2016-12-07-1

Term Sheet — Wednesday, May 24

May 24, 2017

ET CETERA

Purse purgatory: We’ve written about Coach’s increasing interest in M&A before. Today Fortune’s Phil Wahba published a feature on the company’s turnaround. The relevant part for Term Sheet readers:

Coach itself has been the subject of takeover rumors, but in the past year executives have sent clear signals that they’d rather eat than be eaten. In April the company hired Joshua Schulman, ex-president of Bergdorf Goodman, to become CEO of the Coach brand starting in June—a clear signal that Coach Inc. is restructuring itself as more of a holding company. At different points, rumors flew that Coach was pursuing Burberry, Kate Spade, and shoemaker Jimmy Choo.

Ultimately, it was Kate Spade that looked most attractive. On the surface, the deal doesn’t diversify Coach’s product portfolio as much as, say, Burberry might have, since Kate Spade, too, is best known for handbags. But the smaller firm has well-developed product lines in shoes and apparel. As Luis points out, its buyers skew younger: 60% of Kate Spade customers are millennials, compared with less than 50% for Coach’s brand. And the acquisition will put Coach in better shape to compete with Kors, which is now having struggles of its own with the effects of overexpansion. Read the rest here.

Booze buyout: Yesterday CNBC’s Leslie Picker reported that alcohol company Constellation Brands has approached its $22 billion rival Brown-Forman about a potential buyout. The family-owned Brown-Forman is reportedly not interested in selling. A couple of notes:

• Brown-Forman has been controlled by its family (and, as such, rejected buyout offers) for five generations. Likewise Constellation -- its CEO and Chairman are from the Sands family which founded the company in the 1940’s.

• Brown-Forman is an attractive takeout option because of its industry-leading operating margins.

• Constellation is an active dealmaker. Last year the company paid $120 million for Charles Smith Wines, bought a minority stake in Bardstown Bourbon Company, paid $160 million for High West Distillery, paid $1 billion for craft brewer Ballast Point, bought The Prisoner Wine Company portfolio.

• As Bloomberg pointed out, Constellation’s CEO recently noted that the company has run out of large targets, especially in the spirits category – including some that are “simply not available at this point.” Ahem, Brown-Forman.

• Making the spurned offer public puts pressure on Brown-Forman to take the offer more seriously than it might have. But given the family ties on both sides of this potential tie-up, a merger of equals isn’t likely.

Long hold: The median time to exit for venture-backed companies is now 8.2 years for an IPO and five years for acquisitions, the highest level in a decade, according to Pitchbook. That’s making it hard for LPs:

Global VC contributions from 2012 through 2015 were the highest of any four-year period since 2002, with nearly $175 billion paid in. But the returns distributed from these contributions are lagging. The latest global net cash flow reports we looked at show VCs still owe $12.8 billion to their investors – and that’s just to break even.

Where are they now? Bre Pettis sold his 3d printing startup Makerbot to Stratasys for around $400 million million in 2013. In 2014 he left. Now, he has a new company called Bre & Co. that 3D prints “heirloom-quality products.” And he has personally acquired Other Machine Co., a Berkeley, Calif.-based and the maker of rapid prototyping tools. Given the hype and disappointment surrounding Makerbot’s ascent and eventual sale, it’s notable that Other Machine decided to purposely stay independent to avoid the pressures related to venture backing.

Where are they now? Nikesh Arora has been quiet since leaving SoftBank around a year ago. Now he’s blogging about unicorns. His message to entrepreneurs? “Focus on innovation, scale, and values.”

THE LATEST FROM FORTUNE...

• The iPhone decade.

• The Oval Office influence maze.

• Serena Williams joins SurveyMonkey’s board.

• TaskRabbit CEO joins Nordstrom’s board.

• Barnes & Noble’s new CEO defends physical retail stores.

• Uber underpaid its New York drivers.

• Amazon shareholder meeting takes a political turn.

…AND ELSEWHERE

Is Blackstone shovel-ready? How did our bosses gain so much power? The economic effects of Amazon’s banana stands. The quants run Wall Street now. Truckers feel like “throwaway people.” A more cuddly Uber CEO. Sheryl Sandberg’s impossible position. The Like button ruined the Internet.

VENTURE DEALS

Smartsheet, a Bellevue, Wash.-based SaaS work management and collaboration platform, raised $52.1 million in Series F funding at a reported pre-money valuation of $800 million. Insight Venture Partners led the round. Investors including Madrona Venture Group, Sutter Hill Ventures, and Summit Partners participated.

BounceX, a New York City-based provider of cloud behavioral marketing company, raised $31 million in funding. Investors include Silicon Valley Bank.

PolicyGenius, a New York City-based insurance brokerage service provider, raised a $30 million Series C funding. Norwest Venture Partners led the round, according to TechCrunch. Read more.

Unlockd, an Australia-based mobile telecommunications and digital ad-focused tech platform, raised $23 million in Series B funding. Axiata Digital led the round.

Quiqup, a London-based on-demand delivery startup, raised £20 million ($22.4 million) in Series B funding. Investors include JOBI Capital and Transmed.

DocPlanner, a Poland-based healthcare booking platform, raised €15 million ($17 million) in Series D funding. ENERN Investments led the round, and was joined by Target Global and One Peak Partners.

Zibby, a New York City-based lease-to-own payment company, raised $13.5 million in funding. CURO and MissionOG led the round, and were joined by investors including Blumberg Capital and Tribeca Venture Partners.

Ledger Holdings, the New York-based parent company of bitcoin options exchange LedgerX, raised $11.4 million in funding. Investors include Miami International Holdings and Huiyin Blockchain Venture Investments.

Chef'd, an El Segundo, Calif.-based home-delivery meal kit startup, raised $10 million in Series B funding from Campbell Soup. Investors in the round include Fresh Direct. Read more at Fortune.

T-REX Group, a New York City-based financial technology company, raised $10 million in funding. Safeguard Scientifics led the round, and was joined by innogy, the Partnership Fund for New York City, and Ecosystem Integrity Fund.

Circle Media, a Portland, Ore.-based connected home device management company, raised $10 million in Series A funding. Relay Ventures led the round.

Trove, a San Francisco-based provider of self-storage service provider, raised $8 million in Series A funding. Greylock Partners led the round.

Merlon Intelligence, a money laundering prevention platform, raised $7.65 million in seed funding, according to TechCrunch. Data Collective led the round. Read more.

Carpe Data, a Santa Barbara, Calif.-based provider of insurance data products, raised $6.6 million in Series A funding. Aquiline Technology Growth led the round.

Discuss.io, a Seattle-based market research platform, raised $5.025 million in Series A funding. Unilever Ventures and Pereg Ventures led the round.

Coins, a Philippines-based blockchain-enabled mobile payments platform, has raised $5 million in Series A funding from Naspers Ventures to expand their fast-growing, blockchain-based service across SE Asia.

Intelledox, a digitalization software company with locations in Australia and Dallas, raised A$4 million ($3 million) in funding from Ellerston Ventures.

SaveMoneyCutCarbon, a U.K.-based e-commerce platform and energy savings consultancy company, raised £2.2 million ($2.9 million) in funding from IW Capital.

Embrace.io, a Los Angeles-based software developer, raised $2.5 million in seed funding, according to TechCrunch. Eniac Ventures led the round, and was joined by investors including The Chernin Group, Techstars Ventures, and BoxGroup. Read more.

ECTOR Parking, a Paris-based valet parking startup, raised €2 million ($2.5 million) in funding, according to Tech.eu. Investors include ViaID, Day One Entrepreneurs & Partners, 123 Investment Managers, and bpifrance. Read more.

Bulletin, a New York-based shared retail space startup, raised $2.2 million in seed funding. Investors include Flybridge, Kleiner Perkins, Afore Ventures, and Y Combinator.

Bowery, a New York City-based commercial real estate appraisal firm, raised $1.75 million in seed funding. Camber Creek led the round, and was joined by Fika Ventures, Corigin Ventures, LeFrak and Expansion Venture Capital.

Meta SaaS, an Austin, Texas-based SaaS license management and analytics platform, raised $1.5 million in seed funding. Mark Cuban led the round, and was joined by investors including Barracuda Networks, and Brett Hurt.

Nomis Solutions, a San Bruno, Calif.-based price optimization SaaS platform, has raised funding of an undisclosed amount from Accenture.

HEALTH AND LIFE SCIENCES DEALS

CANbridge Life Sciences, a Beijing-based clinical-stage biopharmaceutical company, raised $25 million in Series B funding. Lapam Capital led the round, and was joined by Qiming Venture Partners, Yuanming Capital, Yanyuan Capital, Biossom Investment Management and Wuxi App Tec.

Scopio Labs, an Israel-based developer of an advanced digital microscopy and diagnostics platform, raised $2.5 million in funding from OurCrowd.

PRIVATE EQUITY DEALS

Silver Lake agreed to invest $400 million in Unity Technologies, a San Francisco-based gaming software maker, according to Bloomberg. The deal values the company at $2.6 billion. Read more.

FIS (NYSE:FIS) will sell 60% equity interest in its Capco business to Clayton, Dubilier & Rice for $477 million in cash.

Blue Water Energy has agreed to lead an investment of up to $300 million in Mime Petroleum, a Norway-based company focused on acquiring assets on the Norwegian Continental Shelf.

Geely (SEHK:175) will buy 49.9% of Proton, a Malaysian carmaker, from DRB-HICOM Bhd (KLSE:DRBHCOM), according to Reuters. Zhejiang Geely Holding Group Co, parent of Geely Automobile Holdings, will acquire 51% of Proton's stake in British carmaker Lotus. Read more.

Insignia Capital Group has acquired Tillamook Country Smoker, a Bay City, Ore.-based provider of branded meat snacks. Financial terms weren’t disclosed.

TA Associates will make an investment of an undisclosed amount in MRI Software, a Solon, Ohio-based provider of real estate software solutions.

YFM Equity Partners has made an investment of an undisclosed amount in TEV Limited, a U.K.-based maker of cooling, heating and refrigeration equipment.

Insight Venture Partners acquired Resolve Systems, an Irvine, Calif.-based provider of incident response and automation solutions for security, IT and network operations. Financial terms weren’t disclosed.

Apollo Global Management (NYSE:APO) is in advanced talks to acquire CareerBuilder, a Chicago-based job-hunting website, after negotiations with another buyout firm ended unsuccessfully, according to Reuters. Read more.

Sheridan Capital Partners made an investment of an undisclosed amount in Dermatologists of Central States, a Dayton, Ohio-based dermatology practice management company.

OTHER DEALS

SoftBank Group Corp. acquired a $4 billion stake in Nvidia Corp, a Santa Clara, Calif.-based visual computing company, according to Bloomberg. The deal could value the company at more than $80 billion. Read more.

CF Corp will buy Fidelity & Guaranty Life (NYSE:FGL), a Des Moines, Iowa-based annuities and life insurer, in an all-cash deal valued at about $1.84 billion, according to Reuters. The $31.10 per share offer represents a premium of about 8.4% to FGL’s closing price on May 23. Read more.

Microsoft (Nasdaq:MSFT) has agreed to acquire Hexadite, a Boston-based cybersecurity firm, for $100 million. Read more at Fortune.

Constellation Brands, the owner of Corona and Svedka Vodka, has made an offer to acquire Jack Daniel's owner Brown-Forman (NYSE:BF.B), according to CNBC. Brown-Forman reportedly said it was not interested in selling, but informed the board of Constellation Brands' interest. Read more.

UBS (SWX:UBSG) has agreed to acquire a majority stake in Consenso, a Sao Paulo, Brazil-based wealth management and multi-family office, according to Reuters. Read more.

ThinkMarkets acquired Trade Interceptor, a Bulgaria-based mobile trading analysis software company. Financial terms weren’t disclosed.

iManage acquired RAVN Systems, a U.K.-based natural language processing and AI company. Financial terms weren’t disclosed.

EXITS

DONG Energy (CPSE:DENERG), a Denmark-based utility and offshore wind farm developer, has agreed to sell its oil and gas business to petrochemicals firm Ineos for $1.3 billion, according to Reuters. Read more.

Rocket Internet, the Berlin-based e-commerce incubator, sold 51% of Namshi, a Dubai-based online retailer, to Emaar Malls for $151 million, according to TechCrunch. Read more.

Supercell has acquired 62% of Space Ape Games, a Waltham, Mass.-based mobile and tablet gaming company, for $55.8 million, according to TechCrunch. The deal values the company at $90 million. As part of the deal, Supercell is buying out stakes from previous investors, including Accel, Northzone, Initial Capital and Sega. Read more.

Great Hill Partners acquired PartsSource, an Aurora, Ohio-based provider of medical parts and supplies procurement solutions. The sellers include Ray Dalton, Polaris Partners and Primus Capital Fund. Financial terms weren’t disclosed.

FIRMS + FUNDS

LCN Capital Partners, a New York City-based real estate investment firm, raised more than $750 million for its second set of funds, LCN European Fund II and LCN North American Fund II. [This item has been updated to include the North American fund.]

Muzinich & Co, a New York City-based investment manager, raised 180 million euros ($201.4 million) for its pan-European private debt fund.

Morgan Stanley Investment Management, a New York City-based investment manager, raised more than $125 million for its first global impact fund of funds, PMF Integro Fund I.

Pentech, a U.K.-based venture capital firm, raised £88 million ($114 million) for its third fund, according to TechCrunch. Read more.

Osage Venture Partners, a Bala Cynwyd, Penn.-based venture capital firm, raised $90 million for its fourth fund, Osage Venture Partners IV.

GREE Ventures, a Singapore-based venture capital firm, raised $67 million fund for its second fund, AT-II, according to TechCrunch. Read more.

PEOPLE

Jon Ohrn joined LEERINK Partners as a managing director. Previously, Ohrn was at Deutsche Bank.

Todd Foreman joined SWaN & Legend Venture Partners as a managing director. Previously, Foreman was at UCG.

Laurence Goldberg joined Onex Corp as a managing director. Previously, Goldberg was at Barclays.

Rothschild Global Advisory hired Reza Vahabzadeh, Siddharth Hariharan, Aashis Mehta and Timothy Hotchandani as managing directors.

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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.

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