Random Ramblings
Yesterday we reported on the site that VC-backed gaming company OUYA is on the auction block after tripping a debt covenant. Investment bank Mesa Global is managing the process, according to a confidential memo from OUYA CEO Julie Ehrman, who added that, given the debtholder's timeline, "we are looking for expressions of interest by the end of this month." Three related notes:
1. History: OUYA first garnered attention for its massively successful Kickstarter campaign in 2012, which raised around $8.6 million to fund a gaming "miniconsole." It then raised $15 million in eaerly 2013 from such firms as Kleiner Perkins, Mayfield and Shasta Ventures. What it didn't announce, however, was that it also raised a sizable amount of venture debt funding from TriplePoint Capital. When the console sales slumped, it focused more on its own games library, striking strategic partnerships with such companies as Xiaomi and Alibaba.
2. Speaking of Alibaba: Ouch! In addition to the product partnership, Alibaba invested $10 million into OUYA earlier this year. Now it goes poof (and also suggests that the venture debt raise was in excess of $10 million). A source familiar with the situation says that Alibaba was aware of the looming debt deadlines, but believed the terms could be restructured.
3. Buyer beware: Unfortunately for OUYA (and its investors), however, it does not appear that TriplePoint was terribly flexible. From the outside, it looks a bit like what happened recently between GigaOm and Silicon Valley Bank (lthough I don't know the particulars of either negotiation). There has been a major venture debt push by VC firms in recent years, but I do wonder how these public experiences/executions will affect entrepreneur willingness to accept such securities in the future.
• Update: In late 2013, we reported that healthcare tech VCs Michael Greeley and Bill Geary had stepped down as partners with their firms (Flybridge Capital Partners and Northbridge Venture Partners, respectively), in order to join Connecticut Foundation Medical Partners as general partners in charge of a new Boston office. This morning comes word that Foundation Medical Partners has rebranded as Flare Capital Partners, and has raised $200 million for its first fund with the revised team. It also has named Kristen Laguerre (ex-Atlas Venture) as a partner and chief financial officer.
• Fund expansion: Seed-stage firm Slow Ventures this morning announced that it has raised $65 million for its fourth fund. From a personnel perspective, Kevin Colleran (ex-Facebook, venture partner with General Catalyst) will be leading the day-to-day from Boston as managing partner, while co-founding partner Dave Morin will continue to serve as CEO of Path.
Both men are Facebook alumni, as is new Slow Ventures partner Sam Lessin (who has been helping out as "the intern" at wife Jessica's media startup, The Information). Colleran says that Lessin "will likely start a new company (separate from The Information) at some point in the next couple of years (that the new fund will back)... which we are totally fine with under our current structure."
• Answer Key: Yesterday I asked you to name the historically East Coast-based venture capital firm that just named one of its West Coast partners as its sole managing partner? The answer was Highland Capital Partners, which recently gave Palo Alto-based Peter Bell its top title.
THE BIG DEAL
• Spectrum Brands Holdings Inc. (NYSE: SPB) has agreed to acquire Armored AutoGroup, maker of Armor All and STP auto products, from Avista Capital Partners for $1.4 billion in cash and assumed debt. www.spectrumbrands.com
VENTURE CAPITAL DEALS
• Infinidat, a Needham, Mass.-based provider of enterprise-class storage solutions, has raised $150 million in growth equity funding at a $1.2 billion post-money valuation led by TPG Growth. www.infinidat.com
• CRISPR Therapeutics, a Swiss developer of gene-editing technology, has raised $64 million in new VC funding ($35m expansion of Series A and $29m Series B). SR One and Celgene Corp. led the Series A and Series B rounds, respectively, and were joined by New Enterprise Associates and Abingworth. www.crisprtx.com
• Validic, a Durham, N.C.-based digital health platform, has raised $12.5 million in Series B funding led by Kaiser Permanente Ventures. Read more.
• NetBase, a Mountain View, Calif.-based provider of social media analytics, has raised $9 million in Series E funding. ORIX Ventures led the round, and was joined by Thomvest Ventures. www.netbase.com
• Ninox Medical, an Israeli maker of a wearable device for the treatment of obstructive sleep apnea, has raised $10 million in Series B funding. Mérieux Développement and Pitango Venture Capital co-led the round, and were joined by return backer Xenia Venture Capital. www.ninox-med.com
• Skyward, a Portland, Ore.-based information management platform for commercial drone operators, has raised $4.1 million in new VC funding from Draper Associates, Founders Co-0p, Norwest Venture Partners, Techstars Ventures, Verizon Ventures and Voyager Capital. www.skyward.io
• Tracxn, a Palo Alto, Calif.-based research platform for private market investors., has raised $3.5 million in Series A funding from SAIF Partners. www.tracxn.com
• XOEye Technologies, a Nashville, Tenn.-based provider of enterprise wearables solutions, has raised $1.9 million in Series A funding. IncWell led the round, and was joined by return backers Crestlight Venture and Selous Venture Society. www.xoeye.com
• ThreatQuotient Inc., a Vienna, Va.-based provider of an on-premise threat intelligence platform, has raised $1.5 million in seed funding from Blu Venture Investors, the Center for Innovative Technology and the Virginia Tech Investor Network. www.threatq.com
PRIVATE EQUITY DEALS
• Aperion Management has sponsored a recapitalization of IDR Marketing Partners (a.k.a. BrandShare), a Berwyn, Penn.-based ecommerce media network. Leeds Novamark Capital also provided subordinated debt and an equity co-investment. No financial terms were disclosed. www.brandshare.us
• AssuredPartners, a Lake Mary, Fla.-based insurance brokerage platform owned by GTCR, has acquired Colonial Insurance Agency, a Montgomery, Ala.-based provider of property, casualty and workers’ compensation products. No financial terms were disclosed. www.assuredptr.com
• CVC Capital Partners and KKR have signaled interest in acquiring German perfume retailer Douglas, according to Reuters. Douglas owner Advent International is currently prepping a €3 billion floatation for the company, but may opt for a sale process. Other likely suitors include LVM and CVS Health Corp. Read more. Read more.
• Francisco Partners has agreed to acquire HealthcareSource, a Woburn, Mass.–based provider of talent management solutions for healthcare. No financial terms were disclosed. Sellers include Insight Venture Partners and Bulger Capital. www.healthcaresource.com
• FSN Capital has agreed to acquire Fitness World AS, a Danish fitness club operator. No financial terms were disclosed. www.fsncapital.com
IPOs
• Enviva Partners LP, a Bethesda, Md.-based provider of utility-grade wood pellets to large power generators, raised $200 million in its IPO. The company priced 10 million shares at $20 per share (middle of $19-$21 range), for an initial market cap of $476 million. It will trade on the NYSE under ticker symbol EVA, while Barclays served as left-lead underwriter. The company is owned by Riverstone/Carlyle Renewable Energy Partners. www.envivabiomass.com
• HTG Molecular Diagnostics, a Tucson, Ariz.-based provider of a "platform to facilitate the routine use of complex molecular profiling," has set its IPO terms to 3.57 million shares at between $13 and $15 per share. It would have an initial market cap of around $94 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol HTGM, with Leerink Partners serving as lead underwriter. It reports a $9.8 million net loss on around $2 million in revenue for the first nine months of 2014. Shareholders include Novo AS (24.8% pre-IPO stake), S.R. One (19.6%), Merck Capital Ventures (19.5%), Fletcher Spaght Ventures (12.3%), Solstice Capital (6.1%) and Valley Ventures (5.6%). www.htgmolecular.com
• MMI International, a Singapore-based precision engineering company owned by KKR, is prepping a $300 million IPO for later this year, according to the WSJ. Read more.
• Viking Therapeutics Inc., a San Diego-based developer of therapeutics for treating metabolic and endocrine disorders, raised $24 million in its IPO. The company priced 3 million shares at $8 per share, compared to original plans to offer 5 million shares at between $10 and $12 per share. The pre-revenue company will trade on the Nasdaq under ticker symbol VKTX, with Oppenheimer & Co. and Roth Capital Partners serving as lead underwriters.www.vikingtherapeutics.com
EXITS
• Advent International is in talks to sell its 72% stake in India’s CARE Hospitals for between $250 million and $300 million, according to Reuters. Suitors include The Carlyle Group, IHH Healthcare Bhd (Malaysia), Manipal Hospitals (India) and Fortis Healthcare (India). Read more.
• Terra Firma has hired BofA Merrill Lynch to explore a sale of EverPower Wind, a Pittsburgh–based wind energy project company, according to Dow Jones. The deal could be valued at around $1.5 billion. Read more.
• Twitter (NYSE: TWTR) has agreed to acquire TellApart, a Burlingame, Calif.–based provider of personalized marketing solutions for omnichannel commerce. No financial terms were disclosed. TellApart had raised over $17 million in VC funding from firms like Greylock Partners and Bain Capital Ventures. Read more.
OTHER DEALS
• BigCommerce, an Austin, Texas-based e-commerce platform for SMBs, has acquired Zing, an Austin, Texas–based provider of mobile retail technologies. No financial terms were disclosed. BigCommerce last year raised $50 million at a Series D funding that valued the company north of $500 million. Shareholders include General Catalyst, Telstra Ventures, American Express, SoftBank Capital and Revolution Growth. www.bigcommerce.com
• Cendyn, a Boca Raton, Fla.-based provider of online interactive marketing solutions, has acquired Ovations Management Solutions, an Atlanta-based corporate ticket management company. No financial terms were disclosed. www.cendyn.com
• Scientific Drilling International, a Houston, Texas–based directional drilling and wellbore placement services company, has acquired Marksman Ranging Technologies, a Canadian provider of magnetic ranging technology and services. No financial terms were disclosed. www.scientificdrilling.com
• SolarWinds (NYSE: SWI) has acquired Papertrail, a Seattle–based provider of cloud-based log management solutions, for $41 million. www.papertrail.com
• Starwood Hotels & Resorts Worldwide (NYSE: HOT) said that it is exploring strategic and financial alternatives, and that “no option is off the table.” The hotel operator has a current market cap of around $13.8 billion. Read more.
• XPO Logistics Inc. (NYSE: XPO) has agreed to acquire a majority stake in Norbert Dentressangle SA (Paris: GND), a French provider of contract logistics, for €2.17 billion. The deal gives Norbert Dentressangle a total enterprise value of €3.24 billion (including net debt). www.norbert-dentressangle.com
FIRMS & FUNDS
• The Carlyle Group has closed its second Brazil-focused fund with nearly $238 million in capital commitments, compared to a reported target of $452 million. Read more.
• M-III Partners has launched as an advisory and principal investment firm focused on under-performing companies. Its co-founders are Suleman Lunat, a former senior principal in the opportunistic credit group of Apollo Global Management, and Mo Meghji, previously executive VP of Springleaf Financial Services. www.miiipartners.com
• Napier Park Global Capital has closed a new aircraft leasing fund with $454 million in capital commitments. www.napierparkglobal.com
• Staple Street Capital has closed its second fund with $265 million in capital commitments. The New York-based private equity firm focuses on mid-market companies facing organizational challenges, such as orphaned corporate units. www.staplestreetcapital.com
MOVING IN, UP, ON & OUT
• Tjarko Hektor has stepped down as head of secondaries at Carlyle Group unit AlpInvest. Read more.
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