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Term Sheet — Wednesday, June 15

Jun 15, 2016

Random Ramblings

Some notes to kick off your Wednesday:

• One Jester's Lane: Publicly-listed retailer Bed Bath & Beyond yesterday announced an agreement to acquire One Kings Lane, a San Francisco-backed flash sales site for home and lifestyle merchandise. No financial terms were disclosed, except that the deal was all-cash.

One Kings Lane had raised around $230 million in total VC funding, most recently in early 2014 at a post-money valuation of around $812 million. But unless BBB is tying this acquisition to a new debt offering, there is no way that the sale price even approaches that VC valuation.

Bed Bath and Beyond had just about $600 million in cash ($515m) and short-term equivalents as of its last quarterly report. Or,m put another way, the discount must be even deeper than those '20% off' coupons from BBB that seem to singularly finance the U.S. postal system.

This isn't to say, however, that the VCs themselves might not be made whole. Each of the venture rounds were preferred stock with pari passu liquidation preferences, which effectively means the breaking point is $230 million. Company employees, however, are probably another story...

•   Well, that was unexpected: Dropbox CEO Drew Houston said yesterday at a Bloomberg conference that his company is cash-flow positive (albeit not yet profitable).

•  Court calendar: The legal dispute between former Sequoia Capital partner Michael Goguen and his former girlfriend Amber Baptiste is now scheduled to head to a jury trial at the beginning of May 2017.

•  More court: Andrew Casperson, the former PJT Partners and Blackstone Group placement agent accused in March of defrauding investors of $95 million, is claiming that his alleged malfeasance was the result of a gambling problem. Or, more specifically, a gambling problem that morphed into a trading addiction that led him to lose a whopping $123 million on S&P 'put' options.

Not only did he blow through money from his defrauded investors (which included a charitable foundation), but also his own personal fortune (he's a Wall Street scion) and money from the family of former girlfriend Cat McRae, who died in the 9/11 attacks on the World Trade Center.

Casperson is expected to plead guilty next month.

•  LP  note: Mark Boyle is retiring after 36 years helping to manage private equity investments for Northwestern Mutual. He'll leave a month-end, and says he is "looking forward to summer vacation here in beautiful Wisconsin." After that, it sounds like he's planning to remain involved in some capacity with private equity.

•   Today in Theranos: Ok, this wasn't really from today, but since I neglected to mention it last week... Adam McKay, whose past films have included The Big Short and Anchorman, is prepping a movie about the troubled blood-testing startup. Elizabeth Holmes reportedly will be played by Jennifer Lawrence. No, I'm really not making any of this up.

THE BIG DEAL

•  Uber reportedly has hired Morgan Stanley, Barclays, Citi and Goldman Sachs to offer up to $2 billion in leveraged loans to institutional investors. Read more.

VENTURE CAPITAL DEALS

•   Soundcloud, a Germany-based music streaming site, has raised $70 million in new VC funding from the investment arm of Twitter Inc. (NYSE: TWTR), as part of what Recode reports will be a $100 million round at around a $700 million valuation. Read more.

•   Allecra Therapeutics, a German developer of antibiotics to combat drug-resistant bacterial infections, has raised EUR 22 million in Series B funding. Delos Capital led the round, and was joined by return backers Forbion Capital Partners, Edmond de Rothschild Investment Partners and EMBL Ventures. www.allecra.com

•   Performance Horizon, a San Francisco-based provider of digital partner marketing solutions, has raised $15.4 million in Series C funding. Greycroft Growth led the round, and was joined by return backers Mithril Capital Management and DN Capital. www.performancehorizon.com

•   Lumus, an Israel-based maker of transparent near-to-eye displays for augmented and mixed reality, has raised $15 million in Series B funding from Shanda Group and Crystal-Optech. Read more.

•   Talkspace, a Pine Plains, N.Y.-based online communications platform that connects patients with mental health professionals, has raised $15 million in Series B funding. Norwest Venture Partners led the round, and was joined by return backers Spark Capital, SoftBank, Metamorphic Ventures and TheTime. www.talkspace.com

•   Yewno, a stealthy “knowledge discovery” startup, has raised $10 million in Series A funding from Pacific Capital. www.yewno.com

•   Felix & Paul Studios, a Montreal-based studio focused on cinematic virtual reality, has raised US$6.8 million in Series A funding. Comcast Ventures led the round, and was joined by Caisse de dépôt et placement du Québec, LDV Partners and return backer Phi Group. www.felixandpaul.com

•   B2X, a Munich-based provider of customer care solutions for smartphones and IoT devices, has raised EUR 6 million in new equity funding from Harbert European Growth Capital. www.b2x.com

•   Nuro Secure Messaging, an Israel-based secure group messaging and collaboration platform for enterprise, government and military clients, has raised $2.6 million in new VC funding. Backers include Erez Kreiner, former director of Israeli security in Europe and director of Israel’s National Cyber Security Authority. www.nuro.im

•   Nightswapping, a France-based peer-to-peer home-sharing platform, has raised EUR 2 million in second-round funding. Backers include BPI, 6ème Sens Participation and Le Groupe Financière Duval. Read more.

PRIVATE EQUITY DEALS

•   Geneva Glen Capital has acquired Dianne’s Fine Desserts, a Newburyport, Mass.-based provider of frozen thaw-and-serve desserts to the foodservice industry, from Superior Capital Partners. No financial terms were disclosed. www.diannesfinedesserts.com

•   Implus, a Durham, N.C.-based provider of athletic, fitness and outdoor accessories, has acquired MCN Solutions CC, a South Africa-based distributor of branded sporting products (including Implus products). No financial terms were disclosed. Implus is a portfolio company of Berkshire Partners. www.implus.com

•   KKR has agreed to acquire South Korean hypermarket chain Kim’s Club from E-Land for an undisclosed amount. www.kkr.com

•   Navicure, a Duluth, Ga.-based provider of cloud-based claims management and patient payment solutions for physician practices and hospitals, has agreed to an undisclosed amount of private equity investment from Bain Capital. www.navicure.com

IPOs

No IPO news this morning.

EXITS

•  Hearst Corp. has agreed to acquire a majority stake in MedHOK Inc., a Tampa, Fla.-based provider of SaaS solutions for health insurance plans. No financial terms were disclosed. MedHOK raised $77 million in 2014 from Bain Capital Ventures and Spectrum Equity. Read more. http://www.bizjournals.com/tampabay/news/2016/06/13/media-giant-strikes-deal-to-buy-majority-stake-in.html

•  North Castle Partners has sold Doctor’s Best Inc., a San Clemente, Calif.-based marketer and distributor of nutritional supplements, to Xiamen Kingdomway Group Co. (SHE: 002626). No financial terms were disclosed. www.drbvitamins.com

OTHER DEALS

•  Aveva Group PLC (LSE: AVV), a British industrial software company, said it has ended talks to be acquired by Schneider Electric (Paris: SU). .

•  Impact Radius, a Santa Barbara, Calif.-based digital marketing platform, has acquired Forensiq, a New York-based provider of online ad fraud monitoring solutions. No financial terms were disclosed. Impact Radius shareholders include Silversmith Capital Partners, Archer Capital and Redpoint Ventures. Read more.

•  Shari Redstone, the daughter of embattled media mogul Sumner Redstone, has spoken with Alibaba Group's Jack Ma about a possible sale of Paramount Pictures, according to the NY Post. Read more.

•  Steinhoff of South Africa (JSE: SNH) said that it is considering a takeover offer for British discount retailer Poundland (LSE: PLND). Read more.

•  Tribune Media (NYSE: TRCO) is seeking buyers for its digital and data business, with hopes of raising at least $800 million, according to Reuters. Read more.

FIRMS & FUNDS

•  Golden Gate Ventures, a VC firm focused on early-stage opportunities in Southeast Asia, has closed its second fund with $60 million in capital commitments. Limited partners include Temasek, Hanwha Life Insurance and Siam Commercial Bank. www.goldengate.vc

•  Hamilton Lane has closed a new strategic opportunities fund with more than $210 million in capital commitments. The fund is structured as an annual series with a single-year investment period, “focused on making credit-oriented investments with consistent cash yield.” www.hamiltonlane.com

•  Kelso & Co. has closed its ninth private equity fund with $2.56 billion in capital commitments. www.kelso.com

•  Lightspeed Venture Partners is raising up to $240 million for its third China-focused fund, according to a regulatory filing. www.lsvp.com

•  NBK Capital Partners of Dubai has closed its second mezzanine fund with $110 in capital commitments. It plans to focus on consumer-centric, middle-market companies in the MENA region. www.nbkcpartners.com

•  Waterton Global Resource Management Inc., a Toronto-based private equity firm focused on the metals and mining market, has closed its third fund with C$725 million in capital commitments. www.watertonglobalresource.com

MOVING IN, ON & UP

•   Gunit Chadha is stepping down as Deutsche Bank’s CEO of Asia-Pacific. No word yet on a successor. Read more.

•   Maximiliano Del Vento has joined Centerbridge Partners as a New York-based principal, according to his LinkedIn account. He previously was a VP with Partners Group. www.centerbridge.com

•   Ronald Frank has joined Blank Rome LLP as a Pittsburgh-based partner in the law firm’s corporate, M&A and securities practice. He previously was a partner with Reed Smith. www.blankrome.com

•   Jesal Jobalia has joined Madison Capital Funding as a director on the firm’s originations team. He previously was with Golub Capital. www.newyorklife.com/madisoncapitalfunding

•   Prashant Kolluri has joined Quest Partners, a quant hedge fund with $620 million in assets under management, as president. He previously was president and COO of Sterling Ridge Capital Management and, before that, was chief investment officer with Investcorp. Read more.

•   Stefan Krause, former CFO at Deutsche Bank, has joined Warburg Pincus as a senior advisor. Read more.

•   New Enterprise Associates has promoted Amit Mukherjee to principal, after joining the firm in 2012 to focus on consumer and internet investments. NEA also promoted Blake Wu to senior associate. www.nea.com

•   Tolga Sengel has joined Canada’s Public Sector Pension Investment Board as a London-based director, according to Dow Jones. She previously was an investment director with Bridgepoint. Read more.

•   David Scheible, former chairman and CEO of Graphic Packaging International (NYSE: GPK), has joined Clayton Dubilier & Rice as an operating advisor. www.cdr-inc.com

•   Trive Capital, a Dallas-based private equity firm, has promoted David Stinnett to partner. www.trivecapital.com

•   Zenefits, the HR software startup that has raised nearly $600 million in VC funding, is planning to lay off 106 employees, or 9% of its current workforce. In February, the companyu laid off 250 employees. Read more.

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