joined by Children’s Health, the Order of Saint Francis Healthcare System and PCCI. www.piecestech.com

 Kenandy, a Redwood City, Calif.-based provider of enterprise resource planning solutions, has raised $11.5 million in new Series B funding. Backers include Kleiner Perkins Caufield & Buyers, Lightspeed Venture Partners, Salesforce Ventures and Wilson Sonsini Ventures. The company held a first close on the Series B round in 2013, and now has raised more than $55 million in total VC funding. www.kenandy.com

 HighGround, a Chicago-based cloud HR platform focused on company culture, has raised $7.6 million in new VC funding, according to an SEC filing. Existing backers include Lightbank. www.highground.com

 Cumulus Funding, a Chicago-based consumer finance startup that offers “income share agreements,” has raised $6 million in Series A funding. Continental Investors led the round, and was joined by HC Technologies, D-W Investments, Bridge Investments and Service Provider Capital. The company also secured $25 million in new debt financing commitments. www.cumulusfunding.com

 Playjam, a UK-based distributor of interactive content, has raised £1 million in VC funding from Gate Ventures. www.playjam.com

PRIVATE EQUITY DEALS

 Affinity Equity Partners and CVC Capital Partners have submitted takeover bids for South Korean parcel delivery company Logen Co Ltd., according to Korea Economic Daily. The company currently is owned by Baring Private Equity Asia, and also received first-round offers from Deutsche Post DHL Group and United Parcel Service (NYSE: UPS). www.ilogen.com

 Arsenal Capital Partners has acquired a majority stake in Pacific Urethanes LLC, an Ontario, Calif.-based developer of specialty polyurethane foam materials. www.pacurethanes.net

 The Blackstone Group is nearing an agreement to acquire a 60.5% stake in MphasiS, an India-listed provider of outsourced IT services, from Hewlett Packard Enterprise (NYSE: HPE), according to Reuters. The deal could be worth around $940 million. Read more.

 BioAgilytix, a Durham, N.C.-based provider of contract bioanalytical testing services, has acquired IPM Biotech, a German bioanalytical contract research laboratory focused on immunogenicity. No financial terms were disclosed. BioAgilytix is a portfolio company of The Riverside Company. www.bioagilytix.com

 Glenwood Private Equity (South Korea) has agreed to acquire South Korea-based Lafarge Halla Cement Corp. from LafargeHolcim Ltd. (Swiss: LHN) for approximately $542 million. Read more.

 Ministry Brands, a Lenoir City, Tenn.-based Christian software company backed by Providence Equity Partners and Genstar Capital, has acquired the faith division of Active Network, a Dallas-based portfolio company of Vista Equity Partners. No financial terms were disclosed. www.activenetwork.com

 The Riverside Company has agreed to acquire Guestline Ltd., a UK-based provider of cloud-based software to the hospitality sector. No financial terms were disclosed. www.guestline.com

IPOs

 Juwai.com, a China-based property search engine, said that it is planning an IPO by year-end or by early 2017. In the interim, the company reportedly is raising an undisclosed amount of private equity funding. Read more.

 Senseonics, a Germantown, Md.-based provider of glucose monitoring devices, raised $45 million in its IPO. The company priced 15.8 million shares at $2.85 per share, compared to plans to offer 18.2 million shares at between $3.10 and $3.50 per share. The company’s stock had been traded on the OTCQB under ticker symbol SENH, and it will relist on the NYSE MKT under symbol SENS. Leerink Partners and Canaccord Genuity served as lead underwriters. Senseonics had raised VC funding from such firms as New Enterprise Associates (33% pre-IPO stake), Delphi Ventures (13.4%), HealthCare Ventures (7.4%), Roche Finance (10.5%) and Energy Capital (9.9%). www.senseonics.com

EXITS

 Cerberus Capital Management has sold another 6% of the outstanding shares in Japanese rail and hotel operator Seibu (Tokyo: 9024), leaving it with around a 15% interest. Read more.

 iFood, a Brazilian-based food delivery company, has agreed to acquire SpoonRocket, a San Francisco-based healthy meal delivery startup that earlier this week announced that it would shut down. No financial terms were disclosed. SpoonRocket had raised $13.5 million in VC funding from firms like Foundation Capital, Sherpa Capital and Y Combinator. Read more.

 Kickstarter has acquired Drip, a Brooklyn-based online music community that had shut down last month. No financial terms were disclosed. Drip backers had included Brooklyn Bridge Ventures, Expa and Collaborative Fund. Read more.

 Norwest Equity Partners is considering a sale of Surgical Information Systems, an Alpharetta, Ga.-based provider of perioperative process software, according to LBO Wire. www.sisfirst.com

OTHER DEALS

 Bouygues Telecom is prepping a breakup that would reconfigure the French telecom market, according to the WSJ. Under terms of the proposed plan, Orange SA would purchase Bouygues Telecom for €10 billion in cash and stock, and then sell a “large part” of its fixed-line and mobile customers to SFR (a subsidiary of Altice) for upwards of €4 billion. Orange also would sell Bouygues Telecom’s spectrum, network and stores for just over €2 billion to Iliad SA. Read more.

 CK Hutchison (HK: 1) said that it may sell its minority equity stake in UK-based phone carrier Three. Proceeds would be used to help finance CK Hutchinson’s planned $15 billion purchase Three rival O2. Read more.

 Foodpanda, a food delivery service backed by Rocket Internet and Goldman Sachs, has acquired the Hong Kong business of Delivery.com for an undisclosed amount. Read more.

 IBM (NYSE: IBM) has acquired Optevia, a UK-based provider of CRM consulting solutions. No financial terms were disclosed. Read more.

 Primary Health Care (ASX: PRY) saw its shares climb more than 5% after it confirmed that Hong Kong-based Haitong Group had amassed a 5.78% equity stake. It is unclear if the purchase is designed to precipitate a takeover offer for the Australian medical services company, which now has a market cap of around A$1.9 billion. Read more.

 Tribune Publishing Co. (NYSE: TPUB) won an auction to purchase the Orange County Register and The Riverside Press-Enterprise newspapers for $56 million, but the U.S. Justice Department already has filed a lawsuit to block the deal on anti-trust grounds. Read more.

FIRMS & FUNDS

 ARCH Venture Partners is raising upwards of $400 million for its ninth life sciences-focused VC fund, according to a regulatory filing. www.archventure.com

 SV Angel is raising upwards of $46 million for its sixth fund, according to a regulatory fund. The only listed general partner is Topher Conway. www.svangel.com

MOVING IN, ON & UP

 Josh Green has joined Carbon3D Inc. as general counsel. He also will remain a managing director of Mohr Davidow Ventures. www.carbon3d.com

 Jeffrey Griffiths and Andrew Symons have joined private equity placement agency Campbell Luytens as a principal (London) and senior VP (New York), respectively. Griffiths previously was in the private fund group of Credit Suisse, while Symons was with Eaton Partners. www.campbell-lutyens.com

 John Kispertas has joined Black Diamond Ventures as a managing partner. He previously was CEO of Spansion. www.bdventures.com

 Jeff Williams has joined Bain Capital Ventures as an operating partner. He most recently served as senior VP of sales at FireEye (Nasdaq: FEYE). www.baincapitalventures.com

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