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Term Sheet — Tuesday, December 9

Random Ramblings

Yesterday I spent some time on the phone with Bryan Cressey, the veteran healthcare investor who has been a “name” partner with three private equity firms, including GTCR (he’s the “C”), Thoma Cressey Equity Partners and, now Cressey & Co. That last one just closed its new fund with $615 million in capital commitments, mostly to focus on platform opportunities in the healthcare services and facilities sectors. Three notes:

1. Cressey is watching what the Supreme Court does (or doesn’t do) with the Affordable Healthcare Act, but says that the law is largely irrelevant to his firm’s target area. “We’re investing in providers and the provision of healthcare has not been changed too much by ACA. It was more about insurance benefits and moving some of it to exchanges. The provision of regular healthcare and reimbursement for it is just like it has been for a long time… But we do have regulatory cyclicality outside of ACA. We break down our market into around 60 sub-sectors, and you’ll see regulators decide something is very valuable and deserving of high reimbursement, and then 10 years later no longer needs as much reimbursement. We see that all the time.

2. The two sub-sectors where he sees particular opportunity right now are home nursing and hospice care. “Not everyone agrees with us, particularly because there will be reimbursement cuts in home nursing over the next couple of years, but we feel those cuts will diminish and the industry will continue to grow… On hospice, it saves a lot of money because it is mostly provided in the home and decreases major end-of-life surgery expenses.”

3. Fundraising: Cressey & Co. raised $385 million for its previous fund and $615 for this one, but both were marketed with the same $500 million target. “We raised the last one in the nuclear winter of 2008 and 2009, so things were obviously better this time around.” Also worth noting that the $615 million includes $550 million of outside LP commitments and $65 million from firm partners.

• Quiz time: Can you name the New York City-based startup that just raised around $400 million in new VC funding at a multi-billion dollar valuation? Your hint is that it is not a media or retail company.

• Singularity: The global headquarters of headphone and speaker-maker Bose is a just few miles from the home office, in a town called Framingham, Mass. Until yesterday, however, I had never noticed its official street address: The Mountain. Not Bose Mountain. Or 1 Mountain Drive. Just The Mountain. I love that.

• Past due: There was a Reuters story last week about how Blackstone Group president Tony James is “looking beyond” the firm, including the possibility that he could seek some sort of U.S. government job.

All of that is true, but hardly new. I recall discussing it with him during the Democratic National Convention in Charlotte two years ago, and got the sense that Mitt Romney’s candidacy would be a stumbling block (i.e., would Obama want to nominate a big buyout guy?). Fairly sure it was mentioned in this column. Moreover, James hinted at this very thing during a television interview late last year. At this point, however, the only job I could seen James leaving Blackstone for would be in the nonprofit world, since he’s not going to sign onto an Obama Administration this late in the game (nor are there any major openings expected within the investor’s wheelhouse). A Hillary presidency, on the other hand…

• What’s the plan? Online petition company Change.org this morning announced $25 million in Series C funding from a large group of tech luminaries and celebrities like Bill Gates, Pierre Omidyar, Joe Lonsdale, Arianna Huffington, Reid Hoffman, Richard Branson and Ashton Kutcher.

Company CEO Ben Rattray continues to pledge that the for-profit company will never go public or be acquired. Instead, he tells me that the eventual plan for shareholder liquidity will be private secondary sales, citing SurveyMonkey as an precursor. Read more on the deal by going here.

THE BIG DEAL

• DataGravity, a Nashua, N.H.-based provider of a data storage and analytics platform for small and mid-sized businesses, has raised $50 million in Series C funding. Accel Partners led the round, and was joined by return backers Andreessen Horowitz, CRV and General Catalyst. Read more.

VENTURE CAPITAL DEALS

• Dynamics, a Cheswick, Penn.-based maker of interactive payment cards, has raised $70 million in Series C funding. Mastercard and Canadian Imperial Bank of Commerce were joined by return backers like Bain Capital Ventures and Adams Capital Management. Read more.

• CardioKinetix Inc., a Menlo Park, Calif.-based developer of a catheter-based treatment for heart failure, has raised $50 million in new VC funding. Edwards Lifesciences Corp. led the round, and was joined by return backers U.S. Venture Partners, Tekla Healthcare Investors, Tekla Life Sciences Investors, SV Life Sciences, Panorama Capital, New Leaf Venture Partners, and Lexington Private Equity. www.cardiokinetix.com

• Altiscale Inc., a Palo Alto, Calif.-based provider of Hadoop-as-a-service solutions, has raised $30 million in Series B funding. Northgate led the round, and was joined by return backers Sequoia Capital and General Catalyst Partners. www.altiscale.com

• Change.org, a for-profit online petition company that has pledged to never go public or sell itself, has raised $25 million in Series C funding. Return backer Omidyar Network was joined by such individuals as Bill Gates, Richard Branson, Reid Hoffman, Ev Williams, Jerry Yang, Gideon Yu, Arianna Huffington, Ashton Kutcher and Guy Oseary. Read more.

• ThousandEyes, a San Francisco-based provider of network performance management solutions, has raised $20 million in Series B funding. Sutter Hill Ventures led the round, and was joined by Salesforce Ventures and return backer Sequoia Capital. www.thousandeyes.com

• Nginx Inc., a San Francisco-based open source web server for content-heavy sites, has raised $20 million in Series B-1 funding. NEA led the round, and was joined by e.ventures, Runa Capital, Index Ventures and Nginx CEO Gus Robertson. www.nginx.com

• DB Networks, a Carlsbad, Calif.-based provider of cyber-security that leverages machine learning and behavioral analysis, has raised $17 million in new VC funding. Grotech Ventures led the round, and was joined by Khosla Ventures and Citi Ventures.  www.dbnetworks.com 

• Seeo, a Hayward, Calif.–based developer of lithium polymer batteries, has raised $17 million in Series E funding. Samsung Ventures led the round, and was joined by return backers Khosla Ventures and GSR Ventures. www.seeo.com

• Hired.com, a San Francisco-based two-sided career marketplace for the tech industry, has raised $15 million in Series B equity and debt funding. Silicon Valley Bank, Comcast Ventures and Lumia Capital were joined by return backers Crosslink Capital, Sierra Ventures, SoftTech and SherpaVentures. www.hired.com

• Nexthink, a Swiss provider of end-user IT analytics, has raised $14.5 million in Series D funding. Auriga Partners led the round, and was joined by Gilles Queru and return backers VI Partners and Mannai Corp. www.nexthink.com

• Nok Nok Labs, a Palo Alto, Calif.-based provider of authenticaton solutions, has raised $8.25 million in Series C funding. DDS Inc. and Raven Ventures were joined by return backers DCM Ventures, Lenovo Group Limited and ONSET Ventures. www.noknok.com

• Appcito, a Santa Clara, Calif.-based cloud application infrastructure company, has raised $7.5 million in Series A funding. Backers include March Capital Partners, Atlas Venture and The Fabric. www.appcito.com

• Kitchit, a San Francisco-based startup focused on bringing a restaurant experience into user’s homes, has raised $7.5 million in Series A funding led by Javelin Venture Partners. www.kitchit.com

• Invenias, a London-based provider of software for the executive search and specialist recruitment sector, has raised $2 million in new VC funding led by MMC Ventures. www.invenias.com

• Revionics, a Roseville, Calif.-based provider of merchandise pricing optimization solutions for retailers, has raised an undisclosed amount of growth equity funding from Goldman Sachs. The company previously raised over $18 million from Blumberg Capital, Sierra Ventures, Velocity Venture Capital, Sacramento Angels and Motorola Solutions Venture Capital. www.revionics.com

PRIVATE EQUITY DEALS

• Arrowroot Capital has completed a growth equity investment into 4tell Solutions, a Portland, Maine-based provider of sustainable performance governance software for organizations. No financial terms were disclosed. www.4tellsolutions.com

• The Carlyle Group has invested $32.8 million to acquire a 54.85% stake in NewGen KnowledgeWorks Private Ltd., an India-based provider of publishing and technical services for publishers. www.carlyle.com

• Comvest Partners has acquired Old Time Pottery, a Murfreesboro, Tenn.-based discount retailer of home décor products. No financial terms were disclosed. www.oldtimepottery.com 

• Dubin Clark has sponsored a recapitalization of Peterson Party Center, a Woburn, Mass.-based party and event rental business. No financial terms were disclosed. www.ppcinc.com

• Lone Star Funds has offered to buy OneMain Financial Holdings, the sub-prime lending unit of Citigroup Inc., according to Bloomberg. Citigroup previously received a takeover offer from Springleaf Holdings Inc. (NYSE: LEAF). Read more.

• Mintra Trainingportal AS, a Norway-based e-learning platform for oil and gas companies operating in the North Sea, has raised an undisclosed amount of private equity funding from The Riverside Co. www.mintra.no

• Palatine Private Equity has sponsored a £36 million management buyout of Character World, a British maker of bedding textiles, from RJD Partners. www.characterworld.co

• Teneo, a New York–based corporate advisory firm, has raised an undisclosed amount of private equity funding from BC Partners, according to the NY Times. Read more.

IPOs

• Bellicum Pharmaceuticals Inc., a Houston, Texas-based developer of cellular immunotherapies, has set its IPO terms to 6.25 million shares being offered at between $15 and $17 per share. It would have an initial market cap of approximately $397 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol BLCM, with Jefferies, Citigroup and Piper Jaffray serving as lead underwriters. The company has raised around $107 million in VC funding, from such firms as Baker Brothers Life Sciences (20.5% pre-IPO stake), Remeditex Ventures (14.9%), AVG Ventures (6.1%), RA Capital Management (5.5%), Perceptive Advisors, Jennison Associates, Sabby Capital, Ridgeback Capital Management, venBio Select, Redmile Group, and AJU IB Investment. www.bellicum.com

• Juno Therapeutics, a Seattle-based developer of immunotherapies for cancer, has set its IPO terms to 9.25 million shares being offered at between $15 and $18 per share. It would have an initial market cap of approximately $1.26 billion, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol JUNO, with Morgan Stanley, JP Morgan and Goldman Sachs serving as lead underwriters. The pre-revenue company has raised around $310 million over two rounds of VC funding, from firms like Crestline Management (34.75% pre-IPO stake, on behalf of the Alaska Permanent Fund), Arch Venture Partners (15.17%), Fidelity Investments, Bezos Expeditions and Venrock. Its strategic partners are The Fred Hutchinson Cancer Research Center (5.17%), Memorial Sloan-Kettering Cancer Center and the Seattle Children’s Research Institute. www.junotherapeutics.com

• New Relic, a San Francisco-based provider of application performance management solutions for the enterprise, has increased its IPO price range from $18-$20 per share to $20-$22 per share. It would have an initial market cap of approximately $967 million, were it to price in the middle of its revised range. The company plans to trade on  the NYSE under ticker symbol NEWR, with Morgan Stanley and J.P. Morgan serving as lead underwriters. The company reports a net loss of $19.4 million on $39 million in revenue for the six months of 2014 ending Sept. 30, compared to an $18.5 million net loss on nearly $22 million in revenue during the year-earlier period. New Relic has raised around $270 million in VC funding from Benchmark (22% pre-IPO stakjje), Trinity Ventures (13.6%), Insight Venture Partners (5.6%), Tenaya Capital (4.9%), BlackRock, Passport Capital, T. Rowe Price, Dragoneer Investment Group and Allen & Company. www.newrelic.com

 

EXITS

• Bain Capital has agreed to sell around half of its remaining $1.13 billion stake in hospital chain HCA Holdings (NYSE: HCA) back to the company. www.hca.com 

 The Carlyle Group and Unison Capital Group have agreed to sell Covalent Materials Corp., a Japanese maker of semiconductor products, to CoorsTek Inc., a subsidiary of GAMCO Investors Inc. (NYSE:GBL). No financial terms were disclosed, although Bloomberg reports that the sellers had been seeking more than $400 million. Read more.

• Sonos, a Santa Barbara, Calif.-based maker of Internet-connected and wireless speaker systems, has completed a $130 million fundraise that is designed to provide liquidity for existing shareholders. No word on the buyer or sellers. Sonos previously raised over $300 million from such firms as Index Ventures,Redpoint Ventures and KKR. www.sonos.com 

 

OTHER DEALS

• Aurobindo Pharma USA Inc., a unit of India’s Aurobindo Pharma Ltd. (BSE: 524804), has acquired Natrol Inc., a Chatsworth, Calif.–based provider of nutritional supplements, for $132.5 million from Plethico Pharmaceuticals Ltd. (BSE:532739). www.natrol.com

• Dashlane, a New York-based password manager and digital wallet, has acquired PassOmatic, a New York-based startup that will allow Dashlane to offer automated password-changing features. No financial terms were disclosed. Dashlane has raised around $30 million in VC funding from Bessemer Venture Partners, Rho Ventures, FirstMark Capital and Bernard Liautaud. Read more.

• Man Group PLC has agreed to acquire the investment management contracts for a $1.2 billion AUM portfolio of multi-strategy and strategy-focused funds-of-hedge-funds from Merrill Lynch Alternative Investments. No financial terms were disclosed. www.man.com

FIRMS & FUNDS

• Brentwood Associates, a consumer-focused private equity firm, has closed its fifth fund with $688 million in capital commitments. www.brentwood.com

 

MOVING IN, UP, ON & OUT

• William Frist, former U.S. Senate majority leader and a current partner with private equity firm Cressey & Co., has been named a special advisor to Carrick Capital Partners. www.carrickcapitalpartners.com

• Imram Khan, former head of Internet banking at Credit Suisse, has joined mobile messaging company Snapchat as its first chief strategy officer. Read more.

• Catherine Keating has joined Commonfund as CEO. She previously was with J.P. Morgan Chase as head of investment management for the Americas. She also is chair of the Villanova University board of trustees. www.commonfund.org

• Maryellen Maurer has joined the SEC as a securities compliance examiner. She previously was deputy chief compliance officer with TPG Capital. www.sec.gov

• Dave McDonald has joined Lake Street Capital Markets as head of life sciences investment banking. He previously was chief business officer with SillaJen. www.lakestreetcapitalmarkets.com

• Mark Patterson, co-founder of distressed investment firm MatlinPatterson Global Advisers, is stepping down from as chairman and CEO of the firm, according to Dow Jones. Read more.

• William Wilson has joined Stifel Financial as a managing director in the firm’s high-yield debt capital markets group. He previously was a managing director with CRT Capital Group. www.stifel.com

• Brian Yoon has stepped down as a tech and media investment banker with Lazard, in order to join Time Warner Inc. as executive director of financial planning and analysis. www.timewarner.com

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