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Term Sheet — Thursday, September 18

September 18, 2014, 1:58 PM UTC

Random Ramblings

Greetings from New York City, where I'm in town for a series of meetings and requisite face time. Here are some quick notes (and a TON on news) before I head over to Fortune HQ:

 Big tease: Blackstone Group president Tony James is speaking at a Thomson Reuters conference this morning, and said that the firm is currently working on private equity deals in the $30 billion to $40 billion range, but was quick to add that they might not happen.

 Activism: Nelson Peltz's Trian Fund Management has been pushing to break up DuPont, arguing that current management has failed to drive adequate growth. Case in point is DuPont’s coatings business, which was renamed Axalta after being acquired in 2012 by The Carlyle Group.

In its letter to DuPont’s board, Trian writes: “At the time [of the sale], Coatings generated $339 million of EBITDA (earnings before interest, taxes, depreciation and amortization). Today, that same business (now called Axalta) generates $813 million of EBITDA, an improvement of 140% as the private equity owners have reduced unnecessary costs… The Axalta S-1 discloses that pro forma EBITDA in 2011 was $568 million, $229 million (or 67%) higher than the $339 million originally reported by DuPont in the same year. This implies that DuPont burdened the Coatings segment with $229 million of excess corporate costs in 2011 (representing over 5% of Coatings sales at the time).”

DuPont’s reply is that the sale created value for shareholders, but kind of side-steps the issue of why it couldn’t keep Coatings in-house and make the same changes Carlyle did.

 Looking ahead: There are now 11 companies scheduled to price IPOs next week, once Alibaba's massive offering is out of the way. Included are a pair of $1 billion+ offerings from Citizens Financial Group and Colombia's Grupo Aval Acciones. 

Back again: David Santoni has quietly returned to Lazard Middle Market as a managing director, a role he held from 2007-2009 before leaving to join Prestwick Partners. He also has been working to help 'on-leave' Lazard Middle Market exec Mike McFadden in his long-shot campaign to defeat Minneasota Sen. Al Franken this November.

Big deal: Today's big deal is that Denver-based identity security company has raised $35 million in late-stage VC funding led by KKR. Word is that the KKR commitment came from a combination of balance sheet and partner capital, but that the firm continues to think about raising a dedicated growth-stage tech fund. 

Follow-up: Earlier this week, I wondered what the CalPERS decision to bail on hedge funds would mean for private equity. After more consideration, my conclusion is: Not much. Here's more.

 Who’s in? Fortune today unveiled its annual list of the Most Powerful Women in business. Four financial types made the cut: Abigail Johnson (#9), president of Fidelity Investments; Mary Erdoes (#32), CEO of JPMorgan Asset Management); Carrie Tolstedt (#34), senior EVP of community banking with Wells Fargo; and Kathy Murphy (#42), president of Fidelity Personal Investing. View the full list here. And he sure to sign up for The Broadsheet, our morning newsletter focused on the Most Powerful Women (and those who aspire to join them).



 Ping Identity, a Denver-based identity security company, has raised $35 million in new VC funding. KKR led the round, and was joined by Ten Eleven Ventures (new fund founded by Alex Doll) and return backers Draper Fisher Jurvetson, General Catalyst Partners, SAP Ventures, W Capital Partners, Volition Capital, Triangle Peak Partners and Appian Ventures. Ping has now raised $110 million in total funding. 





 LightSpeed Retail, a Montreal-based commerce platform for retailers, has raised C$35 million in second-round funding. iNovia Capital led the round, and was joined by return backer Accel Partners.

 Colorescience, a Carlsbad, Calif.-based provider of makeup and skincare products, has raised $15 million in Series B funding. Longwood Fund led the round with a $7.5m investment, and was joined by return backers Montreaux Equity Partners and Split Rock Partners.

 ClassPass Inc., a New York-based website for discovering and booking fitness classes, has raised $12 million in Series A funding co-led by angel investors Fritz Lanman and Hank Vigil.

 Swrve, a San Francisco-based provider of mobile marketing automation solutions, has raised $10 million in Series B funding. Acero Capital led the round, and was joined by return backers Atlantic Bridge and Intel Capital. 

 AtWith, a Tel Aviv-based platform that helps people throw dinner parties for both friends and strangers, has raised $8 million in Series A funding led by Greylock Partners.

 Placemeter has raised $6 million in Series A funding. New Enterprise Associates led the round, and was joined by Qualcomm Ventures. Placemeter is a New York-based startup that is using computer vision algorithms to build a real time data layer around locations, streets and neighborhoods. 

 Gousto, a London-based recipe box delivery company, has raised £5 million in Series A funding. Unilever Ventures led the round, and was joined by return backer MMC Ventures.

 ShiftPlanning, a British maker of a cloud-based employee scheduling application, has raised $3.2 in new VC funding co-led by existing backers Point Nine Capital and MHS Capital.

 Shuttlerock, a New Zealand-based visual marketing software company, has raised $2.35 million in Series A funding. Backers include Opt (Japan) and individual angels like Paul Bingham and Gary McCormick.

 HowGood, a New York-based in-store rating system for food information, has raised $2 million in seed funding from FirstMark Capital, Highline Ventures, Serious Change, Jake Lodwick and Joanne Wilson.

 CyActive, an Israeli predictive cyber security startup, has raised an undisclosed amount of strategic VC funding from Siemens Venture Capital.

 Hampton Creek Foods, a San Francisco-based developer of plant-based egg ingredients for food companies, is in market trying to raise $50 million at around a $300 million valuation, according to TechCrunch. The process may have just been made more difficult, however, by Ali Partovi leaving as chief strategy officer at Hampton Creek after just one week on the job. The company previously raised around $30 million in VC funding from Horizons Ventures, AME Cloud Ventures, individual angels and return backers Khosla Ventures, Collaborative Fund and Eagle Cliff. Read more


 Audax Group has acquired Chase Doors, a Cincinnati–based provider of made-to-order specialty door systems, from Sentinel Capital Partners. No financial terms were disclosed, except that Golub Capital provided debt facilities.

 Delta Data Software, a Columbus, Ga.-based provider of mutual fund trading, data management and other SaaS solutions to the financial services market, has raised an undisclosed amount of growth equity funding led by Accel-KKR.

 Ripplewood Holdings has agreed to acquire the Latvian government’s 75% stake in Baltic lender Citadele Banka AS for an undisclosed amount. Read more. 

 Shamrock Capital Advisors has acquired Questex, a Newton, Mass.–based business information and events company. No financial terms were disclosed.

 Topspin Partners has acquired Patch Products, a Beloit, Wis.-based maker of family entertainment products like games and puzzles. No pricing terms were disclosed for the deal, which was supported by debt and equity financing from Balance Point Capital Partners.

 Valence Surface Technologies, an acquisition platform sponsored by Trive Capital, has acquired Blue Streak Finishers, an Everett, Wash.-based metal finishing company specializing in processing and related services for large complex aerostructures. No financial terms were disclosed.


 Cone Midstream Partners LP, a Canonsburg, Penn.-based 50/50 joint venture between Consol Energy (NYSE: CNX) and Noble Energy (NYSE: NBL) to own pipeline in the Marcellus Shale, has set its IPO terms to 17.5 million shares being offered at between $19 and $21 per share. It would have an initial market cap of approximately $402.5 million, were it to price in the middle of its range. Cone Midstream plans to trade on the NYSE under ticker symbol CNNX, with Wells Fargo, BofA Merrill Lynch and Baird serving as lead underwriters.

 The Hoyts Group, an Australian cinema chain owned by Pacific Equity Partners, is beginning to prep an IPO that could value the company at around A$900 million, according to Reuters. Read more

 OV Group, a Luxembourg–based offshoring  services company owned by IK Investment Partners, has picked J.P. Morgan and Morgan Stanley to lead a Hong Kong listing that could value the company at around $900 million, according to Reuters. Read more

 Tokai Pharmaceuticals Inc., a Cambridge, Mass.-based developer of prostate cancer drugs, raised $97 million in its IPO. The company priced 6.5 million shares at $15 per share, compared to plans to offer 5.4 million shares at between $13 and $15 a piece. It began trading on the Nasdaq under ticker symbol TKAI (closing 58% higher), with BMO Capital Markets, Stifel and William Blair serving as lead underwriters. Shareholders in the pre-revenue company include Apple Tree Partners (49.15% pre-IPO stake) and Novartis Ventures (28.12%).

 Vivint Solar, a Provo, Utah-based provider of distributed solar energy to residential customers, has set its IPO terms to 20.6 million shares being offered at between $16 and $18 per share. It would have an initial market cap of approximately $1.79 billion, were it to price in the middle of its range. The company plans to trade on the NYSE under ticker symbol VSLR, with Goldman Sachs, BofA Merrill Lynch and Credit Suisse serving as co-lead underwriters. Vivint Solar is owned by The Blackstone Group, and reports a $76 million net loss on around $10 million in revenue for the first six months of 2014.

 Weststar Aviation Services Sdn Bhd, a helicopter transport company partially owned by KKR, is prepping a $500 million IPO in Malaysia, according to Dow Jones. Read more.


 Anixter International Inc. (NYSE: AXE) has acquired Tri-Northern, a Woodbury, N.Y.–based distributor of security, data communications and low-voltage technology products, from Audax Group for $420 million. BlackArch Partners managed the process.

 Cisco Systems (Nasdaq: CSCO) has agreed to acquire Metacloud Inc., a Pasadena, Calif.-based provider of private cloud solutions for large enterprises. Metacloud had raised in VC funding, from Storm Ventures, Canaan Partners, AME Cloud Ventures, Pelion Venture Partners, Silicon Valley Bank and UMC Capital. No financial terms of the acquisition were disclosed, but Storm Ventures partner Jason Lemkin referred to it as an “epic exit” on Twitter.

 Enfoca has agreed to sell Peruvian home improvement chain Maestro for approximately $490 million to Chile-based retailer Falbella. Enfoca is a Peru-based private equity firm. Read more

 Red Hat Inc. (NYSE: RHT) has agreed to acquire FeedHenry, an Ireland–based enterprise mobile app platform provider, for 63.5 million in cash. FeedHenry had raised around $9 million in VC funding from Kernel Capital Partners, Intel Capital, VMWare, Enterprise Ireland and ACT Venture Capital.

 UBM PLC (LSE: UBM), a UK-based events and communications group, said that it’s in talks to acquire Advanstar, a Santa Monica, Calif.–based trade show organizer currently controlled by Anchorage Capital Group, Ares Management and Veronis Suhler Stevenson. Reuters reports that the deal could be valued at around $900 million. Read more.


 Bayer AG plans to spin off its polymer business into a new public company called MaterialScience. Read more

 Cox Enterprises has acquired Experience, maker of a mobile app that helps attendees of sporting events and concerts to upgrade their seats and experience VIP opportunities. The deal is valued at more than $200 million.

 Sulzer (SWX: SUN), a Swiss maker of oil pumps and related products and services, is in talks to acquire Houston-based oil services equipment maker Dessser-Rand (NYSE: DRC), according to the NY Times. A deal could be valued north of $5.5 billion, with Morgan Stanley managing the process. Read more


 Aglaia, a Dutch venture capital firm, has held a $65 million interim close on its second oncology-focused fund. It is targeting upwards of $100 million total.

The Blackstone Group is targeting between $7 billion and $8 billion for its next Tactical Opportunities fund, according to peHUB. Read more


 The California Public Employees’ Retirement System (CalPERS) named Ted Eliopoulos as its next chief investment officer, a position in which he had been serving in an interim basis.

 Kumber Husain has joined Morgan Stanley Alternative Investment Partners as an executive director focused on private equity secondaries, according to LBO Wire. He previously was a senior VP with WPP Global Partners.

 David Dvorin has quietly joined TPG Capital as a senior advisor. He previously spent four years with Welsh Carson Anderson & Stowe as a senior operating executive focused on pricing and revenue. Before that, he held strategic pricing roles with both Thermo Fisher Scientific and American Greetings.

 Sky Kurtz has stepped down as a San Francisco-based vice president with Francisco Partners, in order to become CEO of Mateen Corp., a Dubai-based subsidiary of New Zealand’s Pultron Composites.

Sarah Reed has joined MPM Capital as general counsel. She previously served in the same role with Charles River Ventures.

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