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Term Sheet — Monday, November 3

Random Ramblings

The sun is shining, the elections are looming and I’m a bit distracted because today is E’s fourth birthday. In other words, time for some Monday Mouth-Off.

Today’s edition is devoted to last Thursday’s column on the disconnect between America’s economy and what Americans think about America’s economy. Tyler leads us off: “ I don’t think we mainstream Americans simply have a case of economic hypochondria. At least among people of my class and locale, I can honestly say things aren’t that great. Unemployment rate might be falling, but wages certainly haven’t improved. People still feel insecure in their jobs. Work-life balance is becoming extinct and for most people there is little to show for their efforts. It used to take a fair amount of intelligence, lots of hard work, and some luck to get ahead in life and to provide your children with a leg up. I think the amount of luck and intelligence needed to accomplish this today has increased.”

Justin concurs: “You made many good points, but you’re missing a vital causation for the thinking: Real wage growth. The median American citizen’s wages haven’t grown significantly. In fact, measured in real terms, it’s flat at best and even over a very significant time period. While official (u-3) unemployment numbers certainly speak of a broad recovery, a significant amount of median Americans remain *under-employed*, or at least know friends and family who are. Some of that can be seen in the U-6, some of it can’t be seen at all.”

Stewart: “To me, the answer is pretty simple. Households have deleveraged significantly. The overall ‘economy’ lags as a result of this, because people are deleveraging rather than fueling demand growth.”

Gerald: “Well said. You could have added that the federal deficit is the lowest it has been since 2008 before the stimulus and TARP programs.”

John: “As a communications pro, I’m simply baffled that those around the President and in the Democratic Party can’t more effectively articulate the string of successes you laid out. You hit the bull’s eye in talking about the economic PTSD that causes voters to distrust improvements. But you didn’t talk about wage and income stagnation. Nothing changes an outlook like a raise, and that’s just not been an experience for many Americans.”

Steve: “Isn’t it a bit ironic that our President and his party, who spend hundreds of hours on their soap boxes talking about how bad things are for all but the wealthy, may end up getting trounced in the elections because their constituents completely buy into the negative message.”

(A different) Justin: “Thoroughly enjoyed your column this morning. Thank you for always being as neutral as possible when discussing news items, and effectively communicating both sides of every story. I hate reading / watching / listening to most news in today’s constantly fearful society, but I really enjoy starting my day with Term Sheet each morning.”

Craig: “You’re a hack apologist for Democrats. Unsubscribe.”

I also wanted to point you to a pair of blog posts written by VCs, in response to recent Term Sheet columns. The first is from NEA partner Jon Sakoda, about the notion of VC funds having high ‘burn rates’ that rival those of their startups. You can read it here. The second is a take on my “love letter” to NYC’s startup scene, from Battery Ventures partner Neeraj Agrawal. Read it here.

Remember, you always can email me by just hitting Reply to these morning missives, or by sending a note to


• Yildiz Holding, a Turkish food group, has agreed to acquire British snack-maker United Biscuits from The Blackstone Group and PAI Partners. Prior news reports suggested the deal could be valued at around 2 billion pounds, with Ontario Teachers’ Pension Plan, Kellogg Co. (NYSE: K), and San Miguel Corp. (Philippines) among the bidders.



 Quanta Fluid Solutions Ltd., a UK-based provider of haemodialysis systems for renal patients, has raised £27 million in new VC funding. The venture arm of Air Liquide SA (Paris: AI) led the round, and was joined by Seventure Partners and return backers Wellington Partners, Seroba Kernel, NBGI Ventures, b-to-v Partners and IMI PLC.

• Joyent, a San Francisco-based provider of application containers in the enterprise, has raised $15 million in new VC funding. Return backers include Intel Capital, Orascom TMT Investments, El Dorado Ventures, EPIC Ventures and LGI Ventures. The company previously raised over $110 million, including an $85 million Series D round in 2012.

• RhodeCode, a San Francisco–based provider of enterprise software file-versioning and collaboration solutions, has raised $3.5 million in new VC funding from DFJ Esprit and Earlybird Venture Capital.

• Weaved Inc., a Palo Alto, Calif.-based developer of Internet-of-Things solutions, has raised $2.3 million in seed funding. Crunchfund led the round, and was joined by Metamorphic Ventures, Core Ventures, TMT Investments, Alpine Meridian Ventures, Double M Partners, HB Rama capital, Ironfire Angel Partners, Maxfield Capital Fund, Haystack Fund and Big Basin Partners.

• Pendo, a Raleigh, N.C.-based product engagement startup, has raised just over $1 million in seed funding co-led by Core Capital Partners and Contour Venture Partners. IDEAFund Partners and individual angels also participated.


• Denham Capital has made an initial equity commitment of $130 million to support the formation of Auctus Minerals, a Perth-based platform focused on developing operational mining assets throughout Australia, and improving the economics of existing projects.

• New Mountain Capital has agreed to acquire HealthPort, an Alpharetta, Ga.–based provider of access to confidential medical information for healthcare organizations and insurance payors, from ABRY Partners, No financial terms were disclosed.

• Shore Capital Partners has acquired and merged Oak View Animal Hospital (Pelham, Ala.) and Williams Animal Hospital (Murfreesboro, Tenn.), into a single animal hospital platform called Southern Veterinary Partners. No financial terms were disclosed. SVP will be based in Birmingham, Ala., and led by CEO Jay Price.

• Symphony Technology Group has completed its previously-announced $320 million purchase of McGraw Hill Construction from McGraw Hill Financial (NYSE: MHFI).

• Thrive Nutritious Ice Cream, a Winter Park, Fla.-based “nutritional ice cream company,” has raised an undisclosed amount of growth equity funding from Stonehenge Growth Equity Partners.

• Wellspring Capital Management has acquired Qualitor Inc., a Southfield, Mich.–based provider of branded aftermarket safety and wear products for the automotive aftermarket, from HCI Equity Partners. No financial terms were disclosed.


• Cnova NV, the global ecommerce unit of French retailer Casino (Paris: CO), has set its IPO terms to 26.8 million shares being offered at between $12.50 and $14 per share. It would have an initial market cap of approximately $6.14 billion, were it to price at the top of its range. The company plans to trade on the Nasdaq under ticker symbol CNV, with Morgan Stanley and J.P. Morgan serving as lead underwriters. Cnova reports a $31 million net loss on nearly $4 billion in 2013 revenue.

• Reval Holdings, a New York-based provider of treasury and risk management SaaS solutions, has withdrawn registration for a $75 million IPO due to “unfavorable market conditions.” BofA Merrill Lynch and Stifel Nicolaus Weisel were serving as lead underwriters, while company backers include North Bridge Venture Partners and Commonwealth Capital Ventures.

• PRA Health Sciences Inc., a Raleigh, N.C.-based contract research organization for the biotech and pharma markets, has set its IPO terms to 18.6 million shares being offered at between $20 and $23 per share. It would have an initial market cap of approximately $1.23 billion, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol PRAH, with Jefferies serving as left lead underwriter. PRA Health Sciences is owned by KKR, and reports a $14 million net loss on $712 million in revenue for the first six months of 2014.

• Virgin America, a Burlingame, Calif.-based air carrier backed by Cyrus Capital Partners and Virgin Group, has set its IPO terms to 3.34 million shares being offered at between $21 and $24 per share. It would have an initial market cap of approximately million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol VA, with Barclays and Deutsche Bank Securities serving as lead underwriters. Virgin America reports $56 million of net income on $1.12 billion in revenue for the first nine months of 2014, compared to a $4 million net loss on $1.06 billion in revenue for the year-earlier period.


• Aetna (NYSE: AET) has agreed to acquire Bswift, a Chicago–based provider of cloud-based technology and services for employee benefits. The deal is valued at approximately $400 million. Great Hill Partners invested $51 million for a minority equity stake in Bsift earlier this year.

• Arbor Investments has sold MidCon Holdings LLC, a Franksville, Wis.-based maker of corrugated packaging and display products, to Green Bay Packaging. No financial terms were disclosed.

• Publicis Groupe (Paris: PUB) has agreed to acquire Boston-based marketing company Sapient (Nasdaq: SAPE) for $3.7 billion in cash, or approximately $25 per share (44.34% premium to Friday’s closing price). Read more.

• RTL Group, a listed European entertainment network backed by Bertelsmann, has acquired a control stake in StyleHaul, a Los Angeles-based online video network focused on makeup and style tutorials, for $107 million. The deal also includes up to $20 million in additional earnouts. StyleHaul previously raised VC funding from RTL and Bertselsmann, plus additional funding from Juvo Capital, RezVen Partners and Wavemaker Partners.


• Altice SA (Amsterdam: ATC) has offered to acquire the Portuguese assets of listed Brazilian telecom company Oi SA for approximately €7 billion. Read more.

• Cardtronics Inc. (Nasdaq: CATM) has acquired Sunwin Services Group, a UK-based provider of cash logistics and ATM maintenance to the Co-op Food ATM network. No financial terms were disclosed.

• Evercore Partners has acquired ISI International Strategy & Investment, a New York-based investment research and management firm. No financial terms were disclosed. Evercore said that the deal will help it initially provide macro research and coverage of around 60% of S&P 500 companies.

• LabCorp (NYSE: LH) has agreed to acquire Covance Inc. (NYSE: CVD), a Princeton, N.J.-based provider of drug development services, for $6.1 billion in equity (enterprise value of approximately $5.6b). The deal is valued at $105.12 in cash and stock, representing a 32% premium to Friday’s closing price.

• Redfin, a Seattle-based online real estate company, has acquired Walk Score, an “online service started to score homes based on their walking distance from restaurants, groceries and bars.” No financial terms were disclosed. Redfin has raised nearly $100 million in VC funding from DFJ, Greylock, CrunchFund, Tiger Global, Globespan Capital Partners, T. Rowe Price, The Hillman Co., Vulcan Capital and Madrona Venture Group.


• Blue Point Capital Partners, a Cleveland-based private equity firm focused on the lower middle-markets, has closed its third fund with $425 million in capital commitments.


• Ian Bell and Manda Chan have joined Evercore as Hong Kong-based members of its private funds group. Bell will serve as a managing director, and previously was with Credit Suisse, while Chan was with MVision Private Equity Advisors.

• Jami Miscik, a former deputy director for the CIA, has joined the board of Morgan Stanley. She currently serves as president and vice chairman of Kissinger Associates.

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