Term Sheet — Tuesday, August 2

Aug 02, 2016

Random Ramblings

This is Erin Griffith filling in for Dan while he’s on vacation. Send deal news and tips here. Feedback is welcome on Twitter.
• Sympathy for the Devil: Yesterday the New York Times published an article reads like a dystopian children’s book. It’s called “This Is Your Life, Brought to You by Private Equity.” It describes the various private-equity-backed businesses that the average American interacts with, with the intent to surprise people who might not have known that many companies providing basic services like water, infrastructure, 911 operators and garbage collection are now owned by private equity firms. The article includes scary facts like “Response times for some ambulance companies under private-equity control have worsened.”
Naturally, PE advocacy groups bemoaned the article’s lack of context. American Investment Council spokesman James Maloney issued a response: “This one-sided slideshow laments private equity's involvement in public services for the convenience of its narrative.”
There’s a reason the article lacks context. Private equity is not well-understood to the average person, and the minute you get into the weeds of leveraged loans and carried interest, you lose everyone. In 2007, when the SEIU was protesting carried interest, I distinctly remember that most of the protesters weren’t exactly clear on what carried interest was or why exactly it was so bad. It definitely felt really bad.
Consider the comedic lengths The Big Short went to in trying to simplify and explain the financial crisis to lay people, eight years after it happened. (Think Margot Robbie in a hot tub discussing the intricacies of sub-prime loans.) We live in an era of info-tainment. I think people want to understand, but it’s harder than ever to keep their attention and make them care. Double hard if you’re trying to gin up sympathy for a group of powerful, well-off people.
Moreover, private equity hasn’t helped itself over the years. Many firms prefer to avoid “telling their story,” so they’re perceived as shadowy slash and burn profit-mongers. The irony that those profits are, in theory, paid out to pensioners, is rarely mentioned.
The “private” part of private equity has changed a bit since the years I covered the industry. Most of the big firms are now publicly traded, Mitt Romney suddenly looks like a saint next to Trump, and some buyout firms are even active on Twitter. Yet those changes don’t seem to have changed the average person’s perception of the industry, as evidenced by the Times article.
Term Sheet readers, you are obviously biased, but I’m interested in hearing your reactions. Is private equity doomed to be forever misunderstood? Does it matter?
• You are not alone: Private equity isn’t the only industry with this perception problem. See the humorous “Your Facebook Life.” Another Facebook Day awaits! 
Alllies No More? As I noted yesterday, Uber’s sudden deal with its Chinese rival Didi Chuxing bodes poorly for the so-called “Anti-Uber Alliance” of global competitors. Didi, which has invested in Lyft, had agreed to share things like technology, local market knowledge, and business resources with Lyft, Ola and Grab.
My colleague Kia Kokalitcheva notes that the planned product integration between Lyft and Didi, where each company’s app works with the partner service in that region, is about halfway complete.
Lyft’s spokesperson said the company “will evaluate” its partnership with Didi. The company also couldn’t resist getting in a “toldja so” to Uber: “We always believed Didi had a big advantage in China because of the regulatory environment. The recent policy changes are exactly why we did not invest in the region.”

THE BIG DEAL

Emerson (NYSE: EMR) will sell Network Power, its network power business, to Platinum Equity and a group of co-investors. The transaction is valued at $4 billion and Emerson will retain a subordinated interest in Network Power. The sale of Network Power is expected to close by the end of the year. Separately, Emerson has agreed to sell itsmotors and drives unit to Nidec (NASDAQ:NNDNF), a Japanese motor manufacturer, for $1.2 billion.  www.emerson.com/en-us

VENTURE CAPITAL DEALS

• Diablo Technologies, San Jose, Calif.-based enterprise startup, raised $37 million across two phases of Series C financing. Genesis Capital and GII Tech Ventures invested alongside Battery Ventures, BDC Capital, Celtic House Venture Partners, Hasso Plattner Ventures and ICV. www.diablo-technologies.com/ 
Carousell, a Singapore-based listings app, raised $35 million in Series B funding from existing investor Rakuten Ventures, with participation from Sequoia Capital, Golden Gate Ventures and 500 Startups. carousell.com/
Glowforge, a Seattle-based 3D laser printer company, has raised $22 million in Series B funding. The round was led by Foundry Group and True Ventures. glowforge.com
CognitiveScale, an Austin, Texas-based provider of machine intelligence software, raised $21.8 million in venture financing co-led by Norwest Venture Partners and Intel Capital. www.cognitivescale.com 
Distil Networks, a San Francisco-based cybersecurity company, has raised $21 million in Series C funding from Silicon Valley Bank, Bessemer Venture Partners, Foundry Group and TechStars. www.distilnetworks.com/
Shipt, an online grocery marketplace based in Birmingham-Ala., has raised $20.1 million in Series A funding from Greycroft Partners, e.ventures, and Harbert Venture Partners. www.shipt.com
TruRating, a UK-based provider of customer feedback software, has raised $12.6 million in Series A funding led by Sandiare. www.trurating.com/en-us/home
3D Hubs, an Amsterdam-based marketplace for 3D printing, has raised $7 million in Series B funding led by EQT Ventures with participation from previous investor Balderton Capital. www.3dhubs.com/
Brave Software, the developer of an ad-blocking browser based in San Francisco, has raised $4.5 million in a seed round including Founders Fund's FF Angel, Propel Venture Partners, Pantera Capital, Foundation Capital, and Digital Currency Group. brave.com
Sensay, a Los Angeles-based AI and chat bot startup, raised $4.5 million in seed funding led by Norwest Venture Partners with participation from Greycroft Partners, Sweet Capital, NHN, Draper Associates and other existing investors. www.sensay.it/ 
ShareACamper, a Germany-based platform for renting motor homes, has raised $2.24 million in venture funding from unnamed investors from the tech and motor home industry, including German software development company Werkdigital, according to TechCrunch. Read more.
RightCapital, a New York-based financial planning platform for registered investment advisors and independent broker-dealers, has raised $1 million. Camellia Venture Capital led the round, which included Jac Herschler, Bruce Ferris and Chanjuan Pan. www.rightcapital.com

PRIVATE EQUITY DEALS

Five Crowns Capital has led a consortium to acquire Verrex, a provider of conferencing and presentation software based in Mountainside, N.J. Investors included Diamond State Ventures, Aavin Private Equity, MidStates Capital, and Enterprise Bank.
Z Capital Partners has made a bid to acquire Las Vegas-based casino company Affinity Gaming for $15 per share, valuing the company at more than $560 million. www.affinitygaming.com
Apax Partners, has completed its acquisition of a majority stake in Duck Creek Technologies, a provider of insurance software and services, from Accenture, which retains a 40% stake. Duck Creek Technologies also announced it has purchased Agencyport, a Boston-based company that connects insurance carriers and their agents, brokers, consumers and policyholders. www.duckcreek.com/ 
H.I.G. Capital has acquired Symplicity Corp, an Arlington, Va.-based provider of software to colleges that help manage student life on campus. No terms were disclosed. www.symplicity.com
Battery Ventures will acquire Bluepoint Solutions, a financial tech company based in Henderson, Nev. Battery plans to merge Bluepoint with Alogent, another fintech company it acquired in June. No terms were disclosed. www.bluepointsolutions.com
Edgenuity, a Scottsdale, Ariz.-based learning software company, has acquired Compass Learning, an Austin, Texas-based digital education software provider. Edgenuity is owned by Weld North Holdings, a KKR-backed company. Terms were not disclosed. compasslearning.com
PathGroup, a Brentwood, Tenn.-based provider of anatomic pathology and clinical lab service, has announced a recapitalization led by Pritzker Group Private Capital. Vesey Street Capital Partners and PathGroup management also invested. PathGroup was previously owned by Primus Capital. Terms were not disclosed. www.pathgroup.com/
Cirtec Medical, a portfolio company of Century Park Capital Partners, has acquired Stellar Technologies Inc., a Brooklyn Park, Minn.-based provider of precision machining, component manufacturing, and assembly services for medical devices. Terms were not disclosed. www.stellar-technologies.com/
WOW! Internet, Cable and Phone, a portfolio company of Avista Capital Partners and Crestview Partners, acquired NuLink, a Newnan, Ga.-based provider of high-speed Internet, digital cable TV, and phone services, from Halyard Capital. nulink.com/
Falfurrias Capital Partners, has purchased a controlling stake in Green Distribution, a maker of heat transfers and screen printed custom apparel based in Secaucus, N.J., and Gordonsville, Va. Terms were not disclosed. greendistro.com/
• TPG Capital announced it will acquire a majority stake in Transporeon, a logistics platform based in Ulm, Germany, from The Riverside Company and other shareholders. Terms were not disclosed. www.transporeon.com/us/

IPOs

Vista Equity Partners is planning an IPO for portfolio company Misys, a UK-based provider of financial software. The firm has hired Goldman Sachs, Bank of America, and JPMorgan Chase, according to Bloomberg. The deal could value Misys at $5 billion. Read more.

EXITS

Salesforce (NYSE:CRM) has acquired Quip, a San Francisco-based online word processing service, for $582 million. Salesforce was previously an investor in the startup through its venture fund, Salesforce Ventures. Other investors include Benchmark and Greylock Partners. Read more at Fortune.
Apollo Global Management (NASDAQ:APO) has acquired Maxim Crane Works, a specialized crane and lifting solutions provider based in Pittsburgh, Pa., from Platinum Equity. Terms were undisclosed. www.maximcrane.com/
SK Capital Partners, a private investment firm focused on the specialty materials, chemicals and healthcare sectors, has completed the sale of Calabrian, a Kingwood, Texas-based producer of liquid sulfur dioxide, to INEOS Enterprises. a subsidiary of INEOS Group. Terms were not disclosed. www.calabriancorp.com/
Great Hill Partners has entered into a definitive agreement to sell DealerRater, a Waltham, Mass.-based reviews site, to Cars.com, a subsidiary of Tegna Inc. (NYSE: TGNA). Terms of the transaction were not disclosed. www.dealerrater.com/
Macquarie Infrastructure Partners has acquired a 42.5% equity interest in InSite Wireless from Catalyst Investors and other minority investors. InSite, based in Alexandria, Va., owns, operates, and manages wireless telecommunications tower site facilities and distributed antenna systems. www.insitewireless.com/
IBM is in talks to acquire Revel Systems, a San Francisco-based provider of point-of-sale software, according to Bloomberg. Revel has raised more than $127 million in venture funding from DCM Ventures, Roth Capital Partners, Rothenberg Ventures, and Welsh, Carson, Anderson & Stowe, and was last valued at $500 million. Read more.

OTHER DEALS

AlliedBarton Security Services has merged with Universal Services of America. The company, which provides security technology solutions, is now operating under the Allied Universal brand and headquartered in Santa Ana, Calif., and Conshohocken, Pa. Wendel SE, which backs AlliedBarton, received approximately 33% of the shares of Allied Universal and $388 million in cash. www.aus.com
Emergency Communications Network, an Ormond Beach, Fla.-based emergency response alerting system, has bought MIR3, a San Diego, Calif.-based mass notification software for businesses, for an undisclosed amount. www.mir3.com
Ping Identity, a security company owned by Vista Equity Partners, has acquired UnboundID, an Austin, Texas-based provider of customer identity and access management software, for an undisclosed price. www.unboundid.com/
Blue Harvest Fisheries has acquired Hygrade Ocean Products Inc., a New Bedford, Mass.-based processor and distributor of scallops, cod, and other fish products. Blue Harvest is a portfolio company of Bregal Partners. www.hygradeoceanproducts.com/
Bharat Petroleum (NSE: BPCL), an Indian state-run oil refiner, is acquiring a 21% stake in payment technology provider FINO PayTech for $37.6 million in cash, according to VC Circle. Read more.
Salt Creek Capital has acquired Griplock Systems, a Carpinteria, Calif.-based provider of cable suspension hardware and low voltage systems used in lighting, retail display and signage. No terms were disclosed. www.griplocksystems.com/

FIRMS & FUNDS

Binary Capital, an early stage consumer tech VC firm based in San Francisco, has raised $175 million for its second fund, according to TechCrunch. Read more.
Boldstart Ventures, a New York City-based VC firm focused on tech startups, has raised $21.3 million for a new fund, according to a regulatory filing. www.boldstart.vc
CenterOak Partners, a Dallas-based private equity firm focused on making control-oriented investments in middle market companies, held a final close on CenterOak Equity Fund I, L.P. with $420 million in commitments. www.centeroakpartners.com/

MOVING IN, ON & UP

Brett Craig has been named a principal at Hidden Harbor Capital Partners, a private equity firm specializing in control investments in lower middle market companies based in Fort Lauderdale, Fla. www.hh-cp.com/
Mark McLaughlin has joined Housatonic Partners as a principal in its San Francisco office. McLaughlin formerly worked at Technology Crossover Ventures and TA Associates. SF office. www.housatonicpartners.com/
Michael Treskow has joined Eight Roads Ventures as a Partner in its London-based European team. He was previously at Accel. In addition, Vytautas Balsys has been promoted to vice president and Asheque Shams has been promoted to associate, both based in London. In China, the ventures team has welcomed Joe Chang as Partner, who previously worked at Softbank China Venture Capital. eightroads.com/en
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