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Term Sheet — Thursday, July 13

Jul 13, 2017

ET CETERA

Good morning. A few quick notes on the news:

JUST “NO”: The best part about Sun Valley is the photos of the one-percenter-tycoon-mogul-illuminati class’s off-duty mountain chic looks. The second best part is the deal rumors. The third best part is the flat denial of said deal rumors, especially perennial, stale ones like Verizon buying Disney.  (The only one more perennial and more stale is Apple buying Disney.) I thoroughly appreciate the Lowell McAdam here:

“No,” was his blunt response when peppered with questions. … McAdam didn’t even bother to walk over to the press. He gave a one-word answer and kept moving.

Disney CEO Bob Iger is not in attendance this year. But Jared Kushner and Ivanka Trump are, along with plenty of other dealmakers: Jeff Bewkes, John Malone, Mark Zuckerberg and Sheryl Sandberg, Jeff Bezos, the Murdochs, Tim Armstrong, Barry Diller, Mark Pincus, Satya Nadella, Evan Spiegel, Michael Lynton…

BUFFETT DON’T PLAY: Berkshire Hathaway isn’t known for raising its bids, negotiating, or generally messing around with M&A shenanigans. But a potential counter-bid from Elliott Management could force his hand in Berkshire’s massive deal for Oncor Electric Delivery. His choices are, according to Bloomberg: call Elliott’s bluff, or decide that the firm is an “inconsequential annoyance” and simply raise his offer.

CRYPTONERD STUFF: Cryptocurrencies are down 23% so far this month. Fortune’s Jeff John Roberts asks if this is the bottom:

Unlike earlier price jolts in the famously volatile digital currency market, there has been no obvious external shock—a major hacking incident or a regulatory crackdown—to explain the current decline.

As such, the dismal July may simply represent the deflating of a bubble inflated by lots of Johnny-come-lately speculators who rushed into the market in May and June. Now, some are suggesting that, in the case of Ethereum, the market has already hit bottom. (Read more.)

Meanwhile a new analyst report from Morgan Stanley is urging Bitcoin owners to sell. Lucinda Shen reports:

"Bitcoin acceptance is virtually zero and shrinking," the team of Morgan Stanley analysts led by James Faucette wrote. The [Bitcoin] ecosystem has focused more on value speculation rather than the foot leather-eating work of increasing acceptance," the team wrote, saying that that focus has made it "way easier to trade speculatively than convince new merchants to accept the cryptocurrency." (Read more.)

Meanwhile, in a sign of how ridiculous this market is getting, a pair of doofus photobombers appeared in the background during Janet Yellen’s televised Fed hearing to flash a legal pad that said “Buy Bitcoin.” Jen Wieczner has the video and more on the stunt, which managed to earn the guy $10,000, here.

ANOTHER ONE: Frank Artale has resigned from Ignition Partners, a Washington-based venture firm, after he was accused of “misconduct.” It is the second accusation against Artlal, the firm said. GeekWire has the full story here and Fortune has more here. This tells us:

  1. Firms are taking internal accusations seriously and releasing the information publicly, rather than waiting for them to come out in the press.
  2. That’s good! Now the general public is informed, rather than a vague “mutual decision” for a partner to leave, which would not prevent the perpetrators from continuing their behavior elsewhere.
  3.  And yet. Per Cheryl Yeoh’s “Black Box of Inappropriateness,” I wish there was more transparency about what kind of misconduct Artale was accused of. There is a big spectrum of bad behavior, from a sexist comment, which is just in poor taste, to sexual assault, which has legal consequences, and they should not all be lumped together in the so-called “black box.” The more specifically we can identify exactly what happened, the better off we are.

THE LATEST FROM FORTUNE...

• Why the PC market isn’t cratering like it once was.

• Meddling in the U.S. election is as easy as buying an online ad.

• Brazil’s former president sentenced to 10 years for corruption.

• Target says business is actually picking up.

…AND ELSEWHERE

Self-cooking ovens. On the road with Mark Zuckerberg. Bored traders on Tinder. The startup testing the power of brands. American tech companies are censoring themselves in India. Visa’s continued war on cash. The women companies call when they get serious about diversity. Bitly: A modest success for a company that once had much grander ambitions. SoundCloud seeking funding after layoffs. Populism won’t halt global M&A

VENTURE DEALS

Rover.com, a Seattle, Wash.-based network providing pet-sitting and dog-walking services, raised $65 million in funding. Spark Capital led the round, and were joined by Bespoke Strategies, StepStone Group, Madrona Venture Group, Menlo Ventures, Foundry Group, OMERS Ventures, and Technology Crossover Ventures. Read more at Fortune.

Segment, a San Francisco-based customer data platform, raised $64 million in Series C funding. Y Combinator Continuity Fund and GV led the round. Existing investors Accel, Thrive Capital, SV Angel, and NEA also participated.

Bitly, a New York-based link management platform, raised $63 million from Spectrum Equity.

Stash, a New York-based financial technology platform, raised $40 million in Series C funding. Coatue Management led the round, and was joined by investors including Breyer Capital, Goodwater Capital, and Valar Ventures.

Lightbend, a San Francisco, Calif.-based reactive application development platform, raised $15 million in funding. Investors include Bain Capital Ventures, Blue Cloud Ventures, IBM, Intel Capital, Juniper Ventures, and Shasta Ventures.

Quill, a London-based digital content production company, raised an undisclosed amount in funding, bringing the total funding raised to date to £10 million ($13 million). Investors include Smedvig Capital and Panoramic Growth Equity.

Plum, a Dania Beach, Fla.-based wine company, raised $9 million in Series A funding. Khosla Ventures led the round, and was joined by investors including Las Olas Venture Capital.

Applitools, a San Mateo, Calif. and Tel Aviv-based provider of cloud-based automated visual testing of web and mobile applications, raised $8 million in funding. Sierra Ventures led the round, and was joined by Bessemer Venture Partners, Magma Venture Partners, iAngels and La Maison.

OwnBackup, an Israel-based back-up service for SaaS applications, raised $7.5 million in Series B funding. Insight Venture Partners led the round. Existing investors Innovation Endeavors, Oryzn Capital and Salesforce Ventures participated.

Saucey, a Los Angeles-based alcohol delivery company, raised $5.4 million in Series A funding, according to TechCrunch. Bullpen Capital led the round, and was joined by investors including Blumberg Capital, Structure Capital and HashtagOne. Read more.

inXile Entertainment, a Newport Beach, Calif.-based videogame development studio, raised $4.5 million in funding from gumi VR Inc.

Entrupy, a New York City-based provider of technology for authenticating high-end luxury goods, raised $2.6 million in Series A funding. DG Lab Fund led the round.

Mendel.ai, a San Francisco-based artificial intelligence engine provider for the medical industry, raised $2 million in seed funding. DCM Ventures and Bootstrap Labs led the round, and were joined by Launch Capital, DeNa Strategic Investments, and Advisors Fund’s Mark Goldstein.

Zently, a Redwood City, Calif.-based rental space management startup, raised $1.6 million in funding, according to TechCrunch. Montage Ventures led the round. Read more.

HEALTH AND LIFE SCIENCES DEALS

Solera Health, a Phoenix, Ariz.-based provider of integrated chronic disease prevention services, raised $18.3 million in Series B funding. Adams Street Partners led the round, and was joined by Blue Cross Blue Shield Venture Partners, Sandbox Industries, and SJF Ventures.

PRIVATE EQUITY DEALS

Bain Capital will sell its controlling stake in RISE, a China-based education provider, at a valuation of about $1 billion, according to Bloomberg. Bain is also exploring a potential U.S. initial public offering for the company that could raise about $200 million. Read more.

Warburg Pincus invested $100 million in CleanMax Solar, an India-based rooftop solar developer, according to Bloomberg. Read more.

Alpenglow Rail, which is backed by Stonecourt Capital, acquired VIP Rail, a Canada-based short line rail business. Financial terms weren’t disclosed.

EMDs Inc., a Marlin Equity Partners-backed company that provides electronic health records and revenue cycle-management services to ambulatory care organizations, is exploring a sale of the business, according to the Wall Street Journal. Read more.

Apax Partners MidMarket acquired EPF Partners, a Paris-based private equity firm, according to Financial News. Financial terms weren’t disclosed. Read more. (subscription required)

Seacoast Capital invested $16 million in OnSSI, a Pearl River, N.Y.-based provider of IP-based video management software.

Vendavo, which is backed by Francisco Partners, acquired Endeavor Commerce, a Dallas-based provider of configuration software. Financial terms weren’t disclosed.

Viewpoint, a portfolio company of Bain Capital, agreed to acquire Dexter + Chaney, a Seattle, Wash.-based provider of enterprise resource planning software. Financial terms weren’t disclosed.

Wind River Environmental, a portfolio company of Gryphon Investors, acquired Drain Pro, a Milford, N.H.-based provider of plumbing, heating, drain cleaning, tank pumping and septic design and installation services. Financial terms weren’t disclosed.

ZZ Capital International Limited agreed to invest about 70 million euros ($80 million) in Building Energy, an Italy-based multitech power producer. ZZCI will be investing alongside Zhongzhi Capital, Synergo and Three Hill Capital Partners.

Teasdale Latin Foods, which is backed by Snow Phipps Group, acquired Rudy’s Tortillas, a Carrollton, Texas-based producer of tortillas and chips for the food service market. Financial terms weren’t disclosed.

Innova Capital acquired a majority stake in Proform sp. z.o.o., a Polish maker of office seats. Financial terms weren’t disclosed.

Kelso & Company acquired a “significant” stake in Oasis Outsourcing, a West Palm Beach, Fla.-based professional employer organization. Financial terms weren’t disclosed.

KEEN Growth Capital acquired a stake in The Jersey Tomato Co, a New Jersey-based maker of tomato sauces and salsas. Financial terms weren't disclosed.

KKR & Co LLP is in advanced talks to buy Envision Healthcare Corp's (NYSE:EVHC) ambulance business and merge it with Air Medical Group, a Lewisville, Texas-based medical helicopter operator it acquired two years ago, according to Reuters. Read more.

OTHER DEALS

Uber, a San Francisco-based ride-hailing tech company, and Yandex, a Russia-based Internet search engine agreed to merge their ride-sharing businesses in Russia and five neighboring markets. The companies will join forces to create a new company valued at $3.72 billion. Uber will invest $225 million and Yandex will invest $100 million into the new joint venture, in which Yandex will own 59.3%, Uber will hold 36.6%, and employees will have 4.1%. Read more at Fortune.

Global Logistic Properties Ltd (SGX:MC0) has picked a Chinese bidder consortium for final talks on a deal valuing the company at about $10 billion, according to Bloomberg. The consortium, which includes private equity firms Hillhouse Capital Management and Hopu Investment Management, is planning to offer around S$3 per share for GLP. Read more.

Qatar Airways said it will go ahead with plans to buy a stake in American Airlines Inc (Nasdaq:AAL) even though the U.S. carrier is ending their code-share agreement, according to Reuters. Read more.

Generali (BIG:G) has put its 44 billion euro ($50 billion) German life insurance portfolio up for sale as it restructures in Europe, according to Reuters. Read more.

• A group of investors led by Former Chicago Alderman Edwin Eisendrath purchased the Chicago Sun-Times, a Chicago-based newspaper publisher, according to Reuters. Read more.

Halcón Resources Corp (NYSE:HK) will sell most of its North Dakota operations for $1.4 billion in cash as part of a plan to shift its focus to Texas’ Permian Basin, according to Reuters. Read more.

REAN Cloud acquired 47Lining, a Niwot, Colo.-based big data solutions developer. Financial terms weren’t disclosed.

FirstLight, which is backed by Oak Hill Capital Partners, agreed to buy 186 Communications, a Nashua, N.H.-based fiber optic network operator. Financial terms weren’t disclosed.

MedPlast, Inc acquired Coastal Life Technologies, Inc, a San Antonio, Texas-based manufacturer of single-use disposable surgical devices.

IPOs

CEBA Midstream, an Oklahoma City-based MLP spun off of SandRidge Energy, withdrew its IPO for $100 million Wednesday. The company first filed for its IPO in 2014, and planned to list on the NYSE as “CEBA.” Bank of America Merrill Lynch and Barclays were named joint bookrunners at the time.

I-AM Capital Acquisition, an India-based SPAC filed for an IPO to raise up to $50 million in an initial public offering Wednesday. The company plans to offer 5 million shares at $10 a piece. I-AM plans to list on the Nasdaq as “IAMU.” Its IPO is being underwritten by Maxim Group. The company’s CEO, Jacob Cherian, was previously CEO of Millennium India until 2013.

RBB Bancorp, a bank based out of Los Angeles, set the terms of its IPO, saying it plans to raise $69 million in an offering of 3 million shares at a range of $22 to $24 a share. In 2016, the bank recorded loans of $1.1 billion. Sandler O’Neill, Keefe Bruyette and Woods, and Stephens are book-running managers. The company plans to list on the Nasdaq as “RBB.”

Co-Diagnostics, a microcap DNA and RNA diagnostic test maker based out of Salt Lake City, raised $7.1 million in an offering of 1.18 million shares priced at $6 a piece. That’s below the company’s previously stated range of $6.35 to $6.75 a share. In 2016, the biotech posted a loss of $1.9 million and has yet to generate significant sales. WallachBeth Capital and Network 1  Financial Securities are co-bookrunners in the deal. Legend Capital Group(13.1% pre-offering) and Reagents(19.8%) back the company. The company plans to list on the Nasdaq under “CODX.”

EXITS

J&F Investimentos sold its controlling stake in Alpargatas, the Brazil-based maker of Havaianas flip-flops, for $1.1 billion dollars. Cambuhy Investimentos Ltda., Itaúsa Investimentos and the fund Brasil Warrant will split J&F's 86% stake. Read more at Fortune.

Investcorp agreed to sell Esmalglass, a Spain-based supplier of intermediate products for the ceramic industry, to Lone Star Fund X for an enterprise value of 605 million euros ($693 million), according to Reuters. Read more.

Generation Growth Capital sold Innovative Laser Technologies Inc, a Minneapolis-based customized laser workstation designer, to IPG Photonics Corporation for $40 million in cash.

Carlyle Group LP agreed to sell BTI Studios, a Stockholm-based provider of dubbing and subtitling services for media companies, to Altor Equity Partners, according to the Wall Street Journal. Financial terms weren’t disclosed. Read more.

Digital Map Products Inc acquired DMTI Spatial Inc, a Canada-based provider of location-based big data, data visualization and analytics solutions, from Neopost Canada. Financial terms weren’t disclosed.

Coulton Creek Capital sold its stake in Punch Bowl Social, a Denver, Colo.-based restaurant and bar chain. Financial terms weren’t disclosed.

Drexel Metals, Inc, a Louisville, Ky.-based manufacturer of engineered metal roofing systems , has been acquired by Carlisle Construction Materials. The seller was Arborview Capital.

The Riverside Company sold its stake in DentalPlans.com, a Plantation, Fla.-based dental care plans provider. The buyer was not specified. Financial terms weren’t disclosed.

FIRMS + FUNDS

HarbourVest Partners, a Boston-based private equity firm, raised $1.75 billion for its fourth co-investment fund, HarbourVest Partners Co-Investment IV.

Brentwood Associates, a Los Angeles, Calif.-based private equity firm, raised $1.15 billion for its latest fund, Brentwood Associates Private Equity Fund VI.

Newbury Partners, a Stamford, Conn.-based investment firm, raised $1.11 billion for its latest fund, Newbury Equity Partners IV LP,  according to a filing with the Securities and Exchange Commission. The total offering amount is $1.25 billion.

NRD Capital Management, an Atlanta, Ga.-based private equity firm, raised $104.5 million for its second fund, NRD Partners II L.P.

PEOPLE

Revolution Growth added Todd Klein as a partner, promoted Steve Murray to a managing partner, named Evan Morgan as special partner, and hired Luisa Sucre as an analyst.

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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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