Skip to Content

Term Sheet — Monday, June 28

Random Ramblings

A bunch of notes to kick off your holiday-shortened week…

• Going public: First Round Capital this morning has taken the unusual step of publishing its most recent quarterly letter to limited partners. It concerns the early-stage VC firm’s thoughts on rising valuations and the possibility of a bubble. “We get asked about this a lot and had thought about writing something publicly, but then realized that we’d already said what we wanted to say in our LP letter, so we chose to share that,” explains First Round partner Josh Kopelman.

You can read the full letter by going here. For those with less time, here’s the quick synopsis: First Round doesn’t claim to know if there is or isn’t a “bubble” in private tech valuations. But it does believe that too few VC firms are considering how increased entry prices must be accompanied by similarly increased exit prices, or else returns will suffer.

Moreover, First Round points out that a VC lesson from the dotcom bubble was that the best firms didn’t stray too far from their knitting in order to chase outsized opportunities. Just because there’s a lot more capital in market, that doesn’t mean your firm needs to put a lot more capital to work. For First Round, that’s meant keeping fund sizes static and increasing the threshold for new deals. If a typical deal costs 30% more than it did several years ago, then First Round wants to be 30% more certain. Yes, that does sound like a small strategic shift, but it also reflects the greater portfolio concentration that comes with higher deal prices without corresponding fund size increases.

• Winner winner, VC dinner: Earlier this year we told you about how Atlas Venture was splitting in half, and that the IT-focused group has launched a lucrative contest to find its new name. In short: The firm crowd-sourced suggestions, with the winner to receive a $50,000 “investment” in the group’s new $200 million fund (half of which would be the winner’s to keep — assuming the fund generates profits — while the other half would be earmarked to a TUGG nonprofit of the winner’s choice).

More than 16,000 names were suggested, and this morning we have a winner: The firm is now known as Accomplice, which was chosen to highlight the idea that VCs work in the background, while the focus should be on entrepreneurs.

It was suggested by Zaqary Whitnack, a Sacramento-based mobile and tech consultant who picked Youth Cities as the TUGG nonprofit that will share in his prize. Big congrats to both…

• Not all public pensions are created equal: It’s been four days, and CalPERS still hasn’t given a reasonable explanation for why it can’t determine the amount of carried interest paid to its private equity managers.

Moreover, a reader points out that not all public pensions suffer from the same lack of calculators. His example was the Texas County & District Retirement System, which puts aggregate carried interest payments in its comprehensive annual financial report. Just check out page 55 of this document. So much for the CalPERS argument that this is a “private equity industry issue” rather than a CalPERS issue.

• Your turn: I’m planning a feedback column for tomorrow, which I’d like to include your thoughts on how the Greek (and perhaps Puerto Rico) situations will affect the VC/PE/M&A markets. So be sure to drop me emails.

• 51k and counting… Every time I add another thousand Twitter followers, I like to ask you to join the others so we can chat throughout the day. Follow me @danprimack


• Sysco (NYSE: SYY) has canceled its proposed $3.5 billion acquisition of US Foods from KKR and Clayton Dubilier & Rice, following regulatory opposition. Read more.


• OneFineStay, a London-based platform for renting luxury homes, has raised $40 million in Series D funding. has raised $12 million in Series B funding. Backers include Intel Capital, Hyatt Hotels, Quadrant Capital, Canaan Partners and Index Ventures.

• UrbanClap, a mobile-based services marketplace in India, has raised $10 million in Series A funding from return backers Accel Partners and SAIF Partners. Read more.

• Drippler, a Palo Alto, Calif.-based app recommendation and news app, has raised $4.5 million in Series A funding. Titanium Investments led the round, and was joined by such groups as TMT Investments and iAngels. Read more.

• Blue Mendora, a Grand Rapids, Mich.-based provider of cloud systems management solutions, has raised $4.6 million in Series A funding. Michigan eLabs led the round, and was joined by seed backers Start Garden and Grand Angels.


• ABRA Auto Body & Glass, a Federal Way, Wash.–based damaged vehicle repair company owned by Hellman & Friedman, has agreed to acquire 23 Kadel’s Auto Body locations in Idaho, Oregon and Washington. No financial terms were disclosed. Kadel’s is a portfolio company of KCB Private Equity.

• Automatic Data Processing (Nasdaq: ADP) has sold its procure-to-pay business to Oildex, a portfolio company of Accel-KKR, for an undisclosed amount.

• The Carlyle Group has agreed to invest $120 million for an undisclosed stake in Shanghai ANE Logistics Ltd., a Chinese provider of trucking and logistics services.

• The Carlyle Group has agreed to invest around $115 million for an 18.54% stake in JIC Leasing Co. Ltd., a Beijing-based financial leasing company owned by China Jianyin Investment Ltd.

• Marlin Equity Partners has acquired International Business Systems, a Sweden-based provider of enterprise resource planning and supply chain management software to the distribution industry. No financial terms were disclosed.

• Prospect Mortgage, a Sherman Oaks, Calif.-based mortgage lender owned by Sterling Partners, has agreed to acquire certain assets of CapWest Mortgage, a Kansas City-based call center-based operation owned by Farmers Bank & Trust. No financial terms were disclosed.

• Silver Lake has agreed to acquire Cast & Crew, a Burbank, Calif.-based movie and television crew staffing company, from ZelnickMedia for $700 million (including assumed debt). Moelis & Co. and Morgan Stanley ran the process.

• Vincom Retail, a Vietnamese shopping mall owner and operator, has raised around $100 million in equity from an investor consortium led by Warburg Pincus. Vincom is a subsidiary of listed Vietnamese real estate company Vingroup Joint Stock Co.

• Vista Equity Partners has agreed to acquire a majority stake in Mediaocean, an Atlanta-based provider procurement, operations and analytics software to the advertising industry, at an enterprise value of $720 million. Sellers will include New Enterprise Associates. Read more.


• American Farmland Co., a New York-based REIT with farmland in California, Florida and Illinois, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol AFCO, with Deutsche Bank Securities, Raymond James and FBR serving as lead underwriters.

• Amplify Snack Brands Inc., an Austin, Texas-based snack-maker whose brands include SkinnyPop, has filed for a $200 million IPO. It plans to trade on the NYSE under ticker symbol BETR, with Goldman Sachs, Jefferies and Credit Suisse serving as lead underwriters. The company reports $4.9 million of net income on $44 million in revenue for Q1 2015. Shareholders include TA Associates.

• Digicel, a Jamaica-based provider of telecom solutions in the Caribbean and South Pacific regions, has filed for a $200 million IPO. It plans to trade on the NYSE under ticker symbol DCEL, with J.P. Morgan, UBS and Citigroup serving as lead underwriters.

• Manulife Asset Management, the asset management group of Canadian insurer Manulife Financial Corp. (TSX: MFC), is prepping a Singapore IPO for its U.S. office property portfolio, according to the WSJ. The offering could raise upwards of $450 million. Read more.

• Multi Packaging Solutions International Ltd., a global manufacturer of packaging solutions for the consumer and healthcare markets, has filed for a $100 million IPO. The company plans to trade under ticker symbol MPSX, and did not list any underwriters. MPSI was formed in 2013 via the merger of Chesapeake Services (owned by The Carlyle Group) and Multi Packaging Solutions (owned by Madison Dearborn Partners).

• Samsung Bioepis, a South Korean generic drugmaker, said it is considering a listing on the Nasdaq. Read more.


• GTCR has agreed to sell Cord Blood Registry, a San Bruno, Calif.-based cord blood stem cell bank, to AMAG Pharmaceuticals Inc. (Nasdaq: AMAG) for $700 million.

• Nautic Partners has hired Robert W. Baird to find a buyer for Theorem Clinical Research Holdings LLC, a King of Prussia, Penn.-based contract research organization for the life sciences market, according to LBO Wire. A sale could value the company north of $200 million.

• Novartis AG has agreed to acquire Spinifex Pharmaceuticals Inc., a pain drug development company with offices in Australia and Connecticut. The deal includes a $200 million upfront payment, plus an undisclosed amount of potential earn-outs. Spinifex had raised over $60 million in VC funding from firms like Novo AS, GBS Venture Partners, Brandon Capital Partners, Uniseed and UniQuest.

• Paine & Partners has agreed to sell Icicle Holdings Inc. in a two-part transaction: Convergence Holdings Inc. will acquire Icicle’s land-based wild seafood processing and farmed salmon activities, and Dominion Catchers LLC will acquire the Company’s harvesting and processing vessels and the associated fishing rights. No financial terms were disclosed.


• General Electric (NYSE: GE) has agreed to sell its fleet management unit in the U.S., Australia, Mexico and New Zealand to Element Financial Corp. (TSX: EFN) for C$8.6 billion in cash. GE also has agreed to sell its European fleet businesses to a subsidiary of BNP Paribas. Read more.


•  The Carlyle Group has closed a $400 million middle-market collateralized loan obligation (CLO) vehicle focused on the U.S. market.


• Henrik Aslaksen is stepping down as head of global M&A at Deutsche Bank, according to the FT. No word yet on his future plans. Read more.

• Michael Bego has stepped down as a partner with private equity secondaries firm Willowridge, which he had first joined more than nine years ago. No word yet on his future plans, as his LinkedIn profile says he is currently on “garden leave.”

• Sean Gelb has joined Goldpoint Partners, a private equity affiliate of New York Life Investments, as chief financial officer. He previously was with The Blackstone Group.

• Megan Quinn is stepping down as an investment partner with Kleiner Perkins Caufield & Byers, which she originally joined in 2012 from Square. She is expected to move back to San Francisco from London, in order to work on a “stealth” project.

Share today’s Term Sheet: