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Term Sheet — Monday, June 15

Random Ramblings

Some very quick notes to kick off your Monday…

• ROI: Today’s big deal is that Canadian public pension system OMERS has agreed to acquire UK-based Environmental Resources Management for $1.7 billion. Sellers include Charterhouse Capital Partners, which acquired a 55% stake in ERM four years ago.

A source familiar with the situation says that Charterhouse will generate a 2.4x cash-on-cash return from the sale, and that ERM’s EBITDA rose by 55% during the firm’s ownership. It’s also worth noting that ERM’s six bolt-on acquisitions since 2011 were funded by the company itself, rather than by Charterhouse.

• VC funds are the new perfumes: It’s becoming difficult to keep track of all the entertainers who are launching venture capital funds. The latest appears to be Snoop Dogg, per an SEC filing. This is likely the pot biz-focused fund that TechCrunch first reported on earlier this year, particularly given the fund’s name (Casa Verde Capital) and size ($25 million). Looks like most of his partners are also from the entertainment world, with existing ties to Snoop.

• Pivot: Quirky is just days away from raising a new round of venture capital funding, Fortune has learned, but the product development company now has a much different business model than it did when it last pitched investors in 2013. Namely, the New York-based company will no longer make any of its own products. It also may have a different relationship with Wink, a wholly-owned home automation subsidiary that was quietly put up for sale earlier this year (the sale didn’t take, however, and Wink now also is raising new cash). Read more here.

• Divergence: After a season that has seemed ripped from real headlines, last night’s episode of HBO’s Silicon Valley ended with a cliffhanger that reeked of antiquated venture capital caricature, rather than anything that currently happens. Yes, it’s a sitcom. But it had seemed to be striving for something a bit more authentic…

• Deal data: Private equity deal activity has come roaring back, according to new data from Thomson Reuters. If shows global private equity volume is up 42% YTD, compared to a 36% bump for overall global M&A. And the private equity increase is even more pronounced in the U.S., where the YTD figure is `108% higher than 2014.

• Where in the world? I plan to spend a bunch of tomorrow and Wednesday at the SuperReturn U.S. event in Boston. I’ll be the guy not in a suit, so be sure to say hello…


• OMERS has agreed to acquire Environmental Resources Management, a London–based environmental consultancy, for US$1.7 billion from Charterhouse Capital Partners.


• Aledade, a Bethesda, Md.-based tech startups that helps physician groups form accountable care organizations, has raised $30 million in Series B funding. ARCH Venture Partners led the round, and was joined by return backer Venrock.

• Milestone Pharmaceuticals Inc., a Montreal-based developer of cardiovascular treatments, has raised US$17 million in Series B funding. Domain Associates led the round, and was joined by return backers Fonds de solidarité FTQ (FSTQ), Pappas Ventures, BDC Capital, GO Capital, and iNovia Capital.

• Avalon Ventures announced the launch of three new companies via its platform partnership with GSK, with each company receiving $10 million in Series A funding. They are: Adrenergics Inc. (treatments for dilated cardiomyopathy), CadheRx Therapeutics Inc. (solid tumor treatments) and Calporta Therapeutics Inc. (treatment of Niemann-Pick C Disease).


• AirMedia Group Inc. (Nasdaq: AMCN) has agreed to sell 75% of its advertising business to private equity firm Beijing Longde Wenchuang Fund Management Co. for approximately $338 million.

• Career Step LLC, a Provo, Utah–based portfolio company of Revelstoke Capital Partners, has acquired Emergency Certifications Inc., a Kirkland, Wash.-based provider of online continuing education in the healthcare space. No financial terms were disclosed.

• Dwyer Group Inc., a franchising portfolio platform sponsored by The Riverside Company, has acquired Service Brands International, an Ann Arbor, Mich.-based multi-concept franchise system that includes Molly Maid, Mr. Handyman and ProTect Painters. No financial terms were disclosed, except that SBI generates $283 million system-wide sales.

• H.I.G. Capital has acquired ATX Networks Corp., a Canadian maker of RF and digital video processing equipment for cable operators, private video networks, A/V integrators and telecom companies. No financial terms were disclosed. Sellers include Pamlico Capital.

• Intelligent Group, a Belgian provider of hosting services, has raised an undisclosed amount of growth equity funding from Waterland Private Equity.

• Riverside Partners has acquired Contractor Management Services, a Phoenix–based provider of compliance software and payment settlement services for independent contractors.

• Veritas Capital has acquired Emergency Communications Network, an Ormond Beach, Fla.-based mass notification system, from The Riverside Company for an undisclosed amount.


• Cerecor Inc., a Baltimore-based developer of drugs to treat neurological and psychiatric disorders, has filed for a $31.63 million IPO. It plans to trade on the Nasdaq under ticker symbol CERC, with The Maxim Group serving as underwriter. Shareholders in the pre-IPO company include New Enterprise Associates (12.9% pre-IPO stake), Apple Tree Partners (12.9%) and MPM Capital (12.9%).

• ProNAi Therapeutics Inc., a Plymouth, Minn.-based developer of nucleic acid therapeutics, has filed for an $86.25 million IPO. It plans to trade on the Nasdaq under ticker symbol DNAI, with Jefferies and BofA Merrill Lynch serving as lead underwriters. The pre-revenue company has raised around $80 million in VC funding, from firms like Vivo Ventures (11% pre-IPO stake), Frazier Healthcare Ventures (9.8%), Orbimed Advisors (9%), Adams Street Partners (5.8%), RA Capital Management, Caxton Alternative Management, Hopen Life Science Ventures, Sectoral Asset Management, Janus Capital Management, Capital Midwest Fund, Apjohn Ventures Fund, Amherst Fund and Grand Angels.

Red Star Macalline Group Corp., a Chinese home-improvement retailer backed by Warburg Pincus, is raising upwards of $931 million in a Hong Kong IPO. Read more.

• Ten companies are expected to price IPOs on U.S. exchanges this week. They are: Fitbit, Univar, MindBody, Fogo de Chao, 8point3 Energy Partners LP, Cynapsus Therapeutics, Principal Solar, Nivalis Therapeutics, Ritter Pharmaceuticals and Yulong Eco-Materials. Read more.


• Comverse (Nasdaq: CNSI) has agreed to acquire Acision, a UK-based provider of mobile messaging and engagement services. The deal is valued at upwards of $245 million in cash, stock and earnouts. Sellers include Access Industries, Atlantic Bridge Capital and HarbourVest Partners.

• NMC Health PLC (LSE: NMC) has agreed to acquire ProVita, a provider of long-term medical care in the UAE, for $160.6 million from TVM Capital Healthcare Partners, the Olayan Group, Al Zarooni Emirates Investment and other minority shareholders.

Summit Partners has hired Jefferies to find a buyer for Germany-based currency-trading platform 360T for upwards of $675 million, according to Reuters. Read more.


• Colt Defense LLC, a West Hartford, Conn.-based firearms maker whose owners include Sciens Capital, has filed Chapter 11 bankruptcy protection, two years after losing a key U.S. Army contract. Read more.

• Cox Automotive Inc. has agreed to acquire Dealertrack Technologies Inc. (Nasdaq: TRAK), a Lake Success, N.Y.–based provider of software solutions and services for automotive retailers, for around $4 billion in cash, or $63.25 per share (61.39% premium over Friday’s closing price). Read more.

• iDreamSky Technology Ltd. (Nasdaq: DSKY), a Chinese mobile game publishing platform, said that it has received a $14 per ADS non-binding takeover offer from company chairman and CEO Michael Xiangyu Chen.

• HTC (Taiwan: 2498) said that it “will not consider” and acquisition offer from rival Taiwanese tech firm Asus (Taiwan: 2357), were it to come (which it has not yet). Read more.

• Hudson’s Bay Co. (TSX: HBC) has agreed to acquire European department store and apparel store chains Galeria Kaufhof, Galeria Inno and Sportarena from Metro AG (DB: MEO) for approximately €2.82 billion. Read more.

• Target (NYSE: TGT) has agreed to sell its 1,660 pharmacies and 80 clinics to CVS Health (NYSE: CVS) for approximately $1.9 billion, with the “stores within a store” locations being rebranded as CVS/pharmacy and MinuteClinic. Read more.

• United Technologies (NYSE: UTX) said that it is moving forward with its efforts to divest of its Sikorsky helicopter unit, and will decide between a spinoff and sale by the end of Q3. Read more.


• Castlelake, a Minneapolis-based private equity firm focused on distressed assets, is raising $1.5 billion for its fourth fund, according to LBO Wire.


• BNY Mellon has named Alex Flannigan as global head of private equity and real estate fund services. He will continue to be based in Ireland. Flannigan previously was global head of product management for BNY Mellon’s Alternative Investment Services business.

• Neal Costello is rejoining AlpInvest Partners as a managing director on the firm’s secondaries team, and a member of AlpInvest’s investment committee. He previously worked with AlpInvest between 2003 and 2013, before leaving to join the Canada Pension Plan Investment Board.

• Friedman, Fleischer & Lowe has promoted Aaron Money to senior managing director. He joined the firm in 2003, and serves on the boards of WellStreet Urgent Care, Benevis LLC, C.H.I. Overhead Doors, EyeMart Express, Midwest Dental and Speedy Cash.

• Tyler Mayoras has joined Advantage Capital Partners as a principal focused on agribusiness. He previously was with O’Keefe as a managing director and co-head of the firm’s food and agribusiness practice.

• Colleen Taylor has joined Y Combinator as editorial director. She previously spent more than three years as a reporter with TechCrunch.

• Solomon Wifa has joined law firm Willkie Farr & Gallagher LLP as a London-based partner focused on investment funds. He previously was a partner with O’Melveny & Myers.

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