Random Ramblings: Fully-inflated edition
Some quick, flu-addled notes as we head into the weekend…
• Fee stuff: Yesterday there was a piece on The Wall Street Journal about how KKR recently “refunded money to investors in some of its buyout funds after regulators found it overcharged them” between 2009 and 2011. Specifically, the WSJ cited transcribed notes from a July call between KKR officials and the Washington State Investment Board, suggesting that the pension system was reimbursed thousands of dollars while overall reimbursements — to all LPs — totaled millions of dollars.
WSJ doesn’t get too deep into the weeds, but my understanding is that most (if not all) of the reimbursements here were related to misallocation of expenses, rather than KKR inappropriately keeping fees on its balance sheet. In other words: KKR has numerous funds, often which participate in the exact same deals (primary LBO funds, co-investment funds, special accounts, etc.). What the SEC seems to have found was that KKR appropriated certain expenses to these various funds incorrectly (i.e., some funds actually got too much reimbursement, while some got too little). To my knowledge, KKR did not ask for expense-related money back from funds that had received more than their fair share.
Regulators also took issue with how KKR failed to properly disclose fee-sharing related to its Capstone consulting arm (total of $6m over 3 years), which also resulted in some reimbursements.
Obviously not good from a compliance perspective, but not as greed-driven as it would have appeared on first glance (at least the first part — Capstone stuff is more worrisome). Perhaps that’s why the SEC only required that KKR reimburse certain funds, rather than slapping the firm with an enforcement action.
No comment on any of this from KKR, natch.
• Unicorn data: Yesterday I forgot to include a link to our “Unicorn List,” which is the Fortune chart with details on all of the privately-held companies valued at $1 billion or more. You can view it here.
• Recommended reading: Reuters has a piece up about how Apollo Global Management is having some trouble finding leveraged financing for its proposed buyout of IT services provider Presidio Inc. from another private equity firm. Some of the holdup relates to Presidio’s lack of hard assets, but then there is this:
Apollo may also be paying a price for its involvement in restructuring Caesars Entertainment Co, at a time when debt and bondholders stand to face losses on roughly $18 billion of debt. “Because Apollo is wiping out the Caesars debt holders, the ‘debt buyer universe has shrunk’ for the Presidio transaction,” a source close to the financing said.
It is fairly rare for coin-operated lenders to let anger over one transaction bleed out into another (even following the financial crisis), but perhaps that is exactly what we’re seeing in this instance. Read the Reuters story by going here.
• Quiz time: Can you name the VC firm that is in talks to kinda-sorta merge with another VC firm? Hint: One of them has been around a lot longer than the other one.
• Homer for life: Yes, I believe him. No, I don’t care what that makes you think of me.
• Have a great weekend…
THE BIG DEAL
• Box Inc., a cloud-based storage company, raised $175 million in its IPO. The company priced 12.5 million shares at $14 per share (above range), for an initial market cap of approximately $1.63 billion. It will trade on the NYSE under ticker symbol BOX, while Morgan Stanley served as left-lead underwriter. Shareholders include DFJ (22.1% pre-IPO stake), USVP (11.2%), Coatue Management (8.6%), General Atlantic (7.3%), Scale Venture Partners (6.4%) and TPG (5.7%). Read more.
VENTURE CAPITAL DEALS
• Antuit Holdings Pte., a Singapore-based provider of enterprise data management solutions, has raised up to $56 million in new equity funding co-led by Goldman Sachs and return backer Zodius Capital. www.antuit.com
• Button, a New York-based provider of customer acquisition and retention solutions for mobile apps, has raised $12 million in Series A funding. Redpoint Ventures led the round, and was joined by Atlas Venture, DCM, Greycroft Partners, Slow Ventures, VaynerRSE and ex-NBA commissioner David Stern. www.usebutton.com
• CodeHS, a San Francisco–based online startup that teaches coding to high schoolers, has raised $1.75 million in VC funding. Investors include NewSchools Venture Fund, Stanford-StartX Fund, Learn Capital, Kapor Capital, Chmod and Seven Peaks Ventures. www.codehs.com
PRIVATE EQUITY DEALS
• BB&T Capital Partners has led a recapitalization of Quick Med Claims, a Pittsburgh-based provider of emergency medical ground and air transportation billing and reimbursement services. No financial terms were disclosed. Leeds Novamark Capital and Wasena Capital Management also participated. www.quickmedclaims.com
• Berkshire Partners and New Balance Holding have agreed to acquire The Rockport Co., a Canton, Mass.-based shoemaker, from Adidas Group AG for $280 million. As part of the deal, New Balance affilifate Drydock Footwear (brands include Cobb Hill, Aravon and Dunham) will be combined with Rockport to form The Rockport Group. www.rockport.com
• Bridge Growth Partners has acquired CRGT Inc., a Reston, Va.–based provider of agile software development, data analytics and cybersecurity services to federal government agencies, from Veritas Capital. No financial terms were disclosed. www.crgt.com
• Encore Rehabilitation Services LLC, a Farmington Hills, Mich.-based provider of rehabilitative therapy services and associated compliance and revenue cycle support services, has raised an undisclosed amount of private equity funding from Revelstoke Capital Partners. www.encorerehabilitation.net
• Jollibee Foods Corp., a listed Philippines-based restaurant operator, said that it plans to partner with a private equity firm to acquire a U.S.-based fast-food company with a market value of at least $1 billion. Read more.
• TPG Capital has held talks about acquiring door-to-door cosmetics retailer Avon Products Inc. (NYSE: AVP), according to Dealreporter. The report sent Avon shares up around 15%, giving the company a market cap of around $3.7 billion. Read more.
• AltheaDx Inc., a San Diego-based molecular diagnostics company focused on personalized medicine, has set its IPO terms to approximately 4.6 million shares being offered at between $12 and $14 per share. It would have an initial market cap of around $161 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol IDGX, with Citigroup and Jefferies serving as lead underwriters. It reports a $5.9 million net loss on $13.6 million in revenue for the first nine months of 2014. Shareholders include Telegraph Hill Partners (43.9% pre-IPO stakew) and Alma Life Sciences (24.5%). www.altheadx.com
• Asante Solutions Inc., a Sunnyvale, Calif.-based maker of disposable insulin pumps for patients with diabetes, has set its IPO terms to 3.5 million shares being offered at between $13 and $15 per share. It would have an initial market cap of around $167 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol PUMP, with Leerink Partners and Cowen & Co. serving as lead underwriters. Shareholders include Novo AS (28.72% pre-IPO stake), Lundbeckfond Invest (26.88%), Sunstone Life Science Ventures (17.68%), Thomas, McNerney & Partners (14.19%), Seed Capital Denmark (13.21%) and De Novo Ventures (9.72%). www.asantesolutions.com
• Carbylan Therapeutics, a Palo Alto, Calif.-based developer of a therapy for sustained relief from pain associated with osteoarthritis, has set its IPO terms to 5.8 million shares being offered at between $12 and $14 per share. It would have an initial market cap of around $198 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol CBYL, with Leerink Partners serving as lead underwriter. Shareholders include InterWest Partners (33.2% pre-IPO stake), Atla Partners (30.2%) and Vivo Ventures (27.8%). www.carbylan.com
• Euronav NV, a Belgium-based provider of shipping and offshore services for the transportation and storage of crude oil, raised $199 million in its IPO. The company priced 16.3 million shares at $12.25 per share (upsized from original plans), and will trade on the NYSE under ticker symbol EURN. Deutsche Bank Securities served as lead underwriter. www.euronav.com
• Syndax Pharmaceuticals Inc., a Waltham, Mass.-based developer of epigenetic therapies for treatment-resistant cancers, has withdrawn its $60 million IPO registration. The company originally filed for the offering last March, before postponing it a few months later. It had planned to trade on the Nasdaq, with Deutsche Bank Securities and Jefferies serving as lead underwriters. Shareholders include Domain Associates (34.3% pre-IPO stake), MPM Capital (29.5%), Forward Ventures (8.2%), RusnanoMedInvest (13.2%) and Forward Ventures (8.2%). www.syndax.com
• Amazon (Nasdaq: AMZN) has agreed to acquire Annapurna Labs, an Israeli chip-maker, for approximately $350 million. Annapurna Labs had raised VC funding from Walden International, although is not currently listed as a portfolio company on the Walden Int’l website. Read more.
• The Los Angeles Dodgers reportedly are in talks to sell a minority ownership stake to South Korean investors. Read more.
• Royal Bank of Canada (TSX: RY) has agreed to acquire Los Angeles-based bank City National Corp. (NYSE: CYN) for approximately $5.4 billion in cash and stock. It would be RBC’s largest-ever acquisition. Read more.
FIRMS & FUNDS
• Caspian Private Equity, a lower middle-market private equity subsidiary of Natixis Global Asset Management, has closed its second fund with over $285 million in capital commitments. www.caspianpe.com
• Eniac Ventures, a New York-based VC firm focused on mobile startups, has closed its third fund with $55 million in capital commitments. www.eniacventures.com
MOVING IN, UP, ON & OUT
• Philippe Costeletos has joined Colony Capital as chairman of international operations. He previously led TPG Capital’s European operations. www.colonyinc.com
• Frazier Healthcare, a health-care focused growth equity firm, has promoted Ben Magnano to general partner and Dan Estes to principal. www.frazierhealthcare.com
• Green Visor Capital, a San Francisco-based VC firm focused on the financial tech sector, has promoted Joe Saunders from general partner to chairman. Saunders joined Green Visor last year, after having previously served as chairman and CEO of Visa Inc. Former Green Visor chairman Rich Marin will continue with the firm as a general partner and member of its investment committee. www.greenvisorcapital.com
• Tim Liu has joined mid-market private equity firm CenterGate Capital as a principal. He previously was a VP with Platinum Equity. www.centergatecapital.com
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