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Term Sheet — Tuesday, November 4

November 4, 2014, 2:43 PM UTC

Random Ramblings

It seems that Gerry Cardinale and Earl Rotman aren’t birds of a feather.

Late last year, the two veteran bankers teamed up to form RedBird Capital Partners, a private equity firm that would focus on control deals for growth-oriented companies, plus selective early-stage opportunities.

Cardinale was a longtime Goldman Sachs banker, where he was known primarily for sports deals like Goldman’s investment in YES Network and Alex Rodriguez’s absurd contract with the NY Yankees. Most recently he had spent a year in Chicago with Byron Trott’s BDT Capital. Rotman had co-founded Genuity Capital Markets in 2005, before merging it with Canaccord Financial Inc. (where he would serve as vice chairman of investment banking). The two previously had worked together on a Canadian media transaction, and reportedly were seeking $400 million for their debut fund.

Since then, RedBird has busted through its target. According to updated SEC registration docs, the firm already has secured nearly $618 million in capital commitments — including $500 million from an unidentified investor based outside the U.S. But Rotman is no longer listed on any of the documents.

No word yet on what triggered the departure, with one source simply saying that it “wasn’t a good fit.” That source adds that the fundraising effort is not yet concluded, although no word yet on what type of hard cap RedBird might have set.

With Rotman gone, Cardinale is now the sole owner of RedBird and managing member of its funds. But he does have some new investment help, hiring managing directors Hunter Carpenter and Robert Covington out of The Stephens Group. RedBird also has hired private equity veteran Thomas Mastrobuoni as chief financial officer and chief compliance officer.

To date, RedBird has made one deal: TierPoint (a.k.a. Cequel Data Centers), as part of an investor consortium that also includes The Stephens Group.

Ballot box: Just a reminder that plenty of private equity and venture capital alums are on the ballot today. The only Democrat is Gina Raimondo (ex-Point Judith Capital) in the Rhode Island governor's race, while the Republicans are: Bruce Rauner (ex-GTCR) for Illinois governor; Mike McFadden (Lazard Middle Market) for U.S. Senate in Minnesota and Charlie Baker (ex-General Catalyst) for Massachusetts governor. And, if you want to go way back, Sen. Mark Warner (ex-Columbia Capital) is running for reelection in Virginia. With the exception of McFadden (who is expected to get smoked by Sen. Al Franken), each candidate is locked in a race that is expected to be decided by single-digit percentage points.

Recommending reading: Charlie O'Donnell of Brooklyn Bridge Ventures has put up a blog post asking if VCs are too thin-skinned: "We are in a media culture where we're supposed to give everyone pats on the head for entrepreneurship, when there are legitimate criticisms to be had about the high profile investments we read about all the time. For the most part, journalists give startups a free pass when venture capital money is raised or when companies that clearly seem to have failed get 'acquired.' It's just not cool these days to say anything bad about the business side of startups unless you cross over into the "Big enough to pick on" world, like an Uber." Read the full post here (and don't ignore the comments).

Returns data: College and university endowments were on the rise in fiscal 2014, according to preliminary data from Commonfund and NACUBO. The annual survey of 426 endowments found an average 15.8% return net-of-fees for fiscal 2014 (ending 6/30/14), compared to 11.7% for 2013.

Within that, alternative asset returns climbed to 12.8% from 8.3%. Digging even deeper, venture capital produced a 21.2% return in fiscal 2014, with energy/nat resources producing 18.4%, private equity at 17%m, distressed debt at 13.5%, PE real estate at 11.7% and marketable alternatives (hedge, etc) at 9.4%. Average allocations to alternatives grew from 53% to 58%.

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 Butterfly Network, a Guilford, Conn.-based medical imaging startup that was incubated by 4Combinator, has raised over $100 million in VC funding. Backers include Aeris Capital and Stanford University.



 Xiaomi, a Chinese maker of mobile phones and consumer electronics, is raising new funding at a valuation of between $40 billion and $50 billion, according to Bloomberg. Read more.

 MX Inc. (f.k.a. MoneyDesktop), a Provo, Utah-based provider of omnichannel personal banking tools for financial institutions, has raised $20 million in VC funding. Backers include TTV Capital, North Hill Ventures, Commerce Ventures, Peak Ventures and individual angels like Rick Alden (Skullcandy), Zach James (Zefr), Todd Pederson (Vivint) and Josh James (Domo & Omniture).

 Nitro, a San Francisco-based document productivity company, has raised $15 million in new VC funding from Battery Ventures.

 Namely, a New York-based maker of human resources software, has raised a $12 million in Series B funding. Matrix Partners led the round, and was joined by return backers True Ventures, Lerer Ventures and Bullpen Capital. Read more.

 Avegant Corp., an Ann Arbor, Mich.-based maker of eye retina-based electronic devices to view video, has raised $9.37 million in Series A funding, according to the WSJ. Intel Capital and South Korea's NHN Investment co-led the round. Read more., a Pakistan-based online marketplace and review site for cars and bikes, has raised $3.5 million in VC funding from Malaysia’s Frontier Digital Ventures.

 Paracosm, a Gainesville, Fla.-based developer of 3D reconstruction technologies for creating digital models of physical spaces, has raised $3.3 million in seed funding. Atlas Venture led the round, and was joined by iRobot, Osage University Partners, BOLDstart Ventures, New World Angels, Deep Fork Capital and individual angels.

 DeltaDNA, a Scotland-based analytics and game personalization platform, has raised $3 million in new Series A funding. Edge Performance VCT was joined by return backers Par Equity, STV Group PLC and Scottish Investment Bank. The round total is now $5 million.

 Blueshift Labs, a San Francisco-based marketing SaaS company, has raised $2.6 million in seed funding co-led by NEA and Nexus Venture Partners.

 Emaze, an Israeli online presentation platform, has raised $2 million in Series A funding from FirstTime Venture Capital., a Seattle-based online community for matching dog owners with in-home dig sitters, has raised an undisclosed amount of new VC funding from A-GRade Investments. This comes on top of a recent $12 million Series C investment from Menlo Ventures, Madrona Venture Group, Foundry Group and PetcoTM.


 BlueSnap, a Waltham, Mass.-based global payment services provider, has raised $50 million in growth equity funding from firms like Great Hill Partners and Parthenon Capital Partners, according to TechCrunch. Read more.

 Confie Seguros, a personal insurance company focused on Hispanic consumers, has acquired three insurance brokerages: The Insurance Market Agency (Tonawanda, N.Y.), Action Auto Insurance Agency Inc. (Cheektowaga, N.Y.) and Fast Quote Insurance (Ontario, CA). No financial terms were disclosed. Confie Seguros is a portfolio company of ABRY Partners.

 IK Investment Partners is working on a $135 million takeover offer for Danish food groups Claus Meyer and Logismose, according to a local press report. Read more.

 Ipreo, a New York-based provider of market intelligence and productivity solutions to capital markets and corporate professionals, has acquired Shareholder InSite, a provider of shareholder data management, analytics, reporting and valuation solutions for alternative asset managers. No financial terms were disclosed. Ipreo is a portfolio company of The Blackstone Group and GS Capital Partners.

 Levine Leichtman Capital Partners has completed a $35 million recap for portfolio company Smith System Driver Improvement Institute Inc., an Arlington, Texas-based provider of accident avoidance training for fleet vehicle drivers. Proceeds from the senior credit facility will be used to repay existing debt, pay a shareholder dividend and for working capital.

 National Response Corp., a Green River, N.Y.–based provider of regulatory compliance services related to the U.S. Oil Pollution Act of 1990 has acquired Emerald Alaska LLC, an Anchorage-based provider of environmental and emergency response solutions to the oil and gas industry in the state of Alaska. No financial terms were disclosed. NRC is a portfolio company of J.F. Lehman & Co.

 Pamplona Capital Management has acquired BB Industries LLC, a Mobile, Ala.-based remanufacturer of alternators and starters for the North American automotive aftermarket, from Windjammer Capital Investors. No financial terms were disclosed.

 Patch Products, a portfolio company of Topspin Partners, has acquired Onaroo, a maker of night lights and alarm clocks for children, from American Innovative LLC. No financial terms were disclosed.

 Solidor, a UK-based maker of hardwood-core composite doors, has raised an undisclosed amount of private equity funding from NorthEdge Capital.

 Surgery Center Holdings Inc., a portfolio company of H.I.G. Capital, has completed its previously-announced $792 million acquisition of Symbion Holdings Corp., an owner and operator of a national network of short stay surgical facilities, from Crestview

 TA Associates has made a “significant investment” in Insurity Inc., a Hartford, Conn.-based provider of insurance processing and data solutions. Some of the equity was purchased from existing Insurity backer Genstar Capital, which will remain a minority shareholder.


 eHi Car Services Ltd., a Chinese car services and rental company, has set its IPO terms to 10 million shares being offered at between $12 and $14 per share. It would have an initial market cap of approximately $1.48 billion, were it to price in the middle of its range. The company plans to trade on the NYSE under ticker symbol EHIC, while J.P. Morgan, Goldman Sachs (Asia) and Deutsche Bank Securities are serving as lead underwriters. eHi reports around a $21 million net loss on nearly $62 million in revenue for the first half of 2014. Shareholders include Ctrip (23% pre-IPO stake), CDH Venture Partners (12.9%), Qiming Venture Partners (11.9%), an affiliate of Goldman Sachs (10.7%) and Ignition Partners (9.1%).

NeuroDerm Ltd., an Israel-based developer of treatments for CNS disorders, has set its IPO terms to 4.5 million shares being offered at between $13 and $16 per share. It would have an initial market cap of approximately $238 million, were it to price in the middle of its range. The pre-revenue company  plans to trade on the Nasdaq under ticker symbol NDRM, with Jefferies and Cowen & Co. serving as lead underwriters. Shareholders include Capital Point Ltd. (17% pre-IPO stake).


 AstraZeneca (LSE: AZN) has agereed to acquire Definiens, a German provider of image analysis for digital pathology. The deal includes a $150 million upfront payment and possible milestone payments. Definiens had raised more than $20 million in VC funding from Wellington Partners, Gilde Healthcare, Cipio Partners and TVM Capital.

 The Blackstone Group is in advanced talks to sell U.S. industrial real estate company IndCor Properties to Singapore’s GIC for more than $8 billion, according to Bloomberg. GIC would seek more than $5 billion in debt financing for the deal. Read more.

 Bristol-Myers Squibb Co. (NYSE: BMY) has signed an exclusive option to acquire Sweden-based Galecto Biotech AB and gain global rights to its lead asset TD139 (focused on treating idiopathic pulmonary fibrosis). The deal is valued at upwards of $444 million. Galecto Biotech has raised VC funding from Merck Serono, Novo AS, Seed Capital Denmark, Sunstone Capital, Vækstfonden and Forskarpatent.


 Chemtura Corp. (NYSE: CHMT) has completed the $1 billion sale of its agrochemicals business to Platform Specialty Products Corp. (NYSE:PAH).

 Greene King (LSE: GNK) has agreed to acquire Spirit Pub Co. (LSE: SPRT), a British brewer and pub operator, for nearly 774 million pounds.

 Koninklijke DSM (Amsterdam: DSM) said that it will sell or spin off its composite resins and polymer intermediates units, which would be valued at upwards of $2.5 billion combined. Read more.


 Ambienta SGR, an Itality-based investment firm focused on European companies in the resource efficiency and pollution control sectors, has closed its second fund with €323.5 million in capital commitments.

 Mérieux Développement, a French venture capital group focused on the healthcare sector, has created its second evergreen fund with €150 million in capital commitments.


 Robert Bhiste, the founding chairman and CEO of Comverge Inc., has joined EnerTech Capital as a Houston-based executive-in-residence.

 Scott Hoffman has joined Baird Capital as an operating partner. He previously was president of global workplace safety at Brady Corp. (NYSE: BRC).

 Damon Kirchmeier has joined EPIC Ventures as a director. He previously was president of athletic watch distributor Rockwell Time USA and a partner with Auxano Funding.

 David Lawrence has stepped down as head of corporate development at Allergan (NYSE: AGN), the Botox maker that is the subject of a hostile takeover bid from Valeant Pharmaceuticals (TSX: VRX) and Pershing Square Capital Management. No word yet on his future plans. Read more.

 Dimple Sahni has joined Amsterdam-based Anthos Asset Management as senior director of impact investing. She previously held roles with Hattery, Unilever Corporate Ventures, Omidyar Network and L Capital Partners.

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