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Term Sheet — Friday, September 5

September 5, 2014, 2:13 PM UTC

Random Ramblings

 Some notes to walk us into the weekend...

The next Park Hill? Energy-focused private equity giant Riverstone Holdings has been bulking up its investor relations staff this year, growing the group from just 3 to around 10. Included have been several hires from Advent International (including new group lead Bob Brown), and this week Cristina Forcina emailed friends and colleagues to say she was joining Riverstone after more than 10 years as an executive director of fund placements with UBS.

On the surface, it would seem that Riverstone is simply adding resources to help raise its sixth flagship fund, which has a whopping $8 billion target. But sources familiar with the situation say that the new Riverstone IR team may soon be doing much more than just manage Riverstone’s fundraising and LP relations.

The team is expecting to eventually begin helping to raise funds and formulate ongoing IR strategies for non-Riverstone private equity firms outside of the energy sector. Kind of like what Blackstone-affiliated Park Hill Group does, except that this team would expect to still spend a majority of its time on Riverstone business (whereas Park Hill’s outside work outweighs its Blackstone-specific work). It remains unclear when this effort would formally begin, as the details are still being worked out (including the pursuit of a broker-dealer license).

Riverstone declined comment.

Open question: Is one reason large private equity firms are diversifying into tech growth equity because of decreasing opportunities to buy mature companies that are unlikely to be disrupted? In other words, tech is no longer content with improving on the last piece of software, so much as it is attacking "non-tech" industries (the most obvious example being taxis/black cars). We're even seeing it with mattresses -- arguably the most emblematic of all private equity plays. 

Obvious explanation: Each day there seems to be another political insider who suggests that Mitt Romney plans to run again for president. I like to think all of this is just being ginned up by private equity firms that enjoy giving Bain Capital some heartburn.

Recommended reading: Bloomberg reporter Zeke Faux believes that tech-focused private equity firm Vector Capital secretly invested in a shady offshore payday lending company without being fully transparent to limited partners (which include Harvard and MIT). Read more.

Tick-tock:  Alibaba Group originally planned to go public on August 8, because the number eight is associated with luck and wealth in Chinese culture. But it didn’t happen, without various sources saying that the timeline was just too ambitious for what is expected to be the largest tech IPO of all time.

Then, earlier this week, Bloomberg reported that the revised timeline had the Chinese Internet giant beginning its IPO road-show next week (i.e., Sept. 8), with plans that it would price the following Thursday (i.e., Sept. 18).

Makes symbolic sense, but Alibaba is running out of time to make it happen.

The company still has not filed initial pricing terms with the SEC, which would be needed before beginning the roadshow. Companies typically file this information with the SEC at least two weeks before pricing, which means Alibaba effectively has until market close today. After that, it’s hard to imagine how it sticks to its already-delayed schedule. The big question then is if Alibaba would abandon the “eights” strategy, or literally push everything back a month (causing massive headaches for other IPO hopefuls who are waiting for Alibaba to get out of the way).

 Have a great weekend!


 DataStax Inc.,  a big data platform for enterprise applications, has raised $106 million in Series E funding. Kleiner Perkins Caufield & Byers led the round, and was joined by ClearBridge Investments, Cross Creek Advisors, Wasatch Funds, Comcast Ventures, PremjiInvest and return backers Scale Venture Partners, Lightspeed Venture Partners, Crosslink Capital and Meritech Capital Partners. The company has now raised $190 million in total VC funding.


 MetricStream, a Palo Alto, Calif.-based provider of governance, risk and compliance software, has raised $60 million in new VC funding. Sageview Capital led the round, and was joined by return backers Goldman Sachs and Kaiser Permanente Ventures.

 HootSuite, a Vancouver-based social media management company, raised $35 million in new VC funding at a valuation of nearly $800 million led by Fidelity Investments, according to the WSJ.The company previously raised around $187 million from Insight Venture Partners, OMERS Ventures and Accel Partners. Read more. 

 Frank & Oak, a New York-based menswear brand, has raised $15 million in Series B funding. Goodwater Capital led the round, and was joined by Greenoaks Capital, Investment Quebec, John Currie (CFO of Lululemon) and return backers Rho Canada Ventures, Real Ventures, Version One Ventures, Lightbank, and Bertelsmann Digital Media Investments.

 Propeller Health, a Madison, Wis.-based developer of digital health solutions for chronic respiratory disease, has raised $14.5 million in Series B funding. Safeguard Scientifics led the round, and was joined by return backer The Social+Capital Partnership.

 KnCMiner, a Swedish maker of bitcoin miners, has raised $14 million in Series A funding led by Creandum.

Legend3D Inc., a San Diego-based 3D visual effects and conversion company, has raised $10 million in Series C funding led by existing shareholders Northwater Capital Management and Augustus Ventures Ltd.

Narrative (f.k.a. Memoto), a Swedish maker of a miniature automatic camera and app, has raised $8 million in VC funding. Khosla Ventures led the round, and was joined by LDV Capital, Passion Capital and True Ventures.

 Breather, a New York-based network of private rooms inside cities that are rented via mobile app, has raised $6 million in Series A funding. RRE Ventures led the round, and was joined by Vayner/RSE, Real Ventures and SOS Ventures.

 Beddit, a Helsinki-based maker of consumer-grade sleep monitors, has raised $8 million in new VC funding from Inventure.

 iSpecimen, a Lexington, Mass.-based provider of on-demand human biospecimens to the life science community, has raised $8 million in Series B funding led by OneBlood Inc.

 LiveAction Inc., a Palo Alto, Calif.-based provider of network management software, has raised $5.35 million in Series A funding. AITV led the round, and was joined by Cisco Investments and Enerdigm Ventures.

 Bridj, a Boston-based pop-up bus service, has raised $4 million in seed funding. Backers include Atlas Ventures, NextView Ventures, Suffolk Equity and Freshtracks Capital.

 AirSig, a Taiwan-based developer of an air signature and writing technology, has raised $2 million in VC funding from Foxconn Technology Group at a $20 million pre-money valuation.

 Cord Project Inc., a New York-based voice messaging statrtup, has raised $1.8 million in seed funding. Metamorphic Ventures and Lerer Hippeau Ventures co-led the round, and were joined by Google Ventures, Greycroft Partners, Slow Ventures, Gary Vaynerchuk, Melo7 Tech Partners and Xavier Niel.

 Axial Healthcare, a Nashville, Tenn.-based provider of a big data analytics platform for healthcare insurers, has raised $1.75 million in Series A funding led by BlueCross BlueShield Venture Partners and Sandbox Industries. 

 Whale Path, a San Francisco-based on-demand business research platform for corporate customers, has raised $1.1 million in seed funding. Backers include TMT Investments, Kima Ventures, 500 Startups, Altair Capital, FundersClub, Wefunder and Ben Narasin.

 Red Dot Payment, a Singapore-based online payment processing startup, has raised an undisclosed amount of Series A funding from GMO Global Payment Fund and Wavemaker Pacific.

 Cignifi, a Cambridge, Mass.-based provider of mobile financial products to the global unbanked, has raised an undisclosed amount of Series B funding from backers like Omidyar Network and American Express Ventures.


 Argonne Capital Group has acquired the assets of The Lube Stop Inc., a quick oil change company with 37 locations in Northeast Ohio. No financial terms were disclosed.

 Avison Young, a Toronto-based commercial real estate services company, has raised an undisclosed amount of growth equity from Tricor Pacific Capital.  

 The Jordan Co. has acquired Capstone Logistics LLC, a Norcross, Ga.–based provider of outsourced supply chain solutions, from H.I.G. Capital and MSouth Equity Partners. No financial terms were disclosed. Harris Williams & Co. managed the process.

Mill Road Capital and The Blackstone Group have completed their previously-announced acquisition of R.G. Barry Corp. (Nasdaq: DFZ), a Pickerington, Ohio-based maker of footwear, handbags and other women’s accessories, for approximately $215 million in cash. The $19 per share deal represents an 18% premium to the 30-day trading average prior to the announcement of Mill Road’s original proposal on Sept. 11, 2013.

 Misys, a UK-based portfolio company of Vista Equity Partners, has acquired Custom Credit Systems, a Richardson, Texas-based provider of commercial loan automation and workflow software for banks, from Triton Pacific Capital Partners. No financial terms were disclosed.

 Precision Engineered Products, a portfolio company of The Jordan Co. and Nautic Partners, has acquired Advanced Precision Products Inc., a Palmer, Mass.-based maker of complex components for multiple industries, from Hastings Equity Partners. No financial terms were disclosed.

 Reynolds Group, a New Zealand-based packaging company, has picked participants in the second round of bidding for Swiss unit SIG Combibloc, according to Reuters. The deal is expected to be valued at more than $5.2 billion, with remaining suitors including BC Partners, Bain Capital, Partners Group and a pairing of CVC Capital Partners with Onex Partners. Read more


 CGN Power Co., a Chinese nuclear-power producer, has filed for a $2 billion Hong Kong IPO. Read more

 China Auto Rental Inc., a Chinese car rental company backed by Warburg Pincus and Hertz Global Holdings, has launched a Hong Kong IPO that could raise upwards of $468 million, according to Reuters. Read more. 

 Upland Software Inc., an Austin, Texas-based provider of enterprise work management applications, has filed for a $50 million IPO. It plans to trade on the NYSE under ticker symbol UPLD, with William Blair and Raymond James serving as lead underwriters. The company reports a $15 million net loss on around $32 million in revenue for the first half of 2014. Shareholders include ESW Capital (24.5% pre-IPO stake), Austin Ventures (19.9%) and Activant Capital (7%).

Error: Yesterday I mixed up the financial info for IPO candidate Civitas Therapeutics with the financial info for IPO candidate Civitas Solutions. Apologies.


 LogMeInc Inc. (Nasdaq: LOGM) has acquired Meldium, a San Francisco-based provider of single-sign-on, password management and identity and access management solutions. The deal was valued at approximately $15 million in cash. Meldium had been seeded by Y Combinator, Founders Co-op, Draper Associates and FundersClub.

 New Look, a British clothing retailer owned by Apax Partners and Permira, has agreed to sell its French unit Mim to Main Asia Ltd. for an undisclosed amount.


 Nordic Capital has agreed to sell its majority stake in Swedish packaging company Nefab AB to its founding family for an undisclosed amount. There had been some thought that Nordic Capital would pursue an IPO for Nefab, which generated around $425 million in 2013 revenue.

 North Castle Partners has sold Ignite USA LLC, a Chicago-based provider of reusable thermal mugs and hydration bottles primarily sold under the Contigo brand, to Newell Rubbermaid  (NYSE: NWL). The deal was valued at approximately $308 million. 

 United Biscuits Ltd. is “meeting this week with potential buyers,” according to the WSJ. Owners Blackstone Group and PAI Partners have been seeking to either sell or float the British snack-maker. Suitors reportedly include Kellogg Co., Ontario Teachers' Pension Plan, Italy’s Ferrero SpA and Turkey’s Ulker Biskuvi Sanavi AS. Read more

 Veracyte Inc. (Nasdaq: VCYT) has agreed to acquire Allegro Diagnostics Corp., a Maynard, Mass.-based developer of genomic diagnostic tests for lung cancer, for $21 million in cash and stock. Allego had raised VC funding from Catalyst Health Partners, Boston University and Kodiak Venture Partners.


 The Mattress Firm Holding Corp. (Nasdaq: MFRM) has agreed to acquire rival mattress retailer Sleep Train for approximately $425 million.


 DMC Partners, an emerging markets-focused private equity firm launched by ex-Goldman Sachs bankers, has stopped trying to raise a $2 billion-targeted debut fund due to the conflict between Russia and Ukraine, according to the FT. Read more


 Thomas Goila has joined Aequitas Capital as a senior managing director of private credit and private equity. He previously spent nine years with Goldman Sachs.

 Steven Paul has joined gene therapy company Voyager Therapeutics Inc. as CEO. He previously was a venture partner with Voyager backer Third Rock.

 Ross Posner has joined Ridgewood Private Equity Partners, an investment firm focused on energy-centric real asset strategies, as a senior managing director. He previously led the global infrastructure and real asset private equity group at Allstate Investments.

 Nathan Sanders has joined Technology Crossover Ventures as a general partner and head of investor relations. He previously was with Bain Capital.

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