Greetings from New York City, where it seems that everyone either is in line outside the NYSE or in line outside of an Apple store. Some assorted items before the weekend…
• What to watch: Today’s big Alibaba story will be where the stock opens and closes (and if there are no trading hiccups), but I’ll be curious to learn more about the IPO allocations. Did Alibaba spread the love evenly, or did it shut out some buysiders who didn’t realize they were beggars this time around? And for those who were shut out, what is their upper limit for getting in today? Lots of talk that mutual funds made out at the expense of hedge funds.
• Silicon Valley looks East (or West, if you'd like a shorter flight time): Altos Ventures, an 18 year-old Silicon Valley venture capital firm, has just finished raising a $60 million fund dedicated to South Korea-based startups, Fortune has learned. It is believed to be the largest Korea-focused fund ever raised by a U.S.-based VC shop.
“We’ve invested opportunistically in Korea for several years, but macro conditions have just gotten to a point where it made sense to do something on a dedicated basis,” explains Anthony Lee, an Altos Ventures partner. “There has been something like $60 billion in market cap created by Korean tech companies in the past decade but, with one or two exceptions, none of those companies took Western venture capital or private equity.”
A question, therefore, is if the next generation of Korean entrepreneurs will warm to a Silicon Valley-based firm like Altos. Lee believes they will, in part because many of them went to school in the U.S. and view Silicon Valley capital as a leg up operationally and a mark of validation.
Approximately 40% of the fund commitments came from Korean investors, and Altos opened an office in Seoul earlier this year. It is staffed with partner Han Kim, who relocated earlier this year, and new principal Hee-Eun Park, the co-founder and former CEO of mobile dating company IUM. Lee says that the fund will focus on what he refers to as “venture growth,” which primarily means companies doing their first institutional funding round, but which may already have revenue and profitability.
• Quiz time: Can you name the later-stage venture investor that has begun marketing its latest $1 billion+ fund? Hint: It had been less than 18 months since it raised its last $1 billion+ fund.
• Recommended reading: As regular Term Sheet readers know, these morning missives run on Dunkin’ (save for today, because I can’t find one near my hotel). So I took a special interest in a new Boston Globe Magazine piece on the secret world of Dunkin’ Donuts franchise kings. Some of them generate hundreds of millions of dollars in revenue per year. Or, put another way, more revenue than many of Silicon Valley's hotter tech startups. Here’s the full story.
• Have a great weekend. Go Pats!
THE BIG DEAL
• Alibaba Group raised nearly $21.77 billion in its IPO, pricing over 320 million shares at $68 per share (high end of upwardly-revised range). It is the largest U.S. IPO in history, topping Visa Inc.'s $19.7 billion offering in 2008. It could become the largest global IPO in history, if underwriters exercise their over-allotment. The Chinese Internet giant is expected to begin trading later this morning on the NYSE under ticker symbol BABA.
The $68 per share price gives Alibaba an initial market cap of $167.6 billion, making it one of the 30 largest publicly-traded U.S. companies. More coverage:
- NYSE President: How we're preparing for Alibaba
- Alibaba's IPO: Invest or stay away?
- Scott Cendrowski: Even hedge fund managers don’t really understand Alibaba
- Laura Lorenzetti: Everything you need to know about Alibaba and its IPO
- Laura Lorenzetti: Alibaba’s IPO has made Masayoshi Son Japan’s richest man
VENTURE CAPITAL DEALS
• Jack Erwin, a New York-based men’s shoe brand sold directly to customers, has raised $9 million in Series B funding. Brown Shoe Co. (NYSE: BWS) led the round, and was joined by Crosslink Capital, Shasta Ventures and FundersGuild. www.jackerwin.com
• SocialChorus, a San Francisco-based advocate marketing platform, has raised $7.5 million in Series B funding led by Kohlberg Ventures. www.socialchorus.com
• Odilo, a Spain-based provider of products for lending digital content to brick-and-mortar libraries, has raised €2.2 million in VC funding led by Active Venture Partners. www.newweb.odilo.es
• Genisphere LLC, a Hatfield, Penn.-based developer of a DNA nanotech platform, has raised $2 million in new VC funding from backers like Corporate Fuel Partners. www.genosphre.com
PRIVATE EQUITY DEALS
• GNC Holdings (NYSE: GNC), a Pittsburgh-based nutritional supplement retailer with a market cap of nearly $3.7 billion, has considered a possible sale in recent weeks after receiving private equity interest, according to the FT. Read more.
• KKR plans to acquire an additional 10% stake in Indonesian rice and noodle producer Tiga Pilar Sejahtera Food, bringing its stake up to 25%, according to Reuters. Read more.
• Lone Star Funds has agreed to acquire 38 U.S. hotels from Hyatt Hotels Corp. (NYSE: H) for approximately $590 million. Read more.
• PCI, a Philadelphia-based provider of healthcare development services, has acquired Biotec Services International, a UK–based provider of clinical trial services and temperature-controlled pharma services. PCI is majority-owned by Frazier Healthcare, while other shareholders include QIC Global Private Equity, Greenspring Associates and Thomas, McNerney & Partners. www.pciservices.com
• Revelstoke Capital Partners has acquired Transport Investments Inc., a Pittsburgh-based provider of flatbed, drop-deck, specialized and heavy-haul trucking and brokerage services in North America. No financial terms were disclosed, except that Yukon Partners provided equity co-investment and subordinated debt. www.thetii.com
• Sierra Oil & Gas, a Mexican exploration and production company, has secured $525 million in new equity commitments. Included are $225 million investments from both Riverstone Holdings and EnCap Investments, while Infraestructura Institucional committed the remaining $75 million.
• Calithera Biosciences, a South San Francisco-based developer of cancer therapeutics, has set its IPO terms to 6 million shares being offered at between $13 and $15 per share. It would have an initial market cap of approximately $222 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol CALA, with Citigroup and Leerink Partners serving as lead underwriters. Calithera has raised over $100 million in VC funding from Delphi Ventures (19.5% pre-IPO stake), Morgenthaler Ventures (18.3%), Advanced Technology Ventures (18.3%), Adage Capital Partners (18.1%), T. Rowe Price (7.2%), Wellington Management (6%) and Longwood Fund (5.8%). www.calithera.com
• Skylark Co., a Japanese restaurant-chain operator owned by Bain Capital, is planning to raise upwards of $742 million in a Tokyo flotation. Read more.
• Sky Solar, a Chinese owner and operator of solar energy parks, has filed for a $100 million IPO. It plans to trade on the Nasdaq under ticker symbol SKYS, with FBR and Cowen & Co. serving as lead underwriters. Shareholders include IDG-Accel China, which holds a 25.7% pre-IPO stake. www.skysolargroup.com
• The Carlyle Group has sold its minority stake in GDC Technologies, a Hong Kong-based digital cinema equipment manufacturer, to Huayi Brothers Media, according to Private Equity International. Yunfeng Capital and Mighty Capital also sold in the transaction, which was valued at upwards of $125 million. www.carlyle.com
• Oasis Beverages, a Russian beverages group, has agreed to acquire Los Angeles-based brewer Pabst Brewing Company, in a $700 million-plus deal that includes a minority investment of TSG Consumer Partners. The seller is C. Dean Metropoulos, which acquired Pabst Blue Ribbon in 2010 for $250 million. Perella Weinberg Partners managed the process. www.pabstbrewingco.com
• Arkema (Paris: AKE) has entered into exclusive talks to acquire the Bostik adhesives business of Total SA (Paris: FP) for around $2.2 billion. Read more.
• SAP (NYSE: SAP) has agreed to acquire Concur Technologies Inc. (Nasdaq: CNQR) for approximately $8.3 billion, or $129 per share (20% premium over Wednesday’s closing price). Read more.
FIRMS & FUNDS
• Draper Nexus Ventures, a U.S.-Japan cross-border VC firm, is raising upwards of $125 million for its second fund, according to a regulatory filing. It already has secured $29.3 million. www.drapernexus.com
• U.S. Venture Partners is raising upwards of $275 million for its eleventh fund, according to a regulatory filing. This is a significant step-down from the Menlo Park-based firm’s tenth fund, which closed on $625 million in mid-2008. www.usvp.com
MOVING IN, UP, ON & OUT
• Mark Murphy, a onetime operating officer with private equity firm McCown Deleeuw & Co., has been named CEO of grocery retailer Fairway Group Holdings Corp. (NASDAQ: FWM). www.fairwaymarket.com
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