Random Ramblings
Russia is not a place where Western private equity wants to play right now. Too much conflict, too many sanctions. Blackstone said that it was “giving up” on the country earlier this month, while a group of ex-Goldman Sachs bankers previously abandoned plans for a $2 billion emerging markets fund that was expected to have a major Russian allocation. And then there are the PE bigs who either are leaving the advisory board of the $11 billion state-owned Russian Direct Investment Fund, or who are at least reconsidering their involvement.
So why is Nordic private equity firm CapMan not only maintaining its Moscow team, but this morning announcing that it has closed its second Russia-focused fund with nearly €100 million in capital commitments?
Jerome Bouix, CapMan’s head of biz dev and investor relations, tells me that most of the fundraising occurred last year (i.e., before Russia’s annexation of Crimea), acknowledging that many promising leads dried up as the geopolitical situation intensified in 2014. But he says that none of the 2013 commitments bailed, and argues that the sanctions should not be too problematic for the fund, which focuses on “consumer-driven” small and mid-sized companies inside of Russia.
For starters, the Russian consumer isn’t going anywhere. Second, some of these companies actually are in an improved position today, as a combination of sanctions and the ruble’s devcaluation have made locally-produced goods more affordable than rival imports. Third, many of CapMan’s historical exits of Russian portfolio companies were trade sales to Russian buyers (of course, many were not, which seems to be a plausible cause for concern).
“We started in Russia in 1996, and have had a lot of similar discussions in years like 1998 and 2000,” Bouix explains. “We are confident that the companies were are investing in will find buyers in the future.”
• Update #1: On Friday we discussed the insider trading indictment for Jim Mazzo, a venture partner with Versant Ventures and chairman and CEO of biotech startup AcuFocus. Among our questions is why Versant hired Mazzo in the first place, given that he already was subject of a civil complaint for insider trading from the SEC.
Following our piece, Versant sent over the following statement: "Upon learning of the indictment of Mr. Mazzo, Versant and Mr. Mazzo have mutually agreed that he will suspend any activities as a Versant Operating partner until he has resolved the legal matters. We have no other comment." It appears that he will maintain his role with AcuFocus, which is a Versant portfolio company.
• Update #2: One year ago, we reported that Madison Capital Funding, a mid-market lending subsidiary of New York Life Management, had ousted CEO Trevor Clark after allegedly violating NYLIM policies related to personal investments. Also out was senior managing director and fellow Madison co-founder Chris Williams. Today, the pair resurfaced as heads of a new middle-market direct lending business for Angelo, Gordon & Co.
When asked for comment, an Angelo Gordon spokesman said: "We conducted extensive due diligence on the team and opportunity and are thrilled they are joining Angelo Gordon. We won't comment on their departure from New York Life."
• Go Pats!
THE BIG DEAL
• Encana Corp. (NYSE: ECA) has agreed to acquire Athlon Energy Inc. (NYSE: ATHL), a Fort Worth, Texas-based oil and gas company focused on the Permian Basin, for approximately $7.08 billion (including the assumption of $1.15b in debt). The $58.50 per share deal represents a 25.18% premium over Friday’s closing price. Apollo Global Management holds nearly a 26% stake in Athlon Energy. Read more.
VENTURE CAPITAL DEALS
• Credit Karma, a San Francisco-based provider of consumer credit score tracking solutions, has raised $75 million in new VC funding from existing backers Google Capital, Tiger Global Management and Susquehanna Growth Equity. Those firms had participated in an $85 million Series C round just eight months ago, alongside Ribbit Capital. www.creditkarma.com
• Anki Inc., a San Francisco-based developer of AI-based robotic games and products, has raised $55 million in Series C funding. J.P. Morgan led the round, and was joined by return backers Andreessen Horowitz, Index Ventures and Two Sigma. The company previously raised $50 million. www.anki.com
• Dollar Shave Club, a subscription razor delivery service, has raised $50 million in Series C funding led by TCV. The company previously raised more than $22 million from Pritzker Group Venture Capital, Venrock, Kleiner Perkins Caufield & Byers, Andreessen Horowitz and Shasta Ventures. www.dollarshaveclub.com
• Fundrise, a Washington, D.C.-based real estate crowdfunding platform, has raised $38 million in Series A funding. Backers include Guggenheim Partners and individual investors like Justin Elghanayan (Rockrose president) and James Ratner (chairman and CEO of Forest City Commercial Group). www.fundrise.com
• InnoLight Technology Corp., a Suzhou, China-based provider of cloud computing optical transceivers, has raised $38 million in Series C funding co-led by Google Capital and Lightspeed China Partners. Existing shareholders include Oriza Holdings and Acorn Campus. www.innolight.com
• Qubit, a London-based ecommerce personalization platform, has raised $26 million in Series B funding. Accel Partners led the round, and was joined by Balderton Capital and Salesforce Ventures. www.qubit.com
• Huy Vietnam Group Ltd., a restaurant chain in Vietnam, has raised $15 million in Series B funding from unidentified institutional investors and family offices from Malaysia, Korea and Hong Kong. www.huyvietnam.com
• Nubank, a Brazilian financial services startup that offers a digital credit card, has raised $14.3 million in new VC funding led by Sequoia Capital (which had not previously backed a Brazilian startup). Kaszek Ventures also participated in the round, alongside entrepreneur Nicolas Berggruen. www.nubank.com.br
• Context Relevant, a Seattle-based developer of automated predictive analytics software, has raised $13.5 million in Series B-1 funding. Backers include Goldman Sachs, BofA Merrill Lynch, Formation8, New York Life and Bloomberg Beta. www.contextrelevant.com
• Array Health, a Seattle-based provider of private health insurance exchange technology, has raised $13 million in VC funding. Noro-Moseley Partners led the round, and was joined by Vocap Investment Partners. Healthcare Growth Partners served as placement agent. www.arrayhealth.com
• Privcap Media, a New York-based digital communications company serving the private capital markets, has raised $1.3 million in second-round funding from undisclosed institutional and individual investors. www.privcap.com
• Comprimato, a Czech Republic-based provider of compression solutions, has raised €1 million in new VC funding from existing backers Credo Ventures and Y Soft Venture Capital. www.comprimato.com
• Agrisoma Biosciences Inc., a Quebec-based commercializer of a non-food oilseed crop designed for biofuel production, has held a first closing on a Series A round designed to raise a total of C$8 million. Cycle Capital Management led the deal, and was joined by return backer BDC Venture Capital. www.agrisoma.com
PRIVATE EQUITY DEALS
• The Canada Pension Plan Investment Board has invested $325 million to become a “major equity partner" of 21st Century Oncology Holdings Inc., a Fort Myers, Fla.-based provider of radiation therapy and other services to cancer patients in the United States and Latin America. 21st Century Oncology is majority-owned by Vestar Capital Partners. www.rtsx.com
• The Carlyle Group has agreed to acquire a 75.05% stake and operational control of Southeast PowerGen, a portfolio of six natural gas-fired power plants in Georgia, from ArcLight Capital Partners and GIC. No financial terms were disclosed. www.carlyle.com
• Standard Chartered Private Equity has invested $60 million for a “significant minority stake” in An Giang Plant Protection Joint Stock Co., a Vietnamese distributor of rice seeds and plant protection chemicals. www.agpps.com.vn
• Treasury Wine Estates Ltd. (ASX: TWE) has rejected a pair of private equity takeover offers that would have valued the Australian wine-maker at around A$3.4 billion, saying the valuation was too low and the transaction would require too much leverage. One bid came from KKR and Rhone Capital, while the other came from TPG Capital. Read more.
• Vista Equity Partners has agreed to acquire TIBCO Software Inc. (Nasdaq: TIBX), a Palo Alto, Calif.-based provider of enterprise infrastructure and business intelligence software. The deal is valued at approximately $4.3 billion (including the assumption of debt), or $24 per share. Goldman Sachs managed the sale process, which had included interest from Thoma Bravo. www.tibco.com
IPOs
• Dave & Buster's, a Dallas-based restaurant and arcade chain owned by Oak Hill Capital Partners, has set its IPO terms to 5.88 million shares being offered at between $16 and $18 per share. It would have an initial market cap of approximately $664 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol PLAY, with Jefferies and Piper Jaffray serving as lead underwriters. Dave & Buster’s 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. It 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
• The Emaar Malls Group, a Dubai-based shopping mall operator, raised around $1.58 billion in an IPO in the UAE. Read more.
• Evraz North America Ltd., a maker of engineered steel products for the rail, energy and industrial end markets, has filed for a $100 million IPO. Citigroup and Goldman Sachs are serving as lead underwriters. It reports $40 million in net income on around $1.58 billion in revenue for the first six months of 2014. The business is being spun out of Elvraz PLC (LSE: EVR). www.evraz.com
• PQ HoldingsInc., a Malvern, Penn.-based specialty inorganic chemicals company, has withdrawn registration for a $450 million IPO. The move comes after CCMP Capital Advisors agreed to acquire a 47% stake in the company from The Carlyle Group, which will maintain the other 53% (alongside INEOS and company management). www.pqcorp.com
EXITS
• AMAG Pharmaceuticals (Nasdaq: AMAG) has agreed to acquire Lumara Health Inc., a Chesterfield, Mo.–based pharmaceutical company specializing in women’s health, for upwards of $1.025 billion. The deal includes an upfront payment of $675 million ($600m in cash, $75m in stock) and up to $350 million in sales milestone-based earnouts. Lumara previously was known as K-V Pharma, and was brought out of bankruptcy last year via a $375 million recapitalization led by Capital Ventures International, Greywolf Capital, Kingdon Capital, Deutsche Bank and Silver Point Finance. www.lumarahealth.com
• Amazon (Nasdaq: AMZN) has completed its previously-announced $1.1 billion acquisition of Twitch Interactive Inc., a San Francisco–based live video platform for gamers. Twitch originally was launched as Justin.tv, raising more than $8 million in VC funding from Y Combinator, Alsop Louie Ventures and Felicis Ventures. It later changed strategy (and name), raising another $35 million from Bessemer Venture Partners, Thrive Capital, Alsop Louie, WestSummit Capital, Draper Associates and Take-Two Interactive Software. www.twitch.tv
• Blue Point Capital Partners has sold its stake in JTM Foods LLC, an Erie, Penn.-based maker of branded and private label snack foods. No financial terms or buyer information were disclosed. www.jtmfoods.net
• Daiichi Sankyo Co. (Tokyo: 4568) has agreed to acquire Ambit Biosciences (Nasdaq: AMBI), a San Diego-based drug company whose lead candidate focuses on acute myeloid leukemia, for $315 million in cash on a fully-diluted basis, or $15 per share. Ambit shareholders include Foresite Capital (11.55% stake), Aisling Capital (9.18%), OrbiMed Advisors (8.28%), Apposite Capital (7.37%) and Roche Holding (5.96%). www.ambitbio.com
• Hellman & Friedman has hired Rothschild to find a buyer for SSP Holdings, a UK-based provider of software solutions for the insurance industry, according to peHUB. Read more.
• Kohlberg Kravis Roberts and CVC Capital Partners have hired Credit Suisse to run a sale process for Van Gansewinkel Group, a Dutch waste management business, according to Private Equity International. No word yet on the asking price, except that the company has €680 million debt on its balance sheet and was originally acquired for €2.2 billion (including a big bolt-on). www.vangansewinkelgroep.com
• Sabra Health Care REIT Inc. (Nasdaq: SBRA) has acquired 21 independent living facilities located in 15 states from affiliates of Holiday Acquisition Holdings Corp., a portfolio company of Fortress Investment Group, for $550 million in cash. www.sabrahealth.com
• SK Planet (South Korea) has agreed to acquire Shopkick, a Redwood City, Calif.-based in-store shopping app. No financial terms were disclosed. Shopkick has raised around $15 million in VC funding from Greylock, Citigroup, Kleiner Perkins and SV Angel. www.shopkick.com
OTHER DEALS
• Alibaba Group (NYSE: BABA) has acquired a 15% stake in Beijing Shiji Information Technology, a Chinese provider of technology solutions to the hospitality market, for approximately $459 million. Read more.
• Gaw Capital Partners led the £191 million acquisition of London’s Exchange Tower from BlackRock. www.blackrock.com
• Gramercy Funds Management has invested $34 million into Credivalores-Crediservicios, a Colombia-based consumer finance company. www.gramercy.com
• SoftBank has offered to acquire animation studio DreamWorks Animation (Nasdaq: DWA) for $3.4 billion, according to The Hollywood Reporter. Read more.
FIRMS & FUNDS
• Magma Venture Partners, an early-stage Israeli VC firm, has closed its fourth fund with $150 million in capital commitments. www.magmavc.com
• Roark Capital Partners, an Atlanta-based private equity firm focused on the middle-markets, is raising upwards of $2.5 billion for its fourth fund, according to a regulatory filing. The firm currently is investing out of a $1.5 billion third fund that closed in 2011. www.roarkcapital.com
MOVING IN, UP, ON & OUT
• Jason Rhodes has joined Atlas Venture as a partner on its life sciences team, effective October 1. He is the current president and CFO of Epizyme (Nasdaq: EPZM). www.atlasventure.com
Share today's Term Sheet:
http://fortune.com/2014/09/29/term-sheet-monday-september-29
