Term Sheet — Wednesday, November 12


Random Ramblings

Some items to kick off your Wednesday...

Upon further review: I've gone back and forth a bit on this matter of Uber trying to 'kneecap' the fundraising ambitions of rival on-demand car service Lyft. Is all fair in love and business, or is Fred Wilson right that this not only was unethical, but also ineffective. In the end, I don't have a problem with what Uber did in this particular case. My full explanation can be found here.

Rolling: Yahoo yesterday announced that it has agreed to acquire video advertising platform BrightRoll for approximately $640 million in cash. A few quick notes on the deal:

  1. Unlike many of its VC-backed peers, BrightRoll was very conservative with its cash. The San Francisco-based company only raised $40 million in VC funding since its 2006 launch, and none since November 2011. It also was efficient, achieving profitability on what Yahoo reports is more than $100 million in annual revenue.
  2. Had this acquisition not occurred, sources tell me BrightRoll would not have been back in market for more VC funding. Instead, it would have tried to go public.
  3. The first serious discussions between Yahoo and BrightRoll began after activist Starboard Value disclosed a small ownership stake in Yahoo in September, and only shortly before TechCrunch broke news of the negotiations on October 20. The back-and-forth leading up to a final agreement was sidetracked a few times by external Yahoo events (Q3 earnings, etc.) rather than by price disagreements.

Profitable perk: Goldman Sachs CEO Lloyd Blankfein has received more money from investments in GS employee funds than from salary and bonuses since 2008. This includes the so-called Bridge Street funds, which effectively serve as fee-free private equity vehicles for Goldman partners. Bloomberg has the full story here.

Big news from a biotech unicornIntarcia Therapeutics, a Boston-based developer of drug therapies for Type II diabetes, today announced major partnership with privately-held French biotech company Servier, in which Servier will get full rights to Intarcia's lead product in all markets outside of the U.S. and Japan. In exchange, Intarcia could receive around $1.05 billion in payments, including $171 million upfront and another $230 million in early-stage regulatory milestone payments. Notes:

  1. For the uninitiated, Intarcia is a Boston-based company that has developed a matchstick-sized osmotic pump that is placed just beneath the skin once or twice per year, for continuous subcutaneous delivery of exenatide. A legitimate breakthrough in diabetes treatment that already has advanced into Phase 3 clinical trials. Not surprisingly, the company received a post-money valuation of $1.75 billion in its most recent "venture capital" round, and is expected to be a 2015 or 2016 IPO candidate.
  2. I'll admit to never having heard of Servier, but this is no fly-by-night operation. It operates in 140 counties with 21,000 employees, and has annual turnover just north of $5 billion.
  3. Intarcia CEO Kurt Graves tells me that his company began engaging in third-party partnership discussions because it knew that it could not launch globally on its own, but that it would not surrender its rights in the U.S. (where he says 70% of all diabetes drug revenue is found). Not only was Servier okay with the U.S. carve-out (it has no operations here), but it also agreed to share future development costs and co-invest in construction for Intarcia's second manufacturing plant outside of the U.S.

Watson watch: IBM this morning disclosed the most recent investment out of its Watson Fund, by announcing participation in a new Series E round for genetics testing lab Pathway Genomics. No specifics on dollar amounts, except to say that Pathway now has raised more than $80 million in total funding from IBM, Western Technology Investments, FoundersFund, Edelson Technology Partners and Oxford Bioscience. As part of the deal, IBM and Pathway also announced a new app that will apply natural language and big data to the user experience. For example, you could ask "How much exercise should I do today," and the response will be specific to the user's DNA.

This deal is right within the wheelhouse of IBM Watson's third party development and $100 million investment platform, which launched back in January with a focus on the healthcare, tasvel and retail markets. But IBM vice president Steve Gold tells me that it since has expanded into 26 different industries, including mining, manufacturing and agriculture.

Correction: Yesterday I reported that DCM sold its shares in Revel Systems during the company's recent $100 million Series C round. The company says that DCM actually sold out during a prior Series B round. Apologies.


Axalta Coating Systems Ltd., a Philadelphia-based maker of liquid and powder coatings, raised $975 million in its IPO. The company priced 50 million shares (up from 45m) at $19.50 per share (middle of range), for an initial market cap of approximately $4.47 billion. It will trade on the NYSE under ticker symbol AXTA, while Citigroup was listed as left lead underwriter. The Carlyle Group acquired Axalta in 2012 for $4.9 billion from Dupont. The company reports $22.9 million in net income on $4.34 billion in revenue for the year ending June 30, 2014. www.axaltacs.com


 Ziarco Group Ltd., a UK–based pharma company focused on inflammatory skin diseases, has raised $33.1 million in Series B funding. New Enterprise Associates and Lundbeckfond Ventures co-led the round, alongside Amgen Ventures and return backers BVF Partners and Pfizer Venture Investments. www.ziarcopharma.com

Echo360, a Reston, Va.-based online learning and lecture capture platform, has raised $18 million in new VC funding. Duchossois Capital Management and New Island Capital co-led the round, and were joined by SWaN & Legend, Clarke Enterprises-CNF, Kiddar/Metz and return backer Revolution Growth. www.echo360.com

VisaNow, a Chicago-based provider of online immigration services in the U.S., has secured $16.1 million in VC funding from General Catalyst Partners. According to a regulatory filing, the round could grow by another $5 million. www.visanow.com

Course Hero, a Redwood City, Calif.-based online learning platform for crowdsourced study resources, has raised $15 million in Series A funding. GSV Capital Corp. and IDG Capital co-led the round, and were joined by seed backers SV Angel and Maveron. www.coursehero.com

Modernizing Medicine Inc., a Boca Raton, Fla.-based provider of a cloud-based specialty-specific electronic medical record system, has secured $15 million in equity funding co-led by Summit Partners and Pentland Group. The round could expand by another $5 million. www.modmed.com

Humedics GmbH, a German provider of bedside real-time and mobile measurement of liver function, has raised €6.3 million in Series C funding. Vesalius Biocapital Partners and Seventure Partners co-led the round, and were joined by return backers Peppermint VenturePartners, VC Fonds Technologie, ERP Startfonds, Ventegis and High-Tech Gründerfonds. www.humedics.de

Razberi Technologies, a Carrollton, Texas-based provider of network video solutions for professional video surveillance and security applications, has raised $3.5 million in new VC funding led by LiveOak Venture Partners. www.razberi.net

Ineda Systems, a Santa Clara, Calif.-based provider of low-power system-on-a-chip solutions for the wearable and Internet-of-things markets, has raised $2 million in new Series B funding from Cisco Investments. The round total is now $19 million, including an earlier investment from Walden-Riverwood Ventures, Samsung Catalyst Fund, Qualcomm Ventures and IndusAge Partners. www.inedasystems.com


 ABRY Partners has a majority stake in KORE Wireless Group Inc., a Herndon, Va.–based provider of managed M2M communications services. No financial terms were disclosed. In related news, KORE has acquired RacoWireless, a Cincinnati-based based provider of end-to-end connectivity solutions for mobile devices, from shareholders like Inverness Graham Investments. www.koretelematics.com

 Apax Partners and Bain Capital have offered to acquire the Portuguese assets of Brazilian telecom company Oi SA at an enterprise value of  €7.07 billion, according to the WSJ.This tops a €7.03 billion bid from Altice SA (Amsterdam: ATC). There is no mention of CVC Capital Partners, which prior reports had working with Apax and Bain. Read more.

 A.T. Cross Co., a Lincoln, R.I.-based pen-maker owned by Clarion Capital Partners, has acquired Sheaffer, the fine-writing instrument business of BIC Corp. No financial terms were disclosed. www.cross.com

 BV Investment Partners has invested in TriCore Solutions LLC, a Norwell, Mass.-based provider of application and infrastructure managed services. No financial terms were disclosed. www.tricoresolutions.com

 Champion Manufacturing Inc., an Elkhart, Ind.-based maker of seating products for the healthcare market, has increased its senior credit facility via a recap that, in part, was used to pay a dividend to shareholder Levine Leichtman Capital Partners. www.championchair.com

 Expera Specialty Solutions LLC, a Wisconsin-based specialty paper manufacturer owned by KPS Capital Partners, has agreed to acquire certain assets related to the Old Town Fuel & Fiber pulp mill in Old Town, Maine from its senior secured lender. No financial terms were disclosed. www.experaspecialty.com.

 Harbert Private Equity has acquired Flight Display Systems, an Alpharetta, Ga.-based maker of cabin electronics for business and commercial aircraft. No financial terms were disclosed. Harbert also installed Reed Macdonald, a former FDS executive, as the company’s new CEO. www.flightdisplay.com

 H.I.G. Capital has sponsored a recapitalization of Pegasus Electronic Distribution Services, a Dallas–based provider of connectivity and distribution solutions to lodging providers and distributors. www.pegs.com

 Intervale Capital has acquired a majority stake in American Disposal Services, a provider of disposal of injectable drilling and production waste in the Eagle Ford and Haynesville Shale plays. No financial terms were disclosed, except that Wells Fargo provided leverage. www.intervalecapital.com

KKR and Citic Ltd. (HK: 267) have offered to acquire listed Chinese water treatment company United Envirotech Ltd. for approximately €930 million. Read more.

 Nordic Capital has agreed to acquire Vizrt Ltd. (Oslo: VIZ), a Norwegian provider of 3D graphics and sports analytics to the broadcast industry, for approximately $369 million. Read more.

 Peak Rock Capital has invested in Highline Produce Ltd., a Canadian producer and distributor of mushrooms. No financial terms were disclosed. www.highlinemushrooms.com

 VersionOne Inc., an Alpharetta, Ga.-based provider of agile lifecycle management solutions, has raised $20 million in growth equity funding from LLR Partners. www.versionone.com

 Vertical Bridge Holdings, a Boca Raton, Fla.-based owner of wireless communication towers in the U.S., has secured $470 million of new equity commitments from GS Infrastructure Partners, Stonepeak Infrastructure Partners and existing sponsors The Jordan Co. and Digital Bridge Holdings. www.verticalbridge.com

 WorldPay, a UK-based payments tech company backed by Advent International and Bain Capital, has agreed to acquire SecureNet Payment Systems, an Austin, Texas–based provider of multi-channel commerce technology, from Sterling Partners. No financial terms were disclosed. www.worldpay.com


 Anbang Insurance Group Co., the Chinese insurer that recently agreed to buy the Waldorf Astoria hotel in New York City, is prepping an IPO for early 2015 that could raise around $2 billion, according to Bloomberg. Read more.

International Market Centers Inc., a Las Vegas-based owner and operator of permanent business-to-business showroom space for the furniture, home décor and gift industries, has filed for a $200 million IPO. It plans to trade on the NYSE under ticker symbol IMC, with Barclays, Credit Suisse and Wells Fargo serving as lead underwriters. The company is owned by Bain Capital, and generated nearly $119 million in revenue over the first nine months of 2014. www.imcenters.com


 Aquiline Capital Partners has agreed to sell Conning Holdings Corp., a Hartford, Conn.–based insurance asset management and investment management firm, to Cathay Financial Holding Co. (Taiwan: 2882) for up to $240 million. www.conning.com

MBK Partners is selling to sell its 70% stake in GSE Investment Corp., a Chinese wastewater treatment and waste-to-energy company, according to the WSJ. The deal could value GSE at more than $800 million (including debt). Read more.

SunPower Corp. (Nasdaq: SPWR) has acquired SolarBridge Technologies Inc., an Austin, Texas–based provider of microinverter technologies for the solar industry. No financial terms were disclosed. SolarBridge had raised around $71 million in VC funding from Battery Ventures, Rho Ventures, Osage University Partners and Shea Ventures. www.solarbridgetech.com

Yahoo (Nasdaq: YHOO) has agreed to acquire San Francisco-based ad platform BrightRoll for approximately $640 million in cash. BrightRoll had raised over $40 million in VC funding from firms like Adams Street Partners, Scale Venture Partners, KPG Ventures, True Ventures and Trident Capital. Read more.


 Altor has agreed to sell Swedish pharmacy chain Apotek Hjartat to ICA Gruppen (Oslo: ICA) for approximately $770 million in cash. Read more.


 Francisco Partners is seeking to raise upwards of $2 billion for its fourth private equity fund, according to a regulatory filing. www.franciscopartners.com


Michael Dal Bello, a former managing director with The Blackstone Group, has joined Pritzker Group Private Capital as a Los Angeles-based investment partner focused on the healthcare market. Pritzker Group Private Capital also added Ceron Rhee (ex-TPG Capital) as a VP of healthcare investing and Evan Earley (ex-UBS) as an associate. www.pritzkergroup.com

Brian Daniels and Stephen Bonelli both have joined 5AM Ventures as a venture partner and chief financial officer, respectively. Daniels previously was senior VP of global development and medical affairs for Bristol-Meyers Squibb, while Bonelli was CFO for Three Arch Partners. www.5amventures.com

Collin Roche, a managing director with GTCR, is leaving the board of PrivateBancorp Inc. (Nasdaq: PVTB), in conjunction with the firm’s “announced intent to wind down its equity investment” via a distribution of shares to limited partners. GTCR currently has a 4.47% stake in PrivateBancorp, with the shares currently valued just south of $115 million. The company also announced that Michelle Collins, president of Cambium LLC, will join its board. www.theprivatebank.com

Vicky Sharpe, founder and former CEO of Sustainable Development Technology Canada, has joined the advisory board of EnerTech Capital. www.enertechcapital.com

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