Random Ramblings
Some notes to kick off your Tuesday:
• New firm alert: Earlier this year, we reported that Jordan Katz and Tim Meyer had stepped down as managing directors with Los Angeles-based buyout firms Gores Group. Now comes word that the pair has launched a new firm called Angeles Equity Partners, which is expected to focus on mid-market deals in the industrials sector.
AEP has hired Moelis & Co. and GCA Savvian to help raise its debut fund, although I have not yet heard a size target. Katz and Meyer did not return requests for comment.
• Speaking of new firms: It appears that the London team of private equity fund placement agent Probitas Partners has spun out to form a new firm called Quest Fund Placement. Among the new Quest team are James Coleman and Gianluca D’Angelo. Probitas is expected to maintain its London office – one of four global offices – but it’s unclear if it plans to relocate existing staff or hire locally.
• Return on investment: The latest Alibaba IPO docs show that Silver Lake Partners holds around 58.93 million shares, or around 2.5% of all outstanding shares. At the high end of Alibaba’s expected IPO price range ($60-$66), the position would be worth around $3.89 billion. For context, Silver Lake invested a total of around $500 million into Alibaba via two deals (the first one in mid-2011), and has never sold a share (although it does plan to offer up 4.1 million shares via the IPO).
• He must read Fortune: Tony James, president of The Blackstone Group, spoke at a Politico-sponsored breakfast this morning and was asked about tax inversion deals. His response: "It sounds and feels un-American." His solution? "I’d look at passing regulations on earnings stripping, on company loans, maybe put an excise tax on golden parachutes. I think that would throw a lot of cold water on it.” Got to wonder if James thinks such regulations also should apply to private equity firms that buy U.S. companies and relocate their headquarters overseas (yes, I'll ask).
• Recommended reading: Bailey McCann has a lengthy interview with Andrew Bowden, the SEC official who made waves earlier this year by saying that, following presence exams on private equity firms, “We have identified what we believe are violations of law or material weaknesses in controls over 50% of the time.” It kind of sounds like Bowden thinks that his statement scared PE firms straight, although I continue to hear rumblings that at least one major firm is negotiating a settlement over various fees. Read the interview here.
• Quiz time: Can you name the partner in a big-name VC firm who currently sits on the Reddit board of directors. Hint: The firm was not mentioned in Re/Code’s report yesterday on a big new round of funding for social news site and it’s unclear if the firm is participating.
• Where in the World? Be sure to get your ticket for tomorrow’s Boston Block Party, which follows the 4th Annual Tech Gives Back event. And be sure to use the promo code PRIMACK to save 25%. Hope to see you there.
THE BIG DEAL
• Dave & Buster's, a Dallas-based restaurant and arcade chain owned by Oak Hill Capital Partners, has filed for a $100 million IPO. It plans to trade on the Nasdaq under ticker symbol PLAY, with Jefferies and Piper Jaffray serving as lead underwriters. The company reports around $2 million in net income on $636 million in revenue for its fiscal year ending Feb. 2, 2014, compared to $9 million of net income on $608 million in revenue for the year-earlier period.
Dave & Buster’s previously filed for an IPO in 2011 (withdrawn in October 2012), and earlier this year sought buyers in a failed auction process. www.daveandbusters.com
VENTURE CAPITAL DEALS
• Avogy Inc., a San Jose, Calif.-based maker of vertical gallium nitride-based power semiconductor devices, has raised $40 million in Series B funding. Intel Capital led the round, and was joined by Khosla Ventures. www.avogy.com
• Flex Pharma Inc., a Boston-based developer of treatments for neuromuscular disorders, has raised $40 million in new VC funding. Backers include Longwood Fund, Bessemer Venture Partners, EcoRq Capital, Jennison Associates, Lightstone Ventures, Alexandria Equities, CD-Venture, Bindley Capital Partners, City Hill Ventures, Kraft Group and individual angels like Todd Dagres, Peter Lynch and Steve Pagliuca. www.flex-pharma.com
• Sonendo Inc., a Laguna Hills, Calif.-based developer of endodontic technologies for enabling root canals to be quickly cleaned, has raised $35 million in new VC funding. Meritech Capital Partners led the round, and was joined by SED Private Equity and return backers Fjord Ventures, OrbiMed Advisors and NeoMed Management. www.sonendo.com
• Sandlot Solutions Inc., a Fort Worth, Texas–based provider of a electronic health record interoperability, big data analytics and population health management platform, has raised $23.3 million in new VC funding. Lemhi Ventures led the round with a $17 million investment, and was joined by existing shareholders North Texas Specialty Physicians and Santa Rosa Holdings. www.sandlotsolutions.com
• BLiNQ Networks Inc., a Plano, Texas-based provider of wireless backhaul solutions, has raised $15.1 million in Series B funding. WIN Fund led the round, and was joined by Kensington Global Private Equity Fund and return backers BDC Capital, New Venture Partners and Summerhill Venture Partners. www.blinqnetworks.com
• HomeUnion, an Irvine, Calif.-based online real estate investment management firm focused on single-family rental properties, has raised $5.5 million in Series A funding from Artiman Ventures. www.homeunion.com
• Edufii Inc., a San Luis Obispo, Calif.-based social and mobile platform for athletic skills development, has raised $1.4 million in Series A funding. DFJ Frontier and the Pasadena Angels co-led the round, and were joined by Gideon Hixon Fund, Tech Coast Angels, SLO Seed Ventures and individual angels. www.edufii.com
• Euclises Pharmaceuticals Inc., a St. Louis-based oncology drug startup, has raised $1.3 million in Series A funding. Cultivation Capital led the round, and was joined by BioGenerator, Missouri Technology Corporation, ABC Laboratories, the St. Louis County Port Authority’s Helix Fund and the St. Louis Arch Angels. www.euclises.com
• Kueski Inc., a Guadalajara, Mexico-based online micro-lending platform has raised $1.3 million in seed funding. CrunchFund and Core Ventures Group co-led the round, and were joined by Angel Ventures Mexico, The Sobrato Family Holdings, Ariel Poler, GAIN and Javier Orozco. www.kueski.com
Dagne Dover, a New York–based handbag brand, has raised $1.25 million in seed funding. Backers include 2020 Ventures, First Round Capital’s Dorm Room Fund, David Bell, Fabrice Grinda and Dominic Cioffoletti. www.dagnedover.com
PRIVATE EQUITY DEALS
• The Blackstone Group and TPG Capital have agreed to acquire UK residential mortgage business Kensington from South Africa’s Investec for around £180 million. www.kmc.co.uk
• Breas Medical AB, a Swedish portfolio company of PBM Capital Group, has acquired B&D Electromedical, a UK-based maker of medical ventilators and airway clearance devices. No financial terms were disclosed. www.breas.com
• Distribution International Inc., a Houston-based portfolio company of Audax Private Equity and The CapStreet Group, has acquired Pacific Insulation Co., a Los Angeles-based distributor and fabricator of industrial and commercial insulation. No financial terms were disclosed. www.distributioninternational.com
• Extreme Plastics Plus Inc., a portfolio company of Hastings Equity Partners, has acquired American Well Service, a Washington, Penn.-based provider of containment and closed loop solids control to exploration and production companies throughout the Marcellus and Utica Shales. No financial terms were disclosed. www.extremeplasticsplus.com
• Global Capacity, a portfolio company of Pivotal Group, has agreed to acquire the wholesale business and national colocation aggregation network of MegaPath Corp., a Costa Mesa, Calif.-based portfolio company of Platinum Equity. No financial terms were disclosed. www.pivotalgroup.com
• Norwest Equity Partners has acquired Uintah Engineering & Land Surveying, a Vernal, Utah–based provider of surveying, drafting, and engineering services to the upstream and midstream oil & gas industry, from Moelis Capital Partners. No financial terms were disclosed. www.uintahgroup.com
• Safe Security, a San Ramon, Calif.-based portfolio company of ICV Partners, has acquired Safeguard Security and Communications Inc., a Scottsdale, Ariz.-based home security companies focused on gated communities. No financial terms were disclosed, except that the acquisition will add around $1.5 million in monthly recurring revenue to Safe Security. www.safesecurity.com
• Summit Park has acquired Tennessee Industrial Electronics, a provider of new and refurbished parts for computer numerical control systems for the machine tool industry. No financial terms were disclosed. www.summitparkllc.com
• TA Associates has acquired an undisclosed stake in Groupe CIPRÉS, a France–based wholesale broker of insurance policies. No financial terms were disclosed. www.ta.com
• Thoma Bravo has completed its previously-announced acquisition of SailPoint, an Austin, Texas –based provider of identity and access management solutions. www.sailpoint.com
IPOs
• PRA Health Sciences Inc., a Raleigh, N.C.-based contract research organization for the biotech and pharma markets, has filed for a $375 million IPO. It plans to trade on the Nasdaq under ticker symbol PRAH, with Jefferies serving as left lead underwriter. The company reports a $14 million net loss on $712 million in revenue for the first six months of 2014, and is owned by KKR. www.prahs.com
• Vitae Pharmaceuticals, a Fort Washington, Penn.-based drug company whose lead product is focused on Type 2 diabetes, has set its IPO terms to five million shares being offered at between $11 and $13 per share. It plans to trade on the Nasdaq under ticker symbol VTAE, with Stifel and BMO Capital Markets serving as lead underwriters. Shareholders include Prospect Venture Partners (23.3% pre-IPO stake), New Enterprise Associates (17.8%), Venrock Associates (15.6%), Atlas Venture (11.2%), Boehringer Ingelheim International (10.8%) and Allergan Inc. (5.6%). www.vitaepharma.com
EXITS
• Barclaycard, the global payments business of Barclays, has agreed to acquire The Logic Group, a UK-based provider of payment and loyalty solutions in Europe, from Susquehanna Growth Equity. No financial terms were disclosed. www.the-logic-group.com
• Rakuten (Tokyo: 4755) confirmed that it will acquire Ebates, a San Francisco-based site for ecommerce rebates, for approximately $1 billion. Ebates has raised VC funding from such firms as August Capital, Canaan Partners and Foundation Capital. www.ebates.com
OTHER DEALS
• BB&T (NYSE: BBT) has agreed to acquire The Bank of Kentucky Financial Corp. (Nasdaq: BKYF) for $363 million in cash and stock. Bank of Kentucky has around $1.9 billion in assets, $1.6 billion in deposits and 32 branches in Northern Kentucky and Cincinnati. www.bbt.com
• BGC Partners (Nasdaq: BGCP) has offered to buy rival brokerage and clearing firm GFI Group (NYSE: GFIG) for around $675 million in cash. The bid comes after CME Group (Nasdaq: CME) reached an agreement to acquire GFI in a two-part deal that would involve GFI spinning off its wholesale brokerage and clearing business into an independent company. BGC currently holds a 13.5% stake in GFI. www.gfigroup.com
• General Mills (NYSE: GIS) has agreed to buy Annie’s Inc. (NYSE: BNNY), a maker of natural and organic foods, for approximately $820 million in cash. The $46 per share deal represents a 37.27% premium over Annie’s closing stock price yesterday. Read more.
FIRMS & FUNDS
• Alta Growth Capital has closed its second Mexico-focused private equity fund with $142 million in capital commitments. www.agcmexico.com
• Innova Memphis, a venture capital firm focused on Memphis startups, has closed its third fund with $20 million in capital commitments. www.innovamemphis.com
• LeapFrog Investments has raised $400 million for its second fund focused on socially-responsible investments in emerging Asian and African countries. www.leapgroginvest.com
• Peak Ventures has raised $23 million for its latest fund focused on seed-stage companies in Utah and the Mountain West. www.peakventurecapital.com
MOVING IN, UP, ON & OUT
• Cyprium Partners, a Cleveland-based private equity firm, has named Ted Laufik as chief financial officer and chief compliance officer. He succeeds Dennis Wagner, who plans to retire at the end of October. Laufik previously spent time with Resilience Capital Partners and Morgenthaler. www.cyprium.com
• Robert Davis has joined UK-based private equity firm Calculus Capital as an investment director. He previously was a managing director with Avendus Capital. www.calculuscapital.com
• Louis Forster has joined Green Visor Capital, a financial services-focused VC group, as a general partner. E previously was a senior managing director of Cerberus Capital Management, where he most recently led Asian operations. www.greenvisorcapital.com
• Lodge Gillespie has joined the National Railroad Retirement Investment Trust as director of real assets. He previously was a managing director with The Investment Fund for Foundations (TIFF). www.nrrit.com
• Elizabeth Gore, currently an entrepreneur-in-residence for the United Nations Foundation, will join Dell Inc. next February as an EIR. www.dell.com
• Remy Kawkabani has joined Siguler Guff & Co. as a London-based managing director and head of EMEA activities. He previously was with Credit Suisse, most recently as a managing director and CEO of Credit Suisse Asset Management from the EMEA region. www.sigulerguff.com
• Damian Ridealgh has joined Weil, Gotshal & Manges LLP as a New York-based partner in the law firm’s global finance practice, with a focus on private equity and corporate clients. He previously was with Ashurst LLP. www.weil.com
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