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Term Sheet — Thursday, November 20

Random Ramblings

Bob Grady yesterday stepped down as chairman of the New Jersey Investment Council, which oversees investments for the state’s $81 billion public employees. The private equity veteran is a longtime friend and political ally of Gov. Chris Christie, and has served in the position on a volunteer basis since 2010.

Grady sent Christie a resignation letter over the weekend, and informed the broader Investment Council during its regularly-scheduled monthly meeting. The Council members then unanimously approved a resolution thanking Grady for his service. Among those voting ‘aye’ on the resolution was a Council rep from the AFL-CIO, which recently filed an ethics complaint against Grady.

Vice chairman Tom Byrne, an investment professional and former head of the New Jersey Democratic Party, has assumed the chairmanship, at least on an interim basis.

Grady has been under some press scrutiny for alleged conflicts of interest involving investments in private equity and hedge funds, but there is no evidence that his resignation is related to those issues. Instead, it seems to be based on a confluence of three factors:

1. Grady never intended to still be doing the job: This was originally done as a favor to Christie, with the understanding that Grady would serve only for one term. But he agreed to stay on longer, in part to help find an investment department head after Tim Walsh unexpectedly quit last August. A successor, Chris McDonough, was formally named to the post this past March.

2. Family matters: A member of Grady’s immediate family has been dealing with a serious health issue, thus making it more difficult for him to regularly travel to Trenton (Grady has lived in Wyoming for several years, and was rumored to have been considering a U.S. Senate run had Sen. Mike Enzi not opted for reelection).

3. Business timing: Grady, who made his investment bones with The Carlyle Group, currently is a managing director with Denver-based private equity firm Cheyenne Capital. That firm is in the process of determining if it will raise another fund in early 2015, which is another way of saying that folks like Grady must decide if they want to make another 10-year commitment. One complicating factor could be whether or not Chris Christie plans to run for president, since Grady likely would be deeply involved (even if from afar). In short, Grady seems to have cleared the deck in order to examine all of his future options.

• Coming attractions: Yes, we will be doing a mailbag column tomorrow morning. So if you’ve got something on your mind, get it to me today…


• Emdeon Inc., a Nashville, Tenn.-based provider of healthcare revenue and payment cycle management solutions, has acquired Change Healthcare, a Brentwood, Tenn..–based provider of healthcare consumer engagement and transparency solutions, for approximately $185 million in cash (including $135m up-front).

Emdeon is a portfolio company of The Blackstone Group, General Atlantic and Hellman & Friedman. Change Healthcare had raised VC funding from HLM Venture Partners, Noro-Moseley Partners, BlueCross BlueShield Venture Partners, Sandbox Industries, Mitsui & Co., Gary and Mary West Health Investment Fund and Solidus Co.


• OrderWithMe, a Las Vegas-based group buying platform for small businesses, has raised $28 million in new VC funding. Backers include Vegas Tech Fund, SOSVentures, BaseVC, Silicon Valley Bank, Pentland Group and Advantage Capital. The company previously raised $9 million. Read more.

• Getaround, a P2P car rental platform, has raised $24 million in new strategic funding from Cox Enterprise. It previously raised nearly $14 million in Series A funding from Menlo Ventures, Innovation Endeavors, Collaborative Fund, Correlation Ventures, SOSventures and individual angels like Marissa Mayer and David Sacks.

• InfoBionic Inc., a Lowell, Mass.-based provider of monitoring solutions for chronic disease management, has raised $17 million in Series B funding. Excel Venture Management and Zaffre Investments were joined by return backers Safeguard Scientifics, Mass Medical Angels, Broadview Ventures, The Indus Entrepreneurs, Beta Fund, Launchpad Venture Group, Cherrystone, TCA, HTC, Boynton and Keiretsu.

• FastPay, a Los Angeles-based provider of workflow and liquidity solutions for the global media industry, has raised $15 million in VC funding from Oak HC/FT.

• CS Disco Inc., a Houston, Texas-based provider of e-discovery software and other legal tech solutions, has raised $10 million in Series B funding. Bessemer Venture Partners led the round, and was joined by return backer LiveOak Venture Partners.

• Lighting Science Group Corp., a Melbourne, Fla.-based provider of LED lighting solutions, has raised $13 million in preferred equity funding from Serengeti Asset Management.

• SendHub, a Menlo Park, Calif.-based “all-in-one business phone system,” has raised $5 million in Series B funding. Bullpen Capital led the round, and was joined by Kapor Capital, Menlo Ventures, Seraph Group and Eric Ries.

• ThreatConnect (f.k.a. Cyber Squared Inc.), an Arlington, Va.-based provider of a cyber-security threat intelligence platform, has raised $4 million in Series A funding led by Grotech Ventures.

• Tyba, a Madrid-based recruitment platform for junior talent, has raised $3.1 million in new VC funding from an affiliate of the Kuwaiti Investment Authority and return backer Sunstone Capital. Read more.

• AllUnite, a Copenhagen-based provider of free Internet and location-based marketing services for retailers, has raised €3 million in Series A funding co-led by Northzone Ventures and Danish grocery chain Coop.

• Mainframe2, a Menlo Park, Calif.-based cloud platform for managing Windows apps, has raised $2.2 million in seed funding led by Columbus Nova Technology Partners.

• Managed by Q, a New York-based platform for office cleaning, maintenance and management, has raised $1.65 million in seed funding from backers like Homebrew Ventures, RRE Ventures and Semil Shah.

• 5nine Software, a Boston-based provider of Microsoft Cloud virtualization management, security and compliance solutions, has raised an undisclosed amount of new funding co-led by Insight Venture Partners and the founders of Veeam Software.

• Airware, a San Francisco-based drone company, has raised an undisclosed amount of strategic funding from GE Ventures.  The company previously raised around $40 million from Kleiner Perkins Caufield and Byers, First Round Capital and Andreessen Horowitz.

• Plunify, a Singapore-based developer of field-programmable gate array software, has raised an undisclosed amount of VC funding from Lanza techVentures.


• Centerbridge Partners is among the possible suitors for OneMain Financial, the subprime lending business put up for sale by Citigroup (NYSE: C), according to the WSJ. Bids are due today, with expectations that Citigroup ultimately could fetch more than $4 billion. Read more.

• Dominus Capital has acquired Intelliteach Inc., an Atlanta–based provider of business process outsourcing solutions to the legal and accounting markets. No financial terms were disclosed.

• LeapFrog Investments has agreed to acquire a majority stake in Resolution Insurance, a provider of health insurance in East Africa, for approximately $18.7 million.

• Littlejohn & Co. has acquired PSC Industrial Outsourcing, a Houston, Texas-based provider of commercial and industrial waste management services, from Lindsay Goldberg. No financial terms were disclosed. Earlier this year, Lindsay Goldberg had sold another piece of PSC LLC (PSC Environmental Services), to Stericycle Inc. (Nasdaq: SRCL) for approximately $275 million.

• Pamplona Capital Management has acquired a majority stake in Intralign Holdings LLC, a Scottsdale, Ariz.-based provider of surgical support solutions. No financial terms were disclosed. Existing Intralign shareholders Heritage Group and Cardinal Health will retain minority positions.

• Permira and German healthcare company Fresenius have made a joint bid for the medical nutrition business of Danone SA, according to the WSJ. A deal could be valued at between €3 billion and €4.5 billion. Read more.

• Stone Point Capital has agreed to acquire Oasis Outsourcing, a West Palm Beach, Fla.–based provider of HR services to small and mid-sized businesses, from Nautic Partners and Altaris Capital Partners. No financial terms were disclosed.

• Top Knobs USA Inc., a Hillsborough, N.J.-based portfolio company of Harbour Group, has acquired Atlas Homewares Inc., a Los Angeles–based provider of decorative hardware products like cabinet knobs and bath accessories. No financial terms were disclosed.


• Bain Capital has engaged Reunion Capital Partners to advise of a flotation for MYOB Ltd., an Australian provider of accounting software, according to Reuters. The IPO could value MYOB at upwards of A$3 billion, and is expected to include underwriting participation from BofA Merrill Lynch, Citigroup, Goldman Sachs and UBS. Read more.

• The Habit Restaurants Inc., an Irvine, Calif.-based fast casual burger and sandwich restaurant chain, raised $90 million in its IPO. The company priced 5 million shares at $18 per share (above $14-$16 range), for an initial market cap of approximately $455 million. It will trade on the Nasdaq under ticker symbol HABT, while Piper Jaffray was listed as left-lead underwriter. Habit Restaurants reported nearly $6 million in net income for 2013 on $120 million in revenue. Shareholders include KarpReilly


• Montagu Private Equity has sold CAP, a UK-based provider of data and information systems to automotive-related sectors, to Solera Holdings Inc. (NYSE: SLH) for £288 million.

• Oaktree Capital Group has hired UBS to find a buyer for Taiwan-based conglomerate Fusheng Group, which could fetch around $1 billion, according to the WSJ. Oaktree acquired a minority stake in the business seven years ago as part of an $850 million buyout, but has drag-along rights with the company’s majority owner (Taiwan’s Lee family). Read more.

• The Rohatyn Group has sold its 36.6% stake in Huvepharma AD, a Bulgarian maker of animal health and nutrition products, to Advance Properties OOD for an undisclosed amount.


• Citigroup (NYSE: C) is considering a sale of its fixed income index business, according to Reuters. Read more.

• Koch Industries Inc. has agreed to acquire Oplink Communications Inc. (Nasdaq: OPLK), a Fremont, Calif.-based provider of optical networking components and systems. The deal is valued at approximately $445 million, or $24.25 per share (14% premium to Monday’s closing price).

• Technip SA (Paris: TEC) has offered to acquire CGG SA (Paris: CGG), a French seismic surveyor of oil and gas fields, for approximately €1.46 billion. The French government owns stakes in both companies.


• Coller Capital is planning to target $5.5 billion for its next private equity secondaries fund, according to Bloomberg. That’s the same amount the London-based firm raised for its sixth fund in 2012. Read more.

• Golden Venture Partners, a Toronto-based early-stage investment firm, has closed its second fund with C$40 million in capital commitments. Limited partners include Northleaf Venture Catalyst Fund and BDC Capital. Read more.


• Robert Friedman Jr. has joined mid-market investment bank Dresner Partners as a healthcare-focused managing director. He previously was a managing director with Northeast Securities.

• Tom Leonardi, head of the Connecticut Insurance Department, has agreed to join Evercore as a senior advisor with a focus on the insurance industry.

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