Random Ramblings
This morning’s column didn’t come together in time, so just a few very quick notes to kick off your Monday:
• Today’s big deal is that Wayfair, an e-commerce company focused on the home furnishings space, has filed for a $350 million IPO.
Three quick reasons why it’s particularly notable: (1) Boston is desperate for a big tech startup win, and this should be it. It’s not the type of ‘hard’ tech for which the city is typically known, but it should be large enough to eventually create secondary effects like wealthy angel investors and entrepreneurial engineer spinouts. (2) It’s very rare for there to be an ecommerce company on track to top $1 billion in revenue that few people seem to have heard of. In fact, when I bring up Wayfair outside of Boston, most often I get blank stares. (3) The company has raised nearly $370 million in VC funding, but its largest shareholders remain co-founders Niraj Shah (CEO) and Steven Conine (CTO).
• Recommended reading: Interesting backgrounder from Dan Dunkley on the impending demise of British mid-market buyout firm Gresham Private Equity. Read it here.
• Deal data: There has been nearly $168 billion in global tech M&A activity (announced & closed) so far in 2014, according to Thomson Reuters. That’s a 54% increase over 2013 year-to-date totals, and the strongest such period since 2000. A majority of this year’s activity (61%) is for U.S.-based companies.
THE BIG DEAL
• Wayfair, a Boston-based ecommerce company focused on the home furnishings market, has filed for a $350 million IPO. It plans to trade on the NYSE under ticker symbol W, with Goldman Sachs listed as left lead underwriter (9 other banks also are on the filing). Wayfair reports a $51 million net loss on $574 million in revenue for the first half of 2014, compared to an $8 million net loss on $383 million in revenue for the year-earlier period.
The company has raised nearly $370 million in venture capital funding from such firms as Great Hill Partners (11.43%), HarbourVest Partners (7.03%), Battery Ventures (6.15%) and Spark Capital (4.4%). Included in that total is a $157 million investment earlier this year at a $2 billion valuation from a group of mutual funds led by T. Rowe Price (which is not listed as a significant shareholder in the filing) — $29 million of which was used to repurchase stock from insiders. Read more.
VENTURE CAPITAL DEALS
• Medallia Inc., a Pal Alto, Calif.-based provider of customer experience management tracking software, has raised $50 million in new VC funding from return backer Sequoia Capital. The company now has raised $105 million in total funding from Sequoia. www.medallia.com
• Comprehend, a Redwood City, Calif.-based provider of cloud-based business intelligence solutions for life sciences companies, has raised $21 million in Series B funding. Lightspeed Venture Partners led the round, and was joined by return backer Sequoia Capital. www.comprehend.com
• Quinyx AB, a Sweden–based provider of workforce management solutions in the cloud, has raised $14 million in VC funding from Alfvén & Didrikson. www.quinyx.com
• FreshGrade, a British Columbia-based assessment and communications platform
for teachers, has raised $4.3 million in seed funding from NewSchools Venture Fund, Emerson Collective, Accel Partners and The Social+Capital Partnership. www.freshgrade.com
• United Office Inc., a Portsmouth, N.H.-based provider of private cloud-based virtual office services to SMEs, has raised an undisclosed amount of seed funding from Rick Burnes (co-founding and partner emeritus at CRV) and Bill McCullen (chief investment officer at LaunchCapital). www.unifiedoffice.com
PRIVATE EQUITY DEALS
• Aero Communications, an acquisition platform sponsored by Resilience Capital Partners, has acquired Fulton Technologies, a Roseville, Ill.–based provider of maintenance and aftermarket services to the wireless industry in the Midwestern U.S. No financial terms were disclosed. www.aerocommunications.com
• The Blackstone Group and TPG Capital are nearing an agreement to acquire British subprime mortgage lender Kensington from Investec, according to the FT. Read more.
• Bregal Partners has agreed to acquire Dental Partners Inc., a dental practice management company with operations in Tennessee, Kentucky, Florida, and Georgia. No financial terms were disclosed. Bregal plans to use Dental Partners as an acquisition platform focused on general dentistry practices with between $5 million and $25 million in revenue that are based in the Southeast, Texas and parts of the Midwest. www.dental-partners.com
• CVC Capital Partners is among several first-round bidders for Finnish insulation maker Paroc, which could be sold for between €700 million and €750 million, according to Reuters. Other bidders include Cinven, Nordic Capital and TPG Capital. Lazard is managing the process, while sellers would include Arcapita Bank and Alimtiaz Investment Co. Read more.
• GTCR has completed its previously-announced $480 million acquisition of Cole-Parmer, a Vernon Hills, Ill.-based lab equipment company, from Thermo Fisher Scientific (NYSE: TMO). www.coleparmer.com
• Intervale Capital has acquired Recapture Solutions LLC, a provider of flare reduction and natural gas power solutions to oil and gas production companies in the Permain, Williston and DJ basins, from Triten Corp. No financial terms were disclosed. www.recapturesolutions.com
• SQAD, a Tarrytown, N.Y.-based provider of media cost forecasting services, has acquired Workhorse Software, a provider of advertising planning software. No financial terms were disclosed. SQAD is a portfolio company of Clarion Capital Partners. www.sqad.com
IPOs
• Two companies are scheduled to price IPOs on U.S. exchanges this week, according to Renaissance Capital: GWG Holdings and Zosano Pharma. Read more.
• Shake Shack, a burger chain whose shareholders include Alliance Consumer Growth, is talking with bankers about a possible IPO, according to Reuters. Read more.
EXITS
• Apax Partners has pulled Epicor Software Corp. from the auction block, according to the WSJ. CVC Capital Partners reportedly was among several suitors to offer around $3 billion (including assumed debt) for Epicor, a Dublin, Calif.-based business software maker. Read more.
• Baird Capital Partners has agreed to sell MedData Inc., a Brecksville, Ohio–based provider of revenue cycle management services for the healthcare services market, to Mednax Inc. (NYSE: MD). No pricing terms of the all-cash deal were disclosed. www.meddata.com
• The Blackstone Group is seeking a buyer for Heartland Food Corp., owner of 330 Burger King restaurants in the Midwestern U.S., according to Bloomberg. Read more.
• Georgia-Pacific has acquired SPG Holdings LLC, a Green Bay, Wis.–based provider of specialty paper products for the restaurant and food-service distribution industries, from CIC Partners. No financial terms were disclosed. www.gp.com
• Google (Nasdaq: GOOG) has acquired Jetpac, maker of a travel app that integrates image integration, for an undisclosed amount. Jetpac had raised $2.4 million in Series A funding from investors like Khosla Ventures, Jerry Yang and Morado Venture Partners. www.jetpac.com
• Sensata Technologies Holding (NYSE: ST) has agreed to acquire Schrader, a Denver-based provider of tire pressure monitoring sensors, from Madison Dearborn Partners for $1 billion. Read more.
• Sequential Brands Group (Nasdaq: SQBG) has completed its previously-announced acquisition of Galaxy Brand Holdings Inc., owner of consumer brands like Avia fitness products and Linens ‘N Things home goods, for approximately $260 million (including $100 million in cash). Galaxy Brands backer The Carlyle Group has become a significant Sequential Brands shareholder, via the stock portion of the acquisition. www.sequentialbrandsgroup.com
• Sycamore Partners has hired Goldman Sachs and Citigroup to find a buyer for women’s shoe retailer Stuart Weitzman, according to Reuters. The deal could be valued at around $800 million. Sycamore acquired Stuart Weitzman earlier this year via its $2.2 billion purchase of Jones Group. Read more.
OTHER DEALS
• Alberta Investment Management Corp. has acquired a C$520.3 million mortgage portfolio from OMERS. No additional financial terms were disclosed. www.aimco.alberta.ca
• Dollar General (NYSE: DG) has offered to buy rival discount retailer Family Dollar Stores (NYSE: FDO) for $9.7 billion in cash and stock, or $78.50 per share. This tops an July offer of $8.5 billion, or $74.50 per share, from Dollar Tree (Nasdaq: DLTR). Read more. http://fortune.com/2014/08/18/dollar-general-bids-9-7-billion-for-family-dollar/
FIRMS & FUNDS
• Black Diamond Capital Management is targeting upwards of $1 billion for its fourth distressed private equity fund, according to LBO Wire. The Greenwich, Conn.-based firm had raised $800 million for its third fund in 2011. www.bdcm.com
• Gulf Capital, an Abu Dhabi-based private equity firm, has hired BofA Merrill Lynch to lead its IPO in the UAE, according to Bloomberg. Read more.
• Ribbit Capital, a venture capital firm focused on the financial services sector, has closed its second fund with $125 million in capital commitments, according to a regulatory filing. www.ribbitcap.com
MOVING IN, UP, ON & OUT
• Stephen Delaney has agreed to join London-based private equity firm Bowmark Capital as an investment director, according to Dow Jones. He previously spent seven years with Darwin Private Equity. www.bowmark.com
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http://fortune.com/2014/08/18/term-sheet-monday-august-18
