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Term Sheet — Thursday, May 21

May 21, 2015, 2:14 PM UTC

Random Ramblings

Some notes to kick off your Thursday:

 LP activism? Rob Cox of BreakingViews has an interesting piece up about why Cerberus limited partners like CalSTRS shouldn't sell their stakes in firearms maker Remington Outdoors. Instead, Cox writes, they should agitate for changes like making sure all Remington weapons are sold via distributors.

This echoes, in some ways, what I've heard some LPs begin to discuss about pushing for their general partners -- both VC and PE -- to add more women in senior positions. To date, almost all LP activism has been around financial issues like fees and distribution policies. Could deeper activism be on the horizon?

 New firm alert: Cota Capital has quietly launched as a new investment platform designed to support companies over their full lifecycle, which could mean from seed funding through public equity holdings. Its founding principals are Ullas Naik (ex-Globespan Capital Partners), Babak Poushanchi (ex-Newbrook Capital) and Bobby Yazdani (ex-Signatures Capital, former founder and CEO of Saba). Naik declined comment.

 Speaking of new efforts: A regulatory filing shows that True Ventures is raising upwards of $175 million for a new “select” fund. No word yet on the investment strategy, but it looks like an opportunity fund.

 Thinking aloud: There is a cottage industry right now in bashing Silicon Valley, largely for claiming that its entrepreneurial labors will change the world in positive ways. And the argument -- including this new piece in GQ -- uses such startups as Clinkle and Yo as emblematic of the startup scene -- contrasted with exceptions like Facebook and Uber.

The reality, however, is that Clinkle and Yo are also exceptions on the other side of the spectrum. Yes, most startups either fail or fall well short of expectations. And the vast middle only end up impacting the world in minor ways. But that's a far cry from suggesting that there only are a small handful of companies who can lay valid claim to reaching for the highest ring.

For example, today's VC deals section includes a company called Metabiota that is using software to predict and help prevent the outbreak of deadly epidemics. Does the existence of Clinkle somehow tarnish Metabiota's noble goals? Is a community's overall contribution diminished because it may include an over-representation of narcissists? To me, Silicon Valley just seems to be a very gray place that gets painted too often with only black or white brushes.

 Horrible update: Gurbaksh “G” Chahal, the serial entrepreneur who was fired from his last startup after pleading guilty to beating up an ex-girlfriend, is now facing a revocation of his probation due to an alleged violent incident with a later girlfriend. This comes on top of his new company, Gravity4, being sued by a former female employee for age and gender discrimination. Read more here.

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 Sinocare Inc. (Shanghai: 300298) has partnered with Goldstone Investment Co. (a unit of Citic Securities) to bid around $1 billion for Bayer AG’s diabetes devices business, according to Bloomberg. This would rival an existing offer from Panasonic Healthcare Co., a portfolio company of KKR. Read more.


 Metabiota, a San Francisco-based developer of epidemic prediction and prevention software, has raised $30 million in Series A funding. RSTP led the round, and was joined by Capricorn Healthcare, WP Global Partners, Industry Ventures and Data Collective. Read more.

Jiff, a Palo Alto, Calif.-based enterprise health benefits platform, has raised $23.3 million in Series C funding. Rosemark Capital led the round, and was joined by GE Ventures and return backers Venrock Associates, Aberdare Partners and Aeris Capital.

 Edo Interactive, a Nashville, Tenn.-based provider of ad-tech solutions that leverage payment networks, has raised $20 million in Series E funding. Backers include VantagePoint Capital Partners, Baird Capital and several “Nashville-based investment firms.” The company also named Souheil Badran (ex-Digital River) as president and CEO.

 Maana, a Palo Alto, Calif.-based provider of search engine technology for “big-data-fueled solutions,” has raised $11 million in Series A funding from Chevron Technology Ventures, ConocoPhillips Technology Ventures, Frost Data Capital, GE Ventures and Intel Capital. The company previously raised around $3 million in seed funding.

 Glowforge, a Seattle-based developer of 3D laser printers, has raised $9 million in Series A funding co-led by Foundry Group and True Ventures. Also participating are former MakerBot CEOs Bre Pettis and Jenny Lawton.

Wibbitz, a New York-based text-to-video startup, has raised $8 million in Series B funding. NantMobile led the round, and was joined by return backers Horizon Ventures, lool ventures, Initial Capital and Kima Ventures.

Iris PR Software, a Phoenix-based provider of software for day-to-day needs of PR professionals, has raised $1 million in seed funding from Arizona angel groups.

Dating LATAM, a Peru-based online dating startup, has raised an undisclosed amount of VC funding from SparkLabs Global Ventures.

Stripe, a San Francisco-based online payment infrastructure company, is in talks to raise new VC funding at around a $5 billion valuation, according to Re/Code. Read more.


 Aavid Corp., a Laconia, N.H.-based provider of thermal management solutions, has acquired Kunze-Folien GmbH, a German maker of thermally-conductive films, heat sinks and transistor clips for power and other electronic environments. No financial terms were disclosed. Aavid is a portfolio company of Audax Group.

 Air Medical Group Holdings, a portfolio company of KKR, has agreed to acquire Summit Air Ambulance, a Meridian, Idaho-based provider of air ambulance services, from Texas Next Capital. No financial terms were disclosed.

 Allied Aerofoam Product LLC, a Tampa, Fla.–based foam fabricator, has raised an undisclosed amount of growth equity funding from Levine Leichtman Capital Partners.

 Charlesbank Capital Partners and M/C Partners have agreed to acquire the IT infrastructure business of Acxiom (Nasdaq: ACXM) for upwards of $190 million (including $140m at closing and $50m in earn-outs).

 Cinven has increased its offer for state-controlled Telekom Slovenia from €110 per share to €130 per share. Read more.

 D.E. Shaw Renewable Investments and Bright Plain Renewable Energy have acquired two solar projects in Indianapolis that were developed by Community Energy Inc. No financial terms were disclosed.

 Entrepreneur Venture has sponsored a management buyout of Fleurus Presse, a French children’s magazine publisher, from OpenGate Capital. No financial terms were disclosed.

 HgCapital has agreed to acquire The Foundry, a UK-based provider of software for creative industries like visual design, from The Carlyle Group for £200 million.

 The Jordan Co. has acquired DiversiTech Corp., a Duluth, Ga.-based maker of HVACR products for the repair, replacement and installation markets. No financial terms were disclosed. Sellers include Peachtree Equity Partners and High Street Capital.

 Rightpoint, a Chicago-based digital agency and tech consultancy, has raised $55 million in equity funding from Stella Point Capital.


 Bain Capital has picked Nordea, Deutsche Bank and Morgan Stanley to lead a Stockholm flotation for Swedish plumbing and electrical systems group Bravida, according to Reuters. The IPO is expected to come later this year, and could value Bravida north of $1.2 billion. Read more.

 Baozun Inc., a Chinese brand e-commerce solutions provider, raised $110 million in its IPO. The company priced 11 million shares at $10 per share (below $12-$14 offering range). It will trade on the Nasdaq under ticker symbol BZUN, while Morgan Stanley, Credit Suisse and BofA Merrill Lynch served as lead underwriters. The company reports a $9.6 million net loss on $255 million in revenue for 2014. Shareholders include Alibaba Group (23.5% pre-IPO stake).

 Clayton Dubilier & Rice is beginning to interview banks for an IPO of Mauser, just one year after acquiring the German packaging company for around €1.25 billion, according to Reuters. The floatation could come later this year or in early 2016. Read more.

 Community Healthcare Trust, a Franklin, Tenn.-based REIT focused on acquiring non-urban healthcare properties, raised $119 million in its IPO. The company priced 6.3 million shares at $19 per share (low end of $19-$21 range). It will trade on the NYSE under ticker symbol CHCT, whileSandler O'Neill & Partners and SunTrust Robinson Humphrey served as lead underwriters.

 Press Ganey, a Wakefield, Mass.-based provider of patient experience measurement, performance analytics and strategic advisory solutions for healthcare organizations, raised $233 million in its IPO. The company priced 8.9 million shares at $25 per share (above $22-$24 range), for an initial market cap of approximately $1.3 billion. The company will trade on the NYSE, while Barclays, Goldman Sachs and William Blair served as lead underwriters. It 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.

 Shopify Inc., an Ottawa-based cloud commerce platform for small and mid-sized businesses, $14-$16 range), for an initial market cap of approximately $1.27 billion. It will trade on the NYSE and TSX under ticker symbols SHOP and SH, respectively. Morgan Stanley, Credit Suisse and RBC Capital Markets served as lead underwriters. Shopify reports a $22 million net loss on $105 million in revenue for 2014, compared to a $5 million net loss on $50 million in revenue for 2013. It had raised around $122 million in VC funding from firms like Bessemer Venture Partners (30.28% pre-IPO stake), FirstMark Capital (11.87%), OMERS Ventures (6.05%), Georgian Partners (5.48%) and Felicis Ventures. Read more.


 BelHealth Investment Partners has agreed to sell Aureus Health Services, a Pittsburgh-based specialty pharmacy, to Meijer. No financial terms were disclosed.

 The Blackstone Group has sold a 25% stake in Irish telecom company Eircom to hedge fund Anchorage Capital Group, according to Reuters. The move comes shortly after Eircom rejected a $3.66 billion buyout offer from an undisclosed bidder. Blackstone will retain a 5% position. Read more.

 TheLadders, a VC-backed job site started in 2003, is nearing a sale, according to Fortune. Read more.

 Warburg Pincus said that it will sell 27.3 million of its 45.7 million shares in MBIA (NYSE: MBIA), with MBIA’s National Public Finance Guarantee Corp. buying 8 million of the offered shares. MBIA shares opened trading this morning at $9.06 each. Read more.


 CVS Health Corp. (NYSE: CVS) is in “advanced talks” to acquire nursing home pharmacy operator Omnicare Inc. (NYSE: OCR), which has a current market cap of around $9.2 billion, according to Bloomberg. Read more.

 DHR International Inc. has entered exclusive negotiations to acquire executive search firm CTPartners Executive Search Inc. (AMEX: CTP). No pricing terms have been disclosed, except that the indicated preliminary price range is below the $7 per share that DHR previously proposed to pay in a February expression of interest. CTPartners has a current market cap of around $27 million.

 Handy, a New York-based provider of on-demand cleaning, plumbing and other home services, is in talks to acquire Homejoy, a San Francisco–based provider of on-demand home cleaning, according to TechCrunch. Handy has raised over $60 million from firms like General Catalyst, Highland Capital Partners, Sound Ventures, TPG Growth and Revolution LLC. Homejoy has raised nearly $40 million from firms like First Round Capital, Google Ventures and Redpoint Ventures. Read more.

 Wave Broadband, a Kirkland, Wash.-based gigabit fiber network operator, has raised $130 million in new funding via a bond sale led by Deutsche Bank. Read more.

 Zuora, a Foster City, Calif.-based provider of SaaS solutions for managing subscription services, has acquired Frontleaf, an Oakland–based provider of customer usage analytics. No financial terms were disclosed. Zuora has raised over $200 million in VC funding from firms like Benchmark, Vulcan Capital, Wellington Management, BlackRock and Passport Capital.


 Glilot Capital Partners, an Israeli venture capital firm focused on early-stage enterprise software companies, has closed its second fund with $77 million in capital commitments.

 Ignition Partners has closed its sixth VC fund with $200 million in capital commitments.

 Osage University Partners has closed its second VC fund with $215 million in capital commitments.


 Pablo Cagnoni, former president of Onyx Pharmaceuticals, has joined MPM Capital as a managing director. He also is co-founder of Vesuvius, an MPM-founded cancer immunotherapy company where he Cagnoni will serve as president and CEO.

 Todd Lachman has joined Altamont Capital Partners as an operating partner, with a focus on consumer packaged goods. He previously was global president of the Mars Petcare business.

 Benjamin Lawsky said that he is stepping down as superintendent of the New York Department of Financial Services. He is expected to open his own firm and begin lecturing at Stanford. No successor has been named. Read more.

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