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Term Sheet — Monday, December 8

Random Ramblings

Some quick notes to kick off your Monday…

• Deal scoop: Erin Griffith reported on Friday afternoon that IAC is seeking a buyer for CollegeHumor for around $100 million. It makes three humor/humor video sites known to be on the block – following Funny or Die and The Onion – and word is that there could be several more…

• Speaking of media deals: A new regulatory filing shows that Ingraham Media Group, the company led by conservative talk radio host Laura Ingraham, has raised $2.85 million of a $7 million funding round. No investor information was disclosed.

• More Form D: Sherpa Ventures is raising upwards of $250 million for SherpaEverest, which appears to be its first growth equity fund. Sherpa is the San Francisco-based firm led by Shervin Pishevar (ex-Menlo Ventures) and Scott Stanford (ex-Goldman Sachs) that is known for its interest in on-demand services providers like Uber. The regulatory filing does not indicate a first close, but sources familiar with Uber’s recent $1.2 billion financing round say that SherpaEverest was a participant.

• Sticking around: Silver Lake Partners has sold some of its shares in Virtu Financial Inc.,  the New York-based high speed trading firm that delayed its planned IPO following the publication of Flash Boys by Michael Lewis, to Singapore’s Temasek Holdings for around $180 million. Silver Lake never was controlling shareholder in Virtu, but will retain some company stock and one board seat (it previously had two seats).

• M&A hacks: Ernst & Young this morning released its M&A outlook for 2015, in which it expects this year’s high volume to persist. But it also discussed an interesting side effect of all this activity:

“M&A routinely creates opportunities for cyber-security breaches. With investors showing increased interest in boards’ preparedness for cyberattacks, the emphasis on cyber as part of both business and M&A strategy will likely increase over the coming years… Cybersecurity and related economic risks are often overlooked during both diligence and integration, which is contrary to the emphasis placed on mitigating transaction risk and maximizing rate of return.”

• Ebola czar Ron Klain is planning to return to his private-sector job as president of Steve Case’s holding company and general counsel for his VC firm, Revolution, by March 1, according to my colleague Tory Newmyer. Also worth noting that Tory reached out to several Congressional critics of Klain’s original appointment to the Ebola position, but none were willing to comment.

THE BIG DEAL

• Merck (NYSE:MRK) has agreed to acquire Cubist Pharmaceuticals (Nasdaq: CBST), a Lexington, Mass.-based drug developer focused on ‘superbugs,’ for $9.5 billion in cash (including the assumption of $1.1b in debt). The $102 per share offer represents a 37% premium over Friday’s closing price. Read more.

VENTURE CAPITAL DEALS

• LanzaTech, a maker of low-carbon fuels and chemicals from waste gases, has raised $60 million in new Series D funding from the New Zealand Superannuation Fund. This brings the round total to $112.6 million, including prior commitments from Mitsui & Co., Siemens, CICC Growth Capital, Khosla Ventures, Qiming Venture Partners, K1W1 and the Malaysian Life Sciences Capital Fund. LanzaTech has offices in Illinois and New Zealand. www.lanzatech.com

• Mesosphere, a San Francisco–based developer of a datacenter operating system, has raised $36 million in Series B funding. Khosla Ventures led the round, and was joined by Andreessen Horowitz, Fuel Capital and SV Angel. www.mesosphere.io

• Sckipio Technologies, an Israel-based provider of G.fast modem chipsets, has raised $17 million in Series B funding. Pitango Venture Capital led the round, and was joined by return backers Gemini Israel Ventures, Genesis Partners, Amiti Ventures and Aviv Ventures.  www.sckipio.com

• Extole, a San Francisco-based provider of referral marketing solutions, has raised $14 million in Series C funding. Scale Venture Partners led the round, and was joined by return backers Norwest Venture Partners, Redpoint Ventures, Shasta Ventures and Trident Capital. www.extole.com

• RezNext Global Solutions, a Bangalore-based provider of real-time distribution solutions for the hotel industry, has raised $5 million in VC funding from New Enterprise Associates. www.reznext.com

• Spare5, a Seattle-based on-demand insights platform, has raised $3.25 million in seed funding from New Enterprise Associates, the Foundry Group, Madrona Venture Group and individual angels. www.spare5.com

• SoftWear Automation Inc., an Atlanta-based maker of robotic sewing technologies for the garment industry, has raised $3 million in Series A funding from CTW Venture Partnerswww.softwearautomation.com

• XOEye Technologies, a Nashville, Tenn.-based developer of wearables solutions for industrial business processes, has raised $1.5 million in Series A funding co-led by Crestlight Ventures and Selous Venture Society. The round is remaining open for three months, as the company seeks to close on a total of $2 million. www.xoeye.com

PRIVATE EQUITY DEALS

• Apax Partners has offered to buy Norwegian IT services provider Evry ASA for approximately $600 million, or 16 kroner per share (discount to Friday’s closing price of 17.2 kroner per share). Evry had announced in August that it would explore strategic options, including a possible sale. It is majority owned by Norway Post and Telenor ASA. Read more.

• Bain Capital, CVC Capital Partners, KKR and Mid Europa Partners all have progressed to the second round of bidding for listed Slovenian brewer Pivovarna Laško, according to Dow Jones. The deal could be valued at between €350 million to €500 million. www.pivo-lasko.si

• Ektron, a Nashua, N.H.-based provider of digital experience management software, has raised an undisclosed amount of private equity funding from existing shareholder Accel-KKR. www.ektron.com

• Expera Specialty Solutions LLC, a Wisconsin-based specialty paper manufacturer owned by KPS Capital Partners, has completed its previously-announced acquisition  of 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

• Grey Mountain Partners has acquired Honsador Holding LLC, a distributor of building products and electrical supplies in the state of Hawaii, from Cyprium Partners. No financial terms were disclosed. www.honsador.com

• Novolex, a Hartsville, S.C.-based portfolio company of Wind Point Partners, has completed its previously-announced acquisition of Packaging Dynamics, a Chicago-based maker of flexible packaging solutions, from Kohlberg & Co. No financial terms were disclosed, except that the combined company will generate around $1.9 billion in revenue. Harris Williams & Co. managed the process. www.hilexpoly.com

• Parabis Group, a London-based provider of legal services for industries like insurance and travel, has raised £13 million in private equity funding from Duke Street. www.parabisgroup.co.uk

• Tecomet Inc., a Wilmington, Mass.-based contract manufacturer for the medical device and aerospace industries portfolio, completed its previously-announced $450 million acquisition of the OEM solutions unit of Symmetry Medical Inc. (NYSE: SMA). Tecomet is a portfolio company of Genstar Capitalwww.tecomet.com

• Vertellus, an Indianapolis-based based provider of specialty chemicals for the life sciences market, has agreed to acquire the Sodium Borohydride unit of Dow Chemical Co. (NYSE: DOW) for an undisclosed amount. Vertellus is a portfolio company of Wind Point Partners. www.vertellus.com

IPOs

• Capio AB, a Swedish provider of healthcare services, has hired SEB and JPMorgan to lead an IPO in Stockholm that could come in Q1 2015, according to a local report. Capio is owned by Apax Partners and Nordic Capital, and generated around $1.64 billion in 2013 revenue. Read more.

• LendingClub Corp., a San Francisco-based peer-to-peer lending marketplace, has increased its IPO pricing range from $10-$12 per share to $12-$14 per share. It would have an initial market cap of approximately $4.69 billion, were it to price in the middle of its range. The company plans to trade on the NYSE under ticker symbol LC, with Morgan Stanley and Goldman Sachs are serving as co-lead underwriters. LendingClub reports a $16 million net loss on $87 million in revenue for the first half of 2014, compared to $1.7 million in net income on $37 million in revenue for the year-earlier period. It has raised nearly $400 million in VC funding from such firms as Norwest Venture Partners (16.5% pre-IPO stake), Canaan Partners (15.9%), Foundation Capital (12.8%), and Morgenthaler Venture Partners (9.2%). www.lendingclub.com

• Rice Midstream Partners, a limited partnership formed by Rice Energy (NYSE: RICE) to own midstream gas assets in the Marcellus Shale, has set its IPO terms to 25 million units being offered at between $19 and $21 per unit. It plans to trade on the NYSE under ticker symbol RMP, with Barclays listed a sole underwriter. www.riceenergy.com

 

EXITS

• The Blackstone Group has agreed to sell a portfolio of 26 office buildings in Northern California to Hudson Pacific Properties (BNYSE: HPP) for $3.5 billion in cash and stock. The cash portion is $1.75 billion, while Blackstone will become a 48% owner of HPP. www.blackstone.com

• Connexity (f.k.a. Shopzilla), a portfolio company of Symphony Technology Group, has acquired Become.com, a Sunnyvale, Calif.-based provider of ecommerce search engine and marketing services. No financial terms were disclosed. Become.com had raised around $37 million in VC funding from firms like TPG Growth, SV Angel, TransCosmos and European Founders Fund. Read more.

• TDC AS is considering a bid for Swedish telecom company Com Hem, according to Reuters. The deal could be valued at more than $1.5 billion. BC Partners holds a 47.6% stake in Com Hem,  which is publicly-listed. Read more.

• Temasek Holdings has agreed to invest $180 million for a minority stake in Virtu Financial Inc., the New York-based high speed trading firm that delayed its planned IPO following the publication of Flash Boys by Michael Lewis, according to Bloomberg. The position is being sold by Virtu owner Silver Lake. Read more.

OTHER DEALS

• Saint-Gobain (Paris: SGO) has agreed to acquire a control stake in Swiss specialty chemicals company Sika (Swiss: SIK) from the Burkard family, despite objections to the $2.8 billion deal from Sika’s board of directors and senior executives. Read more.

FIRMS & FUNDS

• Cressey & Co., a healthcare-focused private equity firm, has closed its fifth fund with $615 million in capital commitments. www.cresseyco.com

Mercury Fund, a Houston-based early-stage VC firm focused on software and science-based startups, has closed its third fund with $105 million in capital commitments. www.mercuryfund.com

 

MOVING IN, UP, ON & OUT

• Sam Oh is stepping down as a partner with Apollo Global Management, where he was worked on energy deals since 2008, according to the NY Times. Apollo plans to begin raising a new energy-focused fund next year. Read more.

• Andrew Sukawaty, executive chairman of Inmarsat PLC and former vice chairman of O2, has joined Warburg Pincus to focus on telecom and media opportunities. www.warburgpincus.com

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