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2016-12-07-1

Term Sheet — Wednesday, April 19

Apr 19, 2017

M&A ACTION

Mega M&A: Verizon hasn’t exactly been on the sidelines when it comes to splashy M&A (Yahoo, AOL, Vessel, Fleetmatics…), but CEO Lowell McAdam may still be itching for something more. (Perhaps he hasn’t won enough awards lately?)

He told Bloomberg he’d be open to deal talks with Comcast, Disney, or CBS. Then he told CNBC he is not interested in a big cable merger right now: “We haven’t seen a willing seller and a willing buyer that have a meeting of the minds." Walt Piecyk, a BTIG analyst, tweeted: "The company without a strategy is willing to try anything"

Animal M&A: As Term Sheet noted yesterday, PetSmart has acquired online pet food company Chewy.com. Recode reports the price is $3.35 billion. (Not surprisingly, in Term Sheet’s conversations, buy-siders are playing down the price, and sell-siders are saying it’s higher, closer to $4 billion.) Chewy was a quiet growth story; the Florida-based company received barely any press in its five-year history. Last year, Bloomberg profiled the company, noting the unprofitable company was on track for $880 million in annual revenue. The company had raised $236 million in funding across five financings from BlackRock, T Rowe Price’s venture arm, Volition Capital, and Verlinvest. Two things:

1. PetSmart is PE-backed. A consortium led by BC Partners acquired the company in 2014 for $8.7 billion, which I believe is the largest take-private since the financial crisis. Ebitda growth rates tripled in the first year under BC; just ten months after the deal, BC took an $800 million dividend on the company without using debt.

2. As Recode notes, this is the biggest ever e-commerce acquisition. Chewy owns an estimated 51% of the U.S. e-commerce market for pet food, meaning it has out-competed Amazon, which bought Wag.com as part of its deal for Quidsi in 2011. That the largest ever e-commerce deal was done by a privately held traditional retailer is telling, and perhaps a cautionary tale to e-commerce startups with ballooning valuations. While everyone expects more old-school retailers to acquire their way into e-commerce capabilities and market share, I’m skeptical the publicly traded ones can afford – appearance-wise – to write checks that ostentatious.

Ticketing M&A: SeatGeek, the New York-based ticketing company, has acquired Israeli software company TopTix for $56 million, Fortune’s Polina Marinova reports:

Although [CEO Jack] Groetzinger said he had no intention to raise additional capital, that changed when the opportunity to buy TopTix came up. SeatGeek financed the purchase by raising $57 million in Series D funding. Glynn Capital led the round, and was joined by existing investors Accel, Causeway Media Partners, Haystack Partners, Mousse Partners, and Technology Crossover Ventures. More here.

Ad-tech M&A: In another exit for New York tech, Oracle acquired Moat, an ad measurement company. No word on the price, though Moat had raised more than $67 million in venture funding.

Digital Health Deal:  Benchmark Capital has invested $6.25 million into Solv Health, a startup that facilitates appointment booking for urgent care centers. It’s like OpenTable for urgent care, which makes sense why Bill Gurley, an early OpenTable investor, would back the company. Fortune's Leena Rao reports:

Gurley bets that this experience will be part of what he calls the “consumerization of healthcare.” “The healthcare provider needs to start acting like a business owner and caring about the customer experience,” said Gurley. “Attention to the customer experience by providers has been absent.” More here.

Oops: The $400 juicer which raised $118 million in funding from the likes of Kleiner Perkins and GV might not be so impressive, Bloomberg reports: Investors just found out they can make juice by squeezing the company’s produce packs with their hands, no $400 machine (already a drop from the original $700 price tag) required.

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VENTURE DEALS

BIMA, a Swedish insurtech company, raised $16.8 million in funding, according to Tech.eu. Axiata Digital led the round, and was joined by Kinnevik, Milicom, LeapFrog Investments, and Digicel. Read more.

SeatGeek, a New York-based online ticket marketplace, raised $57 million in Series D funding. Glynn Capital led the round, and was joined by Accel, Causeway Media Partners, Haystack Partners, Mousse Partners, and Technology Crossover Ventures. SeatGeek is using the majority of the funding to finance its acquisition of TopTix, an Israeli ticketing software company. Read more at Fortune.

Dome9 Security, a Mountain View, Calif. provider of cloud infrastructure security, raised $16.5 million in Series C funding. SoftBank (TSE:9984) led the round.

CLEAR, a New York biometric identity platform, raised $15 million from the New Horizon Fund.

Sapho, a San Bruno, Calif.-based provider of micro apps that aim to simplify workflows and data access, raised $14 million in Series B funding. Caffeinated Capital led the round.

V5 Systems, a Fremont, Calif. developer of self-powered computing and security platforms for the outdoors, raised $12 million in funding.

Mux, a San Francisco performance analytics provider for video developers and media publishers, raised $9 million in Series A funding. Accel led the round.

AppDetex, a Boise-based provider of online and mobile brand protection software, raised $5.5 million in funding. EPIC Ventures led the round, and was joined by Origin Ventures and existing investors.

Barnebys, a Stockholm online platform for hosting art, antiques, and collectibles auctions, raised $3.3 million in funding. Investors include Industrifonden, Howsat Venture Partners, Accum Kapital, and Kichi Invest.

Vizor, a virtual reality software company, raised $2.3 million in a seed funding. The Venture Reality Fund and Inventure led the round.

MortgageHippo, a Madison, Wis. provider of online mortgage services, raised $2.25 million in funding. CMFG Ventures led the round.

DadeSystems, a Miami developer of online payment processing software, raised $2 million in funding from Ocean Azul Partners, among other investors.

HEALTH AND LIFE SCIENCES DEALS

NeuroTronik, a Durham, N.C.-based developer of cardiac neurostimulation therapy, raised $23.1 million in Series B funding. Boston Scientific Group led the round, and was joined by Hatteras Venture Partners, Synergy Life Science Partners, Lord Baltimore Investment Partners, Mountain Group Capital, and Sovereign’s Capital.

Onkos Surgical, a Parsippany, N.J. medtech company focused on surgical oncology, raised $17.6 million in Series B funding. Canaan Partners led the round, and was joined by 1315 Capital and 3D Systems.

Bonti, a Newport Beach, Calif. clinical-stage biotechnology company, raised $11.7 million in Series B funding. Investors include RBV Capital, City Hill Ventures, and Colt Ventures, JMCR Partners, and HighLight Capital.

Synpromics, an Edinburgh developer of synthetic promoters to regulate gene expressions, raised £5.2 million ($6.7 million). Investors include Calculus Capital, the Scottish Investment Bank, the investment arm of Scottish Enterprise, and private shareholders.

Murj, a Santa Cruz, Calif. digital health company focused on streamlining care for patients with implantable cardiac devices, raised $4.5 million in Series A funding. True Ventures led the round, and was joined by Social Capital.

PRIVATE EQUITY DEALS

• A group of investors led by KKR (NYSE:KKR) raised its offer to $5.4 billion in its bid to acquire Tatts Group (ASX:TTS), according to Reuters. Read more.

The Dwyer Group, a portfolio company of The Riverside Company, has acquired Bright & Beautiful, a U.K.-based provider of home cleaning service. Financial terms weren’t disclosed.

MAG Aerospace, which is backed by the Clairvest Group, acquired Discovery Air Fire Services, a Canadian specialty aviation provider. Financial terms weren’t disclosed.

ConvergeOne, which is owned by Clearlake Capital, agreed to acquire Rockefeller Group Technology Solutions, a New York telecommunications and data services provider. Financial terms weren’t disclosed.

Platinum Equity agreed to acquire office products retailer OfficeMax’s Australia and New Zealand business from Office Depot (NASDAQ: ODP).

Black Bay Energy Capital invested in Downhole Chemical Solutions, a Texas-based provider of stimulation and completion chemical products and services to the oil and gas industry.

Warburg Pincus agreed to acquire a majority stake in CityMD, a New York-based provider of urgent medical care services. Terms weren’t disclosed, but media reports value the deal at around $600 million.

Platform Partners acquired Beneplace, an Austin, Texas employee voluntary benefits program operator.

OTHER DEALS

Akzo Nobel (ENXTAM:AKZA) outlined a plan to fend off a takeover from PPG Industries (NYSE:PPG), in which it will spin off its chemical business and pay shareholders €1.6 billion ($1.7 billion) in extra dividends. Read more at Fortune.

Microsoft (Nasdaq:MSFT) agreed to acquire Intentional Software, a Bellevue, Wash. software programming company. Terms weren’t disclosed. Read more at Fortune.

KAR Auction Services (NYSE:KAR) acquired Drivin, a startup using predictive data to make the online selling and buying of online cars more seamless, for $43 million.

Riverbed Technology agreed to acquire Xirrus, a Thousand Oaks, Calif. provider of wireless access network products and services. Xirrus raised more than $120 million in venture funding from backers including Canaan Partners, InterWest Partners, and August Capital.

Relias Learning, a provider of training management software, acquired Care Management Technologies, a Morrisville, N.C. provider of behavioral health analytics and decision support tools.

IPOS

Bright Scholar Education Holdings, a Foshan, China-based operator of international and bilingual schools in China, filed to raise up to $200 million in an initial public offering. The company plans to trade on the NYSE. Morgan Stanley and Deutsche Bank Securities serve as joint bookrunners on the deal.

EXITS

• An investor group led by Stone Point Capital and KKR (NYSE:KKR) agreed to acquire a majority stake in Focus Financial Partners, a New York-based wealth management firm, for around $2 billion. Sellers include Centerbridge Partners, Summit Partners, and Polaris Partners.

PetSmart, a Phoenix-based pet retail chain operator owned by a group of private equity investors led by BC Partner, agreed to acquire Chewy, a Dania Beach, Fla.-based online pet retailer. Chewy raised $15 million in venture funding from investors including Verlinvest and Volition Capital. Terms weren’t disclosed, but Recode valued the deal at $3.35 billion. Read more at Fortune.

Partners Group agreed to acquire UK-based Key Retirement Group, a U.K.-based provider of financial services for retirees, for more than £200 million ($256.7 million).

Webster Capital sold MooreCo International Holdings, a Temple, Texas developer of technology support equipment and office furniture, to Prudential Capital Partners.

FIRMS + FUNDS

Clayton Dubilier & Rice, a New York-based private equity firm, raised $10 billion for its tenth fund, Clayton Dubilier & Rice Fund X.

PEOPLE

Damon Krytzer joined Highland Capital Management as a managing director focused on institutional business development.

Craig Burel joined Reciprocal Ventures as a senior associate. Previously Burel was the head of revenue operations at FiscalNote.

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