Today’s column didn’t quite come together in time, so just a few quick notes for those who are actually working this week:
• Tortured analogy: Sports fans are prone to get overly-excited by the next big thing, whether that be a rookie backup quarterback or a Triple-A pitcher who has yet to play a day in the big leagues. They must be better than some of the bums we’ve already got, because these youngsters haven’t yet failed a single time on the big stage.
I’m beginning to think that similar thinking is infecting certain public market investors who are dipping down into the venture capital markets. Not just the big later-stage deals that are tacit IPO optionality, but also on much younger companies that show great promise but remain years away from either product or liquidity. Like Fidelity leading that recent round for Juno Therapeutics. That deal makes sense for many types of investor, but for a big mutual fund manager? Strategy creep is one thing, strategy sprint is another…
• Russia retreat? The WSJ is reporting that Kurt Björklund, co-managing partner of UK-based private equity firm Permira, has quit the advisory board of the $10 billion state-owned Russian Direct Investment Fund. This comes as the Russia-Ukraine conflict intensifies, and nations like the U.S. and UK impose stronger economic sanctions on Russia.
A big question now is if other PE bigs will follow suit. Other members of the RDIF advisory board include Steve Schwarzman (Blackstone), David Bonderman (TPG), Joe Schull (Warburg Pincus) and Martin Halusa (Apax). None seem to have made a formal decision to quit yet. Interested to know if you think they should and, if you invest in Russia, how you’re handling the current situation (and, if you’re inside of Russia, how you’re viewing capital inflows).
• Full basket: The year’s most fascinating U.S. labor story is coming to a close, with Arthur T. Demoulas agreeing to buy the 50.5% stake he doesn’t already own in supermarket chain Market Basket from his estranged cousin (Arthur S. Demoulas) at an enterprise value of around $3 billion. Around $500 million of the purchase price is coming from a still-undisclosed private equity firm.
For those who haven’t been following: The popular Arthur T. was fired back in June, prompting hundreds of Market Basket workers to walk out. Customers also boycotted, as both shelves and aisles became ghostly. That’s right, non-unionized workers gave up numerous paychecks and consumers inconvenienced themselves all for the sake of a CEO. If you’ve ever heard of that happening before, you’re one up on me…
• Quiz time: Can you name the Bitcoin startup that is in (complicated) talks to raise big new money from a corporate investor? Hint: The corporate does not have a formal VC arm, and the overall round could be the largest-ever deal for a bitcoin startup.
THE BIG DEAL
• LendingClub Corp., a San Francisco-based peer-to-peer lending marketplace, has filed for a $500 million IPO. Morgan Stanley and Goldman Sachs are serving as co-lead underwriters. The company reports a $16 million net loss on $87 million in revenue for the first half of 2014, compared to $1.7 million in net income on $37 million in revenue for the year-earlier period.
LendingClub has raised nearly $400 million in VC funding from such firms as Norwest Venture Partners (16.5% pre-IPO stake), Canaan Partners (15.9%), Foundation Capital (12.8%), and Morgenthaler Venture Partners (9.2%). Read more. Also, check out Jessi Hempel’s Q&A with LendingClub CEO Renaud Laplanche from earlier this year.
VENTURE CAPITAL DEALS
• Nutanix, a San Jose, Calif.-based provider of datacenter infrastructure solutions, has raised $140 million in Series E funding at a valuation north of $2 billion. Two unidentified “Boston-based public market investors” led the round. Nutanix previously had raised around $172 million from Morgan Stanley Expansion Capital, Greenspring Associates, Riverwood Capital, SAP Ventures, Lightspeed Venture Partners, Khosla Ventures and Battery Ventures. www.nutanix.com
• KKBOX, a Taiwan-based provider of music streaming services in Asia, has raised around $104 million in new funding from Singapore’s GIC. Read more.
• SeatGeek, a New York-based ticket search engine, has raised $35 million in Series B funding. Accel Partners led the round, and was joined by Causeway Media Partners, Carmelo Anthony, Peyton and Eli Manning, Nas, Stanford University Athletics, Rob Glaser and Founder Collective. www.seatgeek.com
• Wikia, a San Francisco-based collaborative media platform, has raised $15 million in Series D funding. Digital Garage was joined by return backers Amazon, Bessemer Venture Partners and Institutional Venture Partners. www.wikia.com
• InContext Solutions, a Chicago-based developer of 3D virtual simulation technology, has raised $12 million in Series D funding. Beringea led the round, and was joined by return backers Plymouth Venture Partners and Hyde Park Venture Partners. www.incontextsolutions.com
• Armetheon Inc., a Menlo Park, Calif.-based developer of mid-to-late-stage cardiovascular drugs, has raised $7 million in Series A funding. AshHill Biomedical Investments and Hercules Bioventures co-led the round, and were joined by Atheneos Capital and Larry Hsy (founder of Impax Labs). www.armetheon.com
• Ybrain, a South Korean maker of wearables for Alzheimer’s patients, has raised $3.5 million in Series A funding led by Stonebridge Capital. Read more.
• Smarter Remarketer, an Indianapolis-based provider of customer intelligence solutions for multi-channel retailers, has raised $7 million in venture debt financing from City National Bank. www.smarterremarketer.com
PRIVATE EQUITY DEALS
• Advent International has agreed to acquire a 49.99% stake in Cataratas do Iguacu SA, operator of concessions stands around Brazil’s Iguazu waterfalls. No financial terms were disclosed. www.adventinternational.com
• The Blackstone Group and Fajr Capital are in talks to acquire around a 20% stake in GEMS Education, a Dubai-based operator of more than 100 schools in 14 countries, according to Bloomberg. The deal could be valued at around $350 million. Read more.
• Elizabeth Arden Inc. (Nasdaq: RDEN) said that it is evaluating Rhone Capital’s tender offer for upwards of 20% of the skin care product and fragrance maker. Read more.
• KKR and Borealis Maritime have acquired a portfolio of nine feeder container vessels from a consortium of German KG funds. No financial terms were disclosed. Commerzbank arranged the transaction. www.kkr.com
• Monomoy Capital Partners has agreed to acquire Cobra Electronics Corp. (Nasdaq: COBR), a Chicago–based maker of mobile communications and navigation products, for just over $28 million in cash. The $4.30 per share deal represents an 8.31% premium over yesterday’s closing price for Cobra stock. www.cobra.com
• Orgentec Diagnostika, a German portfolio company of Water Street Healthcare Partners, has agreed to acquire Corgenix Medical Corp. (OTC BB: CONX), a Denver-based maker of diagnostic tests kits, for $16 million in cash ($0.27 per share). www.orgentec.com
• Superior Street Partners has acquired Riverbend Nursery Inc., a Riner Va.-based producer and distributer of perennial plants, herbs and ground cover. No financial terms were disclosed for the deal, except that Union First Market Bank provided senior notes. www.sstreetpartners.com
• Dermira Inc., Redwood City, Calif.-based developer of dermatology therapies, has filed for a $70 million IPO. It plans to trade on the Nasdaq under ticker symbol DERM, with Citigroup and Leerink Partners serving as lead underwriters. The pre-revenue company has raised around $105 million n VC funding, from firms like Bay City Capital (21% pre-IPO stake), New Enterprise Associates (21%), Canaan Partners (15%), UCB (8.4%), Maruho Co. (7.3%), Apple Tree Partners (6.4%) and Fidelity Investments (6.4%). www.dermira.com
• Rhythm Pharmaceuticals, a Boston-based developer of peptide therapeutics for the treatment of GI and genetic deficiencies that result in metabolic disorders, has filed for an $86.25 million IPO. It plans to trade on the Nasdaq under ticker symbol RYTM, with Citigroup and Cowen & Co. serving as lead underwriters. The pre-revenue company has raised around $95 million in VC funding from such firms as New Enterprise Associates (31.21% pre-IPO stake), Third Rock Ventures (31.09%), MPM Capital (18.58%) and Pfizer Inc. (9.92%). www.rhythmtx.com
• Terra Firma Capital Partners is considering a sale of Garden Centre Group, a British operator of gardening retailers, according to Bloomberg. The deal could be valued at upwards of 700 million, compared to the 276 million Terra Firma paid two years ago to acquire Garden Centre Group from Lloyds Banking Group. Read more.
• ZBI Ventures, the private equity unit of Ziff Brothers Investments, is seeking to sell its holdings in six oil and gas companies – the entirety of its energy holdings – according to Bloomberg. The asking price is around $1.2 billion, while the buyer also would be on the hook for upwards of $400 million in follow-on investments for the acquired companies. Read more.
• DLC, a Woodland Hills, Calif.–based professional staffing firm for Fortune 1000 companies, has acquired Beacon Resources LLC, a Newport Beach, Calif.-based finance and accounting staffing and executive search firm. No financial terms were disclosed. www.dlcinc.com
• Joyeria Tous SA, a privately-held Spanish jewelry designer, has hired Morgan Stanley to explore strategic options that could include a minority stake sale, according to Bloomberg. Private equity firms are expected to have interest. Read more.
• Willis Ireland, a unit of Willis Group Holdings PLC (NYSE: WSH), has acquired several Irish pension and financial advisory businesses from IFG Group Inc. (Ireland: IJG) for an undisclosed amount. www.willis.com
FIRMS & FUNDS
• ArcLight Capital Partners, a Boston-based private equity firm focused on the North American energy market, is seeking to raise $4 billion for its sixth fund, according to Bloomberg. ArcLight currently is investing out of a $3.3 billion fund raised in 2011. Read more.
MOVING IN, UP, ON & OUT
• Alison Howe has agreed to join the leveraged finance team of Credit Suisse, after having serves as a senior managing director of leveraged finance for UBS, according to Dow Jones. Read more. http://www.efinancialnews.com/story/2014-08-27/alison-howe-joins-credit-suisse
Share today’s Term Sheet: