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Term Sheet — Wednesday, September 17

September 17, 2014, 2:16 PM UTC

Random Ramblings

Some assorted notes to kick off your Wednesday:

Make it stop: You’ve got to give the New Jersey AFL-CIO credit: They don’t let the facts get in the way of a good corruption allegation. Just days after the union filed an error-ridden ethics complaint against the State Investment Council and its chairman Bob Grady, its SIC representative objected to a proposed $100 million commitment to a new private equity fund managed by Hellman & Friedman. At issue was that at least two H&F execs had donated to the Republican National Committee in 2012. Never mind that current New Jersey ‘pay-to-play’ lays explicitly exempt donations to national political parties. Or that the SIC had issued opinions eight years ago explicitly exempting such donations. Or that donations to national parties cannot be earmarked for use in a specific state. Never mind any of it, because the AFL-CIO objection is partisan mindlessness.

In barely-related news, Brian Powers is no longer chairman at Hellman & Friedman. He instead has transitioned into a chairman emeritus role, and is not listed on SEC documents for the new capital-raising effort.

Powers originally joined the San Francisco-based private equity firm in 1991, and later rejoined in 1999 after spending five years as CEO of Australia’s Consolidated Press Holdings Ltd. and Publishing and Broadcasting Ltd. He would later serve as the firm’s CEO, before being succeeded in 2009 by current CEO Philip Hammarskjold. That move was part of a previously-planned succession, which saw firm founder Warren Hellman hand the chairman role over to Powers. Hellman would pass away two years later.

 Speaking of public pensions: Yesterday I spoke with a CalPERS spokesman about the pension giant's decision to bail on hedge funds, and learned two things of note: (1) CalPERS has not yet decided where to reallocate the monies, once the pension eventually extricates itself from the existing $4 billion of hedge fund commitments (likely a two-year process). (2) He stressed that this was about scale rather than performance, in that the pension felt it needed to hit a 5-10% exposure mark to hedge that it simply could not reach. CalPERS has hit the 10% mark on private equity, even though it features many of the same complexities and fees that CalPERS cited in its hedge fund abandonment announcement. 

Unscientific sample: I asked my non-tech/non-finance friends on Facebook if they knew what Alibaba was. Only half said yes. 

Recommended reading: The Fed doesn't think that Credit Suisse listened to its guidance last year on leveraged loans, and now wants an explanation. For context, Credit Suisse has underwritten or sold nearly $9 billion of leveraged loans this year, which makes it the market leader with a 13.4% share. Read more here.

My colleague Jen Wieczner has a story on Battery East, a stealthy tech bank led by veterans of BlackRock, Founders Fund and Maveron. It's already been involved in some notable deals, but without any publicity until now. Read more here.

Get a move on: Hubspot Inc., a Boston-based provider of a marketing and sales SaaS platform, filed its IPO docs in late August and reportedly plans to move the process forward once Alibaba gets out of the way later this week. It had better hurry up.

According to its S-1 filing, Hubspot only had $7.3 million of cash ($9.9m of total working capital) on hand as of June 30. But it also reports a net loss of nearly $3 million per month during the first half of 2014. At that rate, it’s IPO ASAP or start selling the reception area furniture…


 Privia Health LLC, an Arlington, Va.-based physician practice management and population health technology company, has raised $400 million in new funding led by a Goldman Sachs affiliate. Other participants include Pamplona Capital Management, Cardinal Partners and return backers Health Enterprise Partners and Morgan Noble Healthcare Partners. Read more





VENTURE CAPITAL DEALS, a stealthy ecommerce startup led by Quidsy co-founder Marc Lore, has raised $20 million in new VC funding from Western Technology Investment. The company also secured a $5 million asset-backed facility from Silicon Valley Bank. previously raised $55 million from New Enterprise Associates, Accel Partners, Bain Capital Ventures and MentorTech Ventures.

 JW Player, a New York-based online and mobile video platform, has raised $20 million in Series C funding. Greycroft Growth and Greenspring Associates co-led the round, and were joined by Cueball Capital and

 CrowdFlower, a San Francisco-based data enrichment platform for data scientists, has raised $12.5 million in Series C funding. Canvas Venture Fund led the round, and was joined by return backers Bessemer Venture Partners and Trinity Ventures.

 Sentrix (f.k.a. Foresight-Air), a Israeli provider of enterprise-grade network security, has raised more than $6 million in VC funding from Magma Venture Partners, Cedar Fund and Israel’s Chief Scientist program. The company also just opened its first U.S. office in Boston.

 NewLeaf Symbiotics, a St. Louis-based agricultural bio company focused on the commercialization of “beneficial plant bacteria,” has raised $17 million in Series B fundin. Otter Capital led the round, and was joined by return backers RockPort Capital, Open Prairie Ventures and Pangaea Ventures.

 Newsela Inc., a written news delivery app for K-12 classrooms, has raised $4.1 million in Series A funding led by Owl Ventures, according to VentureWire. Read more

 RightCare, a Horsham, Penn.-based provider of predictive software for risk stratifying medical patients at admission, has raised $4 million in new VC funding from NewSpring Health Capital. Existing RightCare shareholders include Domain Associates and Compass 

 WebTeb, an Arabic health and lifestyle portal, has raised $3.2 million in Series C funding. Sadara Ventures led the round, and was joined by return backer Siraj Palestine Fund.

 Verto Analytics, a New York–based provider of digital media measurement services, has raised $2.4 million in new VC funding. Return backers include Open Ocean Capital and Conor Venture Partners.

 Chobolabs, a Palo Alto, Calif.-based mobile gaming startup, has raised $1.3 million in seed funding. Innovation Endeavors led the round, and was joined by individual angels like Jim Ellis (founder of Asurion) and Maurice Werdegar (CEO of Western Technology Investment).

 Renovo Motors Inc., a Campbell, Calif.-based maker of all-electric cars, has raised an undisclosed amount of new VC funding led by True Ventures.


 Hellman & Friedman confirmed that it will acquire Emeryville, Calif.–based supermarket chain Grocery Outlet Inc. from Berkshire Partners. No financial terms were disclosed, although an earlier WSJ report said that the deal would be valued at more than $1.1 billion.

 H.I.G. Capital has acquired two Brazilian digital media companies, which is will merge: Grupo NZN and Click Jogos. No financial terms were disclosed.

 Pacific DataVision Inc., a Paterson, N.J.-based provider of mobile workforce management solutions, has raised $218 million in equity funding with undisclosed institutional investors. In related news, PDV has acquired all of Sprint Corporation’s (NYSE: S) 900 MHz spectrum licenses (approximately 6 MHz nationwide). FBR Capital Markets served as placement agent.

 Sedgwick Claims Management Services Inc., a portfolio company of KKR and Stone Point Capital, has agreed to acquire T&H Global Holdings LLC, a Naperville, Ill.-based provider of specialized insurance claims services, from Flexpoint Ford. No financial terms were disclosed.

 Strattam Capital has acquired a majority stake in Doxim Inc., a Canadian provider of customer communications management software for the financial services market. No financial terms were disclosed.

 Vocus Inc. and Cision, providers of cloud-based public relations software that are being merged by GTCR, have acquired Visible Technologies, a Bellevue, Wash.–based provider of social media listening and analytics. No financial terms were disclosed. Visible had raised over $80 million in VC funding from firms like Ignition Partners, Investor Growth Capital, In-Q-Tel and WPP.


 Civitas Solutions Inc., a Boston-based provider of home and community-based health and human services for individuals with special needs, raised $199 million in its IPO. The company priced 11.7 million shares at $17 per share (below $20-$23 range), for an initial market cap of around $628 million. It will trade on the NYSE under ticker symbol CIVI. While Barclays was listed as left lead underwriter. The company reported an $18.3 million net loss on around $1.2 billion in revenue for 2013. Vestar Capital Partners remains the company’s majority shareholder following the IPO.

 Live Oak Bancshares, a Wilmington, N.C.-based small business lender, has withdrawn registration for an $86.25 million IPO, following a “successful private placement to select accredited institutional investors.” The company originally filed for the offering back in April, with Keefe Bruyette & Woods serving as lead underwriter.

 Proteon Therapeutics, a Waltham, Mass. Developer of renal and vascular therapies, has filed for a $69 million IPO. It plans to trade on the Nasdaq under ticker symbol PRTO, with Stifel and JMP Securities serving as lead underwriters. The pre-revenue company has raised around $125 million in VC funding, from firms like TVM Capital (19.4% pre-IPO stake), Abingworth (19.1%), Prism VentureWorks (15.6%), Skyline Ventures (15.3%), Deerfield Management (10.5%), Pharmastandard International SA (10.5%), Intersouth Partners (10.4%) and MPM Capital (10.3%).

 VWR Corp., a Radnor, Penn.–based lab equipment maker owned by Madison Dearborn Partners, has set its IPO terms to 25.53 million shares being offered at between $22 and $25 per share. It would have an initial market cap of approximately $3 billion, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol VWR, with BofA Merrill Lynch, Goldman Sachs and J.P. Morgan serving as lead underwriters.


 U-blox AG (Swiss: ABXN) has acquired Antcor SA, a Greek provider of WiFi technology, for upwards of €8.5 million. Sellers include Greek VC firm Attica Ventures.


 Cardiorentis AG, a Swiss, has entered into a €45 million royalty financing agreement with HealthCare Royalty Partners, which will be used to finance the company’s registration program for a natriuretic peptide treatment in acute heart failure.

 Endo International (NasdaQ: ENDP) has offered to acquire Auxilium Pharmaceuticals (Nasdaq: AUXL) for $2.2 billion, or $28.10 per share. Auxilium recently agreed to acquire Canadian biotech company QLT Inc. (Nasdaq: QLTI) in a tax inversion transaction. At the time of the original announcement, Auxilium was valued at around $1 billion while QLT was valued at around $300 million. Read more

 Rackspace, a San Antonio, Texas–based web hosting company with a $5.6 billion market cap, said yesterday that it has decided against a sale of the company. It had announced in May that it was exploring strategic alternatives, and subsequently had discussions with several suitors.

 SAI Global Ltd. (ASX: SAI), an Australian standards and compliance company, hsaid that it did not receive any takeover bids for the entire company. The company had announced an auction process back in May, after receiving a A$1.1 billion indicative offer from Pacific Equity Partners. The company’s shares now are trading more than 20% lower than where PEP had originally expressed interest. Read more

 Spirit Music Group, a New York-based independent music publishing house owned by Pegasus Capital Advisors, has raised $50 million in new capital commitments from Fortress Credit Corp.

 Washington Prime Group Inc. (NYSE: WPG) has agreed to acquire fellow commercial real estate company Glimcher Realty Trust (NYSE: GRT), for approximately $4.3 billion in cash and stock. The $14.20 per share deal represents a 34% premium to Monday’s closing price for Glimcher shares.


 Granite Hall Partners of Chicago has held a $10 million first close on a new $50 million-targeted fund-of-funds focused on distressed and alternative credit managers. The fund already has made a commitment to Apollo Credit Opportunity Fund II.

 Top Tier Capital Partners has closed on $202 million for its latest VC fund-of-funds, according to a regulatory filing. It is targeting upwards of $404 million.


 Denis Bovin has joined Evercore as a senior advisor, with a focus on the global tech and aerospace/defense markets. He is a former Bear Stearns investment banker who most recently served as CEO of Palimere Group.

 Marty Hanaka, former interim CEO of Guitar Center and former CEO of Golfsmith International Holdings, has joined Highland Consumer Partners as an operating partner.

 Michael Lysaght has stepped down as VP of engineering with SecondMarket, in order to become senior VP of digital product engineering with Weight Watchers International (NYSE: WTW).

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