Term Sheet — Tuesday, September 27

Sep 27, 2016

Random Ramblings

Yesterday was consumed with charity softball and presidential debate coverage (i.e., not Term Sheet-type reporting), so just a few quick notes to kick off our Tuesday:

•  That's So Mavens: Yahoo has issued a statement claiming that an alleged hack from mid-summer is different than the hack of 500 million accounts it disclosed late last week. It's an important distinction, given the timing of its agreement to be acquired by Verizon.

Specifically, Yahoo says it "has never had reason to believe that there is any connection between the security issue disclosed yesterday and the claims publicized about a hacker in August 2016. Confusing the two events is inaccurate.”

Yahoo has declined, however, to say when it first learned of the confirmed hack (which took place in 2014), and Verizon has yet to issue any sort of re-commitment of support for the deal. In fact, AOL/Verizon's Tim Armstrong kept avoiding the issue during an interview yesterday morning on CNBC (including a direct question about price renegotiation).

•  On the docket: Khosla Ventures is suing SolarCity, claiming that Elon Musk's company stole intellectual property from a Khosla portfolio company called Cogenra Solar. Read more here. Also, VC-backed "unicorn" Palantir is being accused by the U.S. Labor Department of anti-Asian bias in its hiring practices. Read more.

 Coming attractions: Next Thursday (10/6) I'll be in New York City to moderate a lunch discussion about what the presidential election outcome will mean for the U.S. economy. On the Clinton "side" will be Ralph Schlosstein (president and CEO of Evercore Partners), while the Trump "side" will be represented by Peter Morici (economist and biz professor at University of Maryland).

It's being hosted by Edison Partners, and there are a very limited number of seats still available. If you are interested in joining us, please email Kelly Ford at kford@edisonpartners.com.

• Recommended reading: Keith Alexander profiled Vista Equity co-founder Robert Smith in this past weekend's Washington Post, as part of coverage of the Smithsonian's new National Museum of African American History and Culture (to which Smith donated $20 million, trailing only Oprah). Read it here.

• Quiz time: Can you name the Europe-based investor who was in Silicon Valley earlier this month, asking entrepreneurs to meet with him about possible expansion-stage deals. Not terribly unusual, except for the past where many early-stage VCs warned their portfolio companies to stay away.

• Gametime: Thanks to those who came out to Fenway yesterday, even though Term Sheet's team was not victorious. Wait 'till next year.

•  66k and counting ... Every time I add another thousand Twitter followers, I ask you to join the others so we can chat/argue/snark throughout the day. Follow me @danprimack.

THE BIG DEAL

 Steward Health Care System, a hospital chain owned by Cerberus Capital Management, has agreed to sell its real estate interests in nine acute care hospitals to Medical Properties Trust Inc. (NYSE: MPW), for $1.2 billion.

In addition, Medical Properties Trust will make a $50 million investment in Steward, and have the option to participate in future Steward hospital acquisitions. www.medicalpropertiestrust.com

VENTURE CAPITAL DEALS

•  Flexport, a San Francisco-based customs brokerage and freight forwarding service, has raised $65 million in Series B funding. Return backers included Founders Fund, Bloomberg Beta, Felicis Ventures, First Round Capital, Susa Ventures and Yuri Milner. New backer 8VC also participated. www.flexport.com

•  MicuRx Pharmaceuticals Inc., a Hayward, Calif.-based antibiotic drug developer, has raised $55 million in Series C funding. GP Healthcare Capital led the round, and was joined by GP TMT Capital, 3E Bioventures Capital and Delian Capital. www.micurx.com

•  Color Genomics, a Burlingame, Calif.-based personalized genomics startup, has raised $45 million in Series B funding. General Catalyst led the round, and was joined by Bono and return backers Susan Wagner, 8VC, Khosla Ventures and Emerson Collective. www.color.com

•  NS1, a New York-based provider of DNS and network traffic management solutions, has raised $20 million in Series B funding. Deutsche Telekom Capital Partners led the round, and was joined by Two Sigma Ventures and return backers Flybridge Capital Partners and Sigma Prime Ventures. www.ns1.com

•  Expel Inc., a McLean, Va.-based cybersecurity startup founded by FireEye/Mandiant veterans, has raised $7.5 million in Series A funding. Paladin Capital Group led the round, and was joined by NEA, Battery Ventures, Greycroft Partners and Lightbank.

•  Site 1001 Inc., a Kansas City-based developer of “smart” building maintenance and management software, has raised $5 million in Series A funding. JE Dunn led the round, and was joined by Flyover Capital, Tifec and Ward Ventures. www.site1001.com

•  Deepgram, a Menlo Park, Calif.-based audio search startup, has raised $1.8 million in funding co-led by Metamorphic Ventures and Y Combinator. Read more.

•  Qrvey, a McLean, Va.-based customer feedback platform, has raised $1.2 million in seed funding led by the Center for Innovative Technology. www.qrvey.com

•  Ofo, a Chinese bicycle-sharing platform, has raised “tens of millions of U.S. dollars” from Didi Chuxing. Read more.

PRIVATE EQUITY DEALS

•  Acorn Growth Companies has acquired Raisbeck Engineering Inc., a Seattle-based maker of performance improvement systems for commercial and general aviation aircraft. No financial terms were disclosed. www.Raisbeck.com

•  Aquiline Capital Partners has launched Togetherwork, a new holding company for businesses “developing software used to manage and collect payments from groups and organizations.” The new platform will include existing portfolio company OmegaFi. www.togetherwork.com

•  BV Investment Partners has sponsored a recapitalization of Right Networks, a Hudson, N.H.-based provider of cloud solutions to accountants and small and mid-sized businesses. No financial terms were disclosed. www.rightnetworks.com

•  The Carlyle Group has agreed to acquire a majority stake in Amrod, a South African maker of promotional products and clothing. No financial terms were disclosed for the deal, which is expected to close later this year. www.carlyle.com

•  MBK Partners has teamed with TPG Capital and Hong Kong Broadband Networks on a bid for the telecom unit of Wharf Holdings Ltd. (HK: 4), which could be worth more than $1 billion, according to The South China Morning Post. Read more.

•  Paine & Partners has agreed to acquire The Global ID Group, a Fairfield, Iowa-based provider of food safety and food quality solutions, from Inverness Graham Investments. No financial terms were disclosed. www.global-id-group.com

•  Polymer Solutions Group, a portfolio company of Arsenal Capital Partners, has acquired Alkon Solutions Ltd., a UK-based maker of anti-tack products for the rubber industry, from Stephenson Group Ltd. No financial terms were disclosed. www.arsenalcapital.com

•  Synergy Energy Holdings has agreed to acquire the artificial lift business of John Crane Group Ltd., a subsidiary of Smiths Group PLC (LSE: SMIN). No financial terms were disclosed. Synergy, which is doing the deal via its Endurance Lift Solutions unit, is owned by B29 Investments and Crestview Partners. www.crestview.com

IPOs

•  Advanced Disposal Services, a Ponte Vedra, Fla.-based waste collection company, has set its IPO terms to 19.25 million shares being offered at between $18 and $21 per share. It would have an initial market cap of around $1.63 billion, were it to price in the middle of its range. The company plans to trade on the NYSE under ticker symbol ADSW, with Deutsche Bank serving as left lead underwriter. ADS reports a $14 million net loss on $692 million in revenue for the first half of 2016. Shareholders include Highstar Capital (65.12% pre-IPO stake), the Canada Pension Plan Investment Board (23.14%) and BTG Pactual (7.17%). www.advanceddisposal.com

•  Aritzia Inc., a Vancouver-based women's fashion retailer owned by Berkshire Partners, raised C$400 million in its IPO. The company priced 25 million shares at C$16 per share (high end of C$14-C$16 range), for an initial market cap of around C$1.87 billion. It will trade on the Toronto Stock Exchange, while CIBC, BofA Merrill Lynch and TD Securities served as underwriters. www.aritzia.com

•  Obalon Therapeutics Inc., a Carlsbad, Calif.-based developer of a balloon-based weight loss device, has set its IPO terms to five million shares being offered at between $14 and $16 per share. It would have a fully-diluted market cap of around $267 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol OBLN, with UBS listed as left lead underwriter. Obalon has raised over $75 million in VC funding from firms like Domain Associates (34.6% pre-IPO stake), InterWest Partners (21%), Bader Sultan & Bros. (8.8%), Opaki Venture Capital (7.7%), Axon Ventures, Mirae Asset Venture Investment, NeoPlux Co. and Striker Asia Opportunities Fund. www.obalon.com

EXITS

•  Dalian Wanda is in talks to acquire a control stake in Dick Clark Productions, which puts on the Golden Globes and Miss America pageants, according to Reuters. Dick Clark Production currently is owned by Mandalay Sports Entertainment, Mosaic Media Investment Partners and Guggenheim Partners. Read more.

•  New Mountain Capital is considering a sale process for Information Resources Inc., a Chicago-based market research company that could be valued north of $2.5 billion, according to Bloomberg. Read more.

•  Rice Energy (NYSE: RICE) has agreed to acquire Vantage Energy, a Marcellus Shale driller, for around $2.7 billion (including debt). Sellers include Quantum Energy Partners, Riverstone Holdings and Lime Rock Partners. Read more.

OTHER DEALS

•  Diversified Search, a Philadelphia-based executive search firm, has acquired life sciences-focused search firm BioQuest for an undisclosed amount. www.diversifiedsearch.com

•  Uniqa, an Australian insurer, is planning to sell its Italian business, according to a local media report. The unit generated nearly €25 million in 2015 revenue. Read more.

FIRMS & FUNDS

•  Perry Capital is shutting down its flagship hedge fund after 28 years. Read more.

MOVING IN, ON & UP

•  Christopher Harned and Tim Fallon have joined Arbor Investments as a partner and senior operating partner, respectively. Harned previously was a managing director in the M&A group of Robert W. Baird & Co., while Fallon most recently served as CEO of Columbus Manufacturing. The firm also has promoted both Brody Lynn and Alan Weed to partner. www.arborpic.com

•  Horshav Patel has joined Stonepeak Infrastructure Partners as a vice president. He previously was with Warburg Pincus.

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