The sky is gray, the valuations keep climbing and I’ve got to drive down to NYC today for a few meetings (thus the early delivery). In other words, it’s time for some Tuesday Talk-Back!
Leading us off are a bunch of notes related to yesterday’s column on state pension funds indirectly investing in a payday lender whose services are illegal within their states.
Anon: “I think you’re treading on a slippery slope with these types of comments. I’m sure teachers would not be happy to know that their pensions… are helping to fund the acquisitions of things like a payday loan company that may be negatively affecting the families of the students they teach. Would they not also be troubled by investments in companies that lay off these same people, or significantly contribute to obesity rates by selling junk food, or contribute in some other way that makes the lives or their students’ families more difficult? I’m certain these pension funds own public securities of companies that engage in dubious acts as well. Should we call Vanguard and ask them to please exclude those companies from its indexes that they sell to these same pension funds? By the time you’re done with all that the pension funds wouldn’t be able to invest in much of anything but cash, so I would be curious to see the bearing on their moral compass after you presented that alternative to them.”
Doug: “Interesting reading on payday lending. Consistent with my experience in mortgage foreclosure processing. Our good state investors don’t care if they are backing Ghengis Khan … if you make them money, silence.”
Another anon: “Your note re: ACE and the pension plan indirect exposure is an accurate and a fair point. However, there are plenty of other examples you could point to in order to ensure plans and investors know how pervasive these investments have been. For example, Golden Gate owned California Check Cashing (basically a payday business) ultimately merging it with Buckeye (owned by Diamond Castle) thereby creating Community Choice. Leonard Green was the largest owner of Dollar Financial for years (Ares was also an investor), now owned by Lonestar Funds.”
Fred: “By your logic, should state pensions ask for carve-outs to investments in pharma companies whose product is legal in Europe but still not approved by the FDA?”
It also is important to note that Frank Rodriguez of JLL Partners rang me about 2 minutes after Term Sheet published yesterday (he was not yet aware the story had run). He stressed that one reason JLL was originally comfortable with ACE was that the company did not try to surreptitiously do business where it wasn’t allowed (there have been accusations that other payday lenders have still tried getting into such states via online platforms). When asked if he had any concerns that JLL funded the deal via public money from states that deem payday lending to be unethical, he dodged by saying that he would not presume to know why payday loans are illegal in certain areas.
Rodriguez adds that the firm did not inform LPs of the CFPB settlement because it “wasn’t material to the business,” and that the settlement did not constitute an admission of wrongdoing. As for why JLL still owns ACE, he said it was a combination of the 08/09 financial crisis and current regulatory uncertainty related to CFPB.
• Atish on Slack’s fundraising rationale: “At least Mr. Butterfield is saying what many founders (and investors) are thinking. One distinction is that Slack has a clear profit path while many companies don’t.”
Greg: “I have to think that one reason investors have gotten so comfortable with Slack is because Butterfield has been through an up-and-down cycle before, and does not seem to have forgotten those earlier lessons.”
• Brian on Ted Ullyot joining Andreessen Horowitz: “He the second person to be hired by a VC firm for a role focused on policy and regulatory affairs. USV hired Nick Grossman to focus on the same thing a few years ago.” A bunch of you wrote in to point this out… apologies for my oversight.
• Tina: “When is the next Liquidity Event?” Not 100% baked in yet, but details should come within a few weeks.
THE BIG DEAL
• TPG Capital has agreed to acquire a majority stake in Montreal-based entertainment group Cirque du Soleil, with Caisse de dépôt et placement du Québec and China’s Fosun acquiring minority positions. The deal is valued at around C$1.5 billion, and is expected to close in Q3. Read more.
VENTURE CAPITAL DEALS
• Oscar, a New York-based health insurance startup, has $145 million in new VC funding at a $1.5 billion valuation. Founders Fund led the round, and was joined by Horizon Ventures, Wellington Management Company and Goldman Sachs. Read more.
• Spirox, a Menlo Park, Calif.-based developer of medical devices for surgical repair of nasal obstructions, has raised $18.5 million in Series B funding. Venrock and Aisling Capital co-led the round, and were joined by return backers Aperture Venture Partners, Correlation Ventures and Western Technology Investment.
• Cnano Technology Ltd., a maker of multi-wall carbon nanotube products for the energy storage, structural and electronics industries, has raised $15 million in Series C funding. GRC SinoGreen Fund led the round, and was joined by return backers Pangaea Ventures, Presidio Partners, WI Harper Group, IDG Capital Partners and Megatop Capitals. www.cnanotechnology.com
• Tal Medical, a Boston-based developer of treatments for depression and other psychiatric conditions, has raised $14 million in new VC funding from existing backer PureTech Ventures. www.talmedical.com
• MyTime, a San Francisco-based online appointment booking tool, has raised $9.25 million in Series B funding. Upfront Ventures led the round, and was joined by Khosla Ventures, Daher Capital, Accelerator Ventures, and Westfield Corp. www.mytime.com
• InTurn, a New York-based marketplace for selling end-of-season/excess inventory to retailers in private online showrooms, has raised $3.6 million in new VC funding. Forerunner Ventures led the round, and was joined by Novel TMT Ventures, Lerer Hippeau Ventures, T5 Capital, Boby Lent (co-founder of Ariba) and seed backer Beanstalk Ventures. www.inturn.co
• Stringify, a Los Gatos, Calif.-based Internet-of-things startup that seeks to “shape the transformation of the space,” has raised $6.3 million in seed funding. ARTIS Ventures led the round, and was joined by OurCrowd. www.stringify.com
• Zhiguoguo, a Beijing-based provider of free trademark registration services, has raised $3.7 million in Series A funding. Matrix Partners China led the round, and was joined by seed backer Legend Star. Read more.
• Outdoor Voices, a New York-based active-wear startup, has raised $1.1 million in seed funding. General Catalyst led the round, and was joined by Red Sea Ventures, Collaborative Fund, SWTLF and Burch Creative Capital. www.outdoorvoices.com
PRIVATE EQUITY DEALS
• KODA Distribution Group, a Stamford, Conn.-based portfolio company of Audax Group and GarMark Advisors, has acquired the Canadian chemicals distribution business of Unipex Group, a French portfolio company of IK Investment Partners. No financial terms were disclosed. www.kodadistribution.com
• Dunn Paper Inc., a Port Huron, Mich.-based portfolio company of Wingate Partners, has acquired the Specialty Mills business of Clearwater Paper Corp. (NYSE: CLW). No financial terms were disclosed, except that Babson Capital Management provided both subordinated debt and an equity co-investment to support the transaction. www.dunnpaper.com
• Harvest Partners has sponsored a recapitalization of VetCor, a Hingham, Mass.-based operator of 137 veterinary hospitals. The deal was done in partnership with existing VetCor shareholder Cressey & Co. www.vetcor.com
• Incline Equity Partners has acquired AFC Holdings, a Tampa, Fla.–based provider of supply chain management solutions and vendor-managed inventory programs to OEMs. No financial terms were disclosed. www.inclineequity.com
• Lightyear Capital has agreed to acquire a majority equity stake in Wealth Enhancement Group, a Plymouth, Minn.-based wealth management firm with $4.7 billion in client assets, from Norwest Equity Partners. No financial terms were disclosed. www.wealthenhancement.com
• Nautic Partners has acquired Source4Teachers, a Cherry Hill, N.J.–based provider of outsourced substitute teacher and paraprofessional managed services to K-12 schools in the eastern U.S. No financial terms were disclosed. www.source4teachers.com
• Norwest Venture Partners has acquired WineAccess Inc., an Ardmore, Penn.–based director-to-consumer wine e-commerce business. No financial terms were disclosed. www.wineaccess.com
• Pine Tree Equity has acquired a minority equity stake in Smile Design Dentistry, a Tampa, Fla.-based provider of dental care services. No financial terms were disclosed. www.thesmiledesign.com
• Sentinel Capital Partners has sponsored a recapitalization of Total Military Management, a Jacksonville, Fla.–based provider of relocation services to U.S. military and government personnel. No financial terms were disclosed. Sellers include TZP Group and BB&T Capital Partners. www.totalmm.com
• Simeio Solutions, a New York-based provider of identity and access management solutions and related services, has secured an undisclosed amount of private equity funding from Welsh, Carson, Anderson & Stowe. www.simeiosolutions.com
• Winona Capital and Prairie Management Group have invested an undisclosed amount in Evereve (f.k.a. Hot Mama), a fashion retailer for moms. www.evereve.com
• Blueprint Medicines, a Cambridge, Mass.-based developer of kinase inhibitors for genomically-defined cancers, has set its IPO terms to 7.19 million shares being offered at between $15 and $17 per share. It would have an initial market cap of $398 million, were it to price in the middle of its range. The pre-revenue company plans to trade on the Nasdaq under ticker symbol BPMC, with Goldman Sachs and Cowen & Co. serving as lead underwriters. Blueprint Medicines has raised around $115 million in VC funding from firms like Third Rock Ventures (41.8% pre-IPO stake), Beacon Bioventures (13.43%), Partner Fund Management, Wellington Management Company, RA Capital, Tavistock Life Sciences, Perceptive Advisors, Sabby Capital, Cowen Investments, Redmile Group, Biotechnology Value Fund, Casdin Capital and Nextech Invest. www.blueprintmedicines.com
• CoLucid Pharmaceuticals Inc., a Durham, N.C.-based developer of oral and intravenous treatments for migraine and other headache pain, has set its IPO terms to 5.36 million shares being offered at between $13 and $15 per share. It would have an initial market cap of $210 million, were it to price in the middle of its range. The pre-revenue company plans to trade on the Nasdaq under ticker symbol CLCD, with Piper Jaffray and Stifel serving as co-lead underwriters. It has raised around $56 million in VC funding from firms like Domain Associates (23.34% pre-IPO stake), Novo Ventures (18.22%), TVM Capital Life Science (10.33%), Care Capital (16.03%), Pappas Ventures (15%), Triathlon Medical Ventures (7%), Auriga Partners and Pearl Street Ventures. www.colucid.com
• Fogo de Chao, a Dallas-based Brazilian steakhouse chain operator owned by Thomas H. Lee Partners, has filed for a $75 million IPO. It plans to trade on the Nasdaq under ticker symbol FOGO, with Jefferies and J.P. Morgan serving as co-lead underwriters. The company reports $17.2 million in net income on $262 million in revenue for fiscal 2014. www.fogodechao.com
• Ardian has agreed to sell is 96.5% stake in Novotema, an Italian rubber component manufacturer to IDEX (NYSE: IEX) for an undisclosed amount. www.novotema.com
• Ecana Corp. (NYSE: ECA) is seeking buyers for its natural gas properties in Louisiana, according to Bloomberg. The deal could be valued at upwards of $1 billion. Read more.
• General Electric (NYSE: GE) is in “early-stage talks” to sell its entire $74 billion U.S. commercial lending and leasing portfolio to Wells Fargo (NYSE: WFC), according to Reuters. Read more.
• Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) has made a $50 billion, or $82 per share, unsolicited takeover offer for rival Mylan (Nasdaq: MYL). Read more.
FIRMS & FUNDS
• Catalyst Capital Group, a Canadian private equity firm focused on distressed situations, has held a US$650 million first close for its fifth fund, which is targeting $1.25 billion (with a $1.5b hard cap). ww.catacapital.com
• Lexington Partners has held a $10.1 billion final close on its eighth private equity secondaries fund. www.lexingtonpartners.com
• I Squared Capital has closed a new infrastructure private equity fund with $3 billion in capital commitments. www.isquaredcapital.com
MOVING IN, UP, ON & OUT
• Ronnie Behar has joined Affinity Equity Partners as head of Southeast Asia operations. He previously was co-head of Southeast Asia M&A for Credit Suisse. Read more.
• Ronald Cami is stepping down as general counsel for TPG Capital after a five-year run. No word yet on his future plans, except that he’ll remain with the firm as it searches for a successor. Read more
• David Haas has joined the South Carolina Retirement System Investment Commission as director of private equity investments. He previously was a senior associate with the University of Virginia Investment Management Company. www.rsic.sc.gov
• Robert Hays has joined Levine Leichtman Capital Partners as a managing director and co-head of investor relations. He previously was director of investor relations at H.I.G. Capital. www.llcp.com
• Lauren King has joined the New York office of Gibson Dunn as an of counsel in the law firm’s investment funds practice. She previously was an associate with Schulte Roth & Zabel. www.gibsondunn.com
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