A bunch of assorted notes to kick off your Tuesday...
• Counter-intuitive: Every couple of years, there's a big new bucket of deal-flow for private equity secondaries buyers. During the financial crisis, it was liquidity-strapped endowments and pension funds. Since the financial crisis, it has been financial institutions and insurance companies that are worried about various Dodd-Frank and Basel III provisions. Plus some pensions and other institutional investors who have adopted much more active portfolio management strategies.
Today, secondary buyers tell me that they're expecting significant opportunities to come from Middle Eastern sovereign wealth funds and other large investors that have been negatively impacted by the decline in oil prices. Actually, they've been expecting it for a while, but very little has actually come to market so far.
Part of the disconnect may be caused by private equity's own recent success: If funds are providing lots of distributions, then there is less demand for liquidity via secondary sales. If those exits begin to slow, however, expect a flood of secondary deals from major oil-producing sources.
• More secondary stuff: We previously reported that Irving Place Capital is working on a stapled secondary, and word now is that it's secured a lead sponsor (but may need a partner to handle the size). Also seeking a stapled secondary sponsor is Lee Equity Partners, the New York-based private equity firm founded by Tom Lee after he left Boston-based Thomas H. Lee Partners. LEP to date has only raised one fund, a $1.1 billion vehicle of 2006 vintage.
• Follow-up: A few of you wrote in yesterday to note the irony of Walt Disney Co. backing DraftKings, when rival FanDuel's shareholders include an investment firm -- Shamrock Capital Advisors -- that was originally founded as part of Roy Disney's family office. Several years back, however, the Shamrock partners spun out of the family office, and today the family office is only one of many LPs in Shamrock's current fund ($400m vehicle closed in 2010).
• Quiz Time: Can you name the former partner at a big-name private equity firm that just joined a large university endowment to focus on direct investments? Hint: His PE departure was announced in Q4 of last year.
• Omaha offering: Berkshire Hathaway this morning announced that it will purchase an 8.7% stake in Axalta Coating Systems Ltd. (NYSE: AXTA) from The Carlyle Group via a private placement. The deal is valued at $560 million, or $28 per share (Axalta stock closed trading yesterday at $28.33 per share).
Axalta is the former coatings business of DuPont, which Carlyle originally purchased in 2013 before taking it public last November at $19.50 per share. Carlyle holds a 74.1% stake (prior to the Berkshire deal), but recently filed to sell 40 million shares via a secondary offering that would cut its stake to just under 57%.
I've written before about Warren Buffett's apparent hypocrisy when it comes to private equity, via his dealings with 3G Capital. But I'm not going to do that here, even though Buffett has previously bragged about having never bought a company from short-term minded private equity firms that "don't love the business."
Instead, I'm going to posit that Buffett has simply changed his tune/evolved his thinking on private equity. After all, he's now bought into a company owned by The Carlyle Group -- whose co-founder literally coined the term "private equity."
Some of you have asked today via Twitter why I care at all about Buffett and private equity, and his consistency on the matter. Beyond basic journalistic tenets of holding folks accountable, Buffett's negative words on private equity have been used by certain people to pressure public pensions to cut back on PE allocations. In other words, the Oracle's language has consequences. And if his actions suggest philosophical revisions, then it's important to highlight.
• Game Time: Duke won the NCAA men's basketball tournament last night. That means our contest winner is the mysterious Hunter38579. If he or she does not identify themselves by end of day, then we actually have a tie between Josh Stein (partner with DFJ) and Ted Iobst (VP of digital at Atlantic Media). So come on Hunter38579, and make my job easier.
• Publishing note: Tomorrow's Term Sheet will be published from 30k feet, as I'm flying to San Francisco to interview Marc Andreessen tomorrow night at a Fortune Brainstorm Tech dinner. So if it's a bit late, please be sure to blame the in-flight WiFi (and not my possible decision to take a nap).
THE BIG DEAL
• Permira and the Canada Pension Plan Investment Board have agreed to acquire Informatica Corp. (Nasdaq: INFA), a a Redwood City, Calif.-based provider of enterprise data integration software. The deal is valued at $5.3 billion, or $48.75 per share in cash. Rival suitors reportedly had included Thoma Bravo and a joint bid from Hellman & Friedman and Silver Lake Partners. Read more.
VENTURE CAPITAL DEALS
• Quikr, an Indian online classifieds site, has raised $150 million in new VC funding. Steadview Capital was joined by return backers Tiger Global and Investment AB Kinnevik. Read more.
• Playground Global, a new hardware incubator led by Android co-founder and former Google exec Andy Rubin, has raised $48 million in new funding (structured as a limited partnership) Investors include Google, Hewlett-Packard, Hon Hai Precision Industry Co. and Redpoint Ventures (where Rubin will also serve as a venture partner). Read more.
• True North Therapeutics, a South San Francisco-based developer of therapies selectively inhibit the complement system to treat rare diseases, has raised $35 million in Series B funding. OrbiMed led the round, and was joined by return backers Kleiner Perkins Caufield & Byers, MPM Capital, SR One and Baxter Ventures. The company previously raised $22 million. www.truenorthrx.com
• CliQr, a Santa Clara, Calif.-based provider of hybrid cloud migration and management solutions, has raised $20 million in Series C funding. Polaris Partners led the round, and was joined by return backers Foundation Capital, Google Ventures and TransLink Capital. www.cliqr.com
• Livongo Health, a Palo Alto, Calif.-based chronic disease management platform founded by ex-AllScripts CEO Glenn Tullman, has raised $20 million in Series B funding. Kleiner Perkins Caufield & Byers and DFJ were joined by return backer General Catalyst. The company is initially focusing on diabetes. www.livongo.com
• Novu, a Minneapolis-based service platform designed to serve as integrator between hewalthcare payers and providers, has raised $20 million in new VC funding from SSM Partners and Noro-Moseley Partners. www.novu.com
• RedSeal, a Sunnyvale, Calif.-based cybersecurity certification company, has raised $17 million in Series C funding. New investors include Tyco, Math Venture Partners, Pallasite Ventures and DRW. Return backers include Venrock, Sutter Hill, Icon Ventures, Leapfrog and Olympic Ventures. www.redseal.co
• Placester, a Boston-based marketing platform for the home-buying process, has raised $15 million in new funding. New Enterprise Associates led the round, and was joined by return backer Romulus Capital. www.placester.com
• CoreOS Inc., a San Francisco-based provider of open-source enterprise software solutions for Linux containers, has raised $12 million in new VC funding. Google Ventures led the round, and was joined by Kleiner Perkins Caufield & Byers, Fuel Capital and Accel Partners. www.coreos.com
• RealtyShares, a San Francisco-based online marketplace for real estate investing has raised $10 million in Series A funding. Menlo Ventures led the round, and was joined by General Catalyst Partners. www.realityshares.com
• Soha Systems Inc., a Sunnyvale, Calif.-based provider of “instant application security for the cloud-enabled enterprise,” has raised $9.8 million in VC funding from Andreessen Horowitz, Cervin Ventures, Menlo Ventures and Moment Ventures. www.soha.io
• NSONE, a New York-based provider of DNS and traffic management solutions, has raised $5.35 million in Series A funding. Flybridge Capital Partners and Sigma Prime Ventures co-led the round, and were joined by Founder Collective and Center Electric. www.nsone.net
• Admera Health, a South Plainfield, N.J.-based molecular diagnostics startup, has raised an undisclosed amount of Series A funding led by Prime Value Capital Management. Sungent Bioventure also participated. www.admerahealth.com
PRIVATE EQUITY DEALS
• Aurora Capital Group has agreed to acquire Restaurant Technologies Inc., a Mendota Heights, Minn.-based provider of cooking oil management and distribution services to the U.S. foodservice industry, from EQT Partners. No financial terms were disclosed. RTI generated $34 million in EBITDA on $136 million in revenue for 2013, according to EQT’s website. www.rti-inc.com
• Clarkson Eyecare Inc., an Ellisville, Mo.–based eye care provider, has raised an undisclosed amount of growth equity funding from FFL. www.clarksoneyecare.com
• Shore Capital Partners has recapitalized Chicagoland Smile Group, a provider of general dentistry services. No financial terms were disclosed. Shore Capital also has formed Great Lakes Dental, to provide administrative services and support to Chicagoland Smile Group. www.shorecp.com
• Adaptimmune, a UK-based biotech company focused on the use of T-cell therapy to treat cancer and infectious disease, has filed for a $150 million IPO. The company plans to trade on the Nasdaq under ticker symbol ADAP, with BofA Merrill Lynch, Cowen & Co. and Leerink Partners serving as lead underwriters. The company last year raised $104 million in Series A funding, which followed up a strategic collaboration and licensing agreement with GlaxoSmithKline (LSE: GSK) that could be worth upwards of $350 million. Shareholders include New Enterprise Associates (16.59% pre-IPO stake), Immunocore Ltd. (7.55%), OrbiMed (7.11%), Wellington Management, Fidelity Biosciences, Foresite Capital Management, Ridgeback Capital Management, Novo AS, QVT, Rock Springs Capital, VenBio Select and Merlin Nexus. www.adaptimmune.com
• aTyr Pharma Inc., a San Diego-based developer of Physiocrine-based therapeutics to address rare diseases, has filed for an $86.25 million IPO. It plans to trade on the Nasdaq under ticker symbol LIFE, with J.P. Morgan and Citigroup serving as lead underwriters. The pre-revenue company raised a $76 million Series E round earlier this month. Shareholders include Fidelity Investments (13.56% pre-IPO stake), Polaris Partners (10.56%), Domain Associates (10.52%), Alta Partners (10.27%), Cardinal Partners (10.16%), Sofinnova Ventures (8.93%) and Baker Brothers Life Sciences (8.93%). T. Rowe Price, Federated Investors, Deerfield Management, Rock Springs Capital Management, EcoR1 Capital, Sphera Global Healthcare and several undisclosed investors. www.atyrpharma.com
• Bojangles, a Charlotte, N.C.-based chain of around 600 quick-serve chicken restaurants, has filed for a $100 million IPO. It plans to trade on the Nasda under ticker symbol BOJA, with BofA Merrill Lynch, Wells Fargo and Jefferies serving as lead underwriters. The company reports $26 million of net income on $430 million in revenue for 2014, compared to $24 million of net income on $375 million in revenue for 2013. Bojangles is currently owned by Advent International. Read more.
• Press Ganey, a Wakefield, Mass.-based provider of patient experience measurement, performance analytics and strategic advisory solutions for healthcare organizations, has filed for a $100 million IPO. It plans to trade on the NYSE, with Barclays, Goldman Sachs and William Blair serving as lead underwriters. The company reports $15.6 million of net income on $281 million in revenue for 2014, comparted to nearly $1 million in net income on $260 million in revenue for 2013. Press Ganey is backed by Vestar Capital Partners. www.pressganey.com
• Pure Storage Inc., a Mountain View, Calif.-based all-flash enterprise storage array company, is prepping for an IPO that could come later this year, according to Reuters. Underwriters will include Morgan Stanley, Goldman Sachs and Barclays. The company last year raised $225 million in Series F funding at a pre-money valuation north of $3 billion. Wellington Management led that round, and was joined by return backers T. Rowe Price, Tiger Global, Greylock Partners, Index Ventures, Redpoint Ventures and Sutter Hill Ventures. Read more.
• Weight Watchers International (NYSE: WTW) has acquired Weilos, a Y Combinator-backed online fitness and weight loss community, according to TechCrunch. No financial terms were disclosed. Read more.
• FedEx Corp. (NYSE: FDX) has agreed to acquire Dutch shipping and logistics company TNT Express NV (TNTE) for $4.8 billion in cash. Read more.
FIRMS & FUNDS
• Harvest Partners, a New York-based private equity firm focused on the middle markets, has opened a new office in Palo Alto. It will be led by existing managing director Andrew Schoenthal, who will relocate. www.harvestpartners.com
• Privateer Holdings, a Seattle-based private equity firm investing exclusively in legal cannabis, has raised $75 million in Series B funding. Backers include Founders Fund. www.privateerholdings.com
MOVING IN, UP, ON & OUT
• Toby Knapp has joined law firm O’Melveny & Myers as a New York-based partner and co-head of U.S. M&A and private equity. He previously was with Jenner & Block as co-chair of that firm’s private equity and investment funds group. www.omm.com
• Robert O’Neil has joined Avista Capital Partners as an operating executive focused on consumer-related healthcare investments. He previously was worldwide VP of business development for Johnson & Johnson’s consumer group. www.avistacap.com
• Michael Wise has agreed to join BofA Merrill Lynch as vice chairman of global equity capital markets. He previously was head of equity offerings for financial institutions at Goldman Sachs. Read more.
Correction: Roseanne Wincek has joined Institutional Venture Partners as a vice president. Yesterday's issue misstated her new title.
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