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Term Sheet — Thursday, July 9

Random Ramblings

Some items to kick off your Thursday:

• Welcome to the unicorn herd: Genetic testing company 23andMe last week reported via a regulatory filing that it had raised $79 million of a new funding round that could eventually hit $150 million. Market research firm VC Experts subsequently pulled Delaware filings that show the round — Series E — was done at a post-money valuation of approximately $1.03 billion (based on the $79m, not the $150m).

That’s nearly a 2.7x valuation jump from the company’s Series D raise, which occurred in late 2012 (backers included Google Ventures, NEA, MPM Capital and Yuri Milner).

So how do we explain the valuation jump, particularly given that 23andme last year was dealt a severe blow when the FDA said it could no longer market its personal DNA testing kit to U.S. consumers. Four basic answers, in reverse orders of importancve: (1) 23andMe hopes the FDA will reverse that decision later this year. (2) The restriction caused 23andMe to focus more on international markets than it otherwise would have, which has paid dividends. (3) The FDA did recently allow 23andMe to market a carrier test. (4) 23andMe said in March that it will begin developing its own drugs by leveraging its massive customer database — an effort that will be led by ex-Genentech R&D boss Richard Scheller.

• Big PE tax change: The UK Treasury Department said yesterday that it will eliminate a tax loophole that allowed private equity investors to effectively pay taxes on their carried interest at rates below the 28% capital gains rate. In short, the British government will no longer allow cost-shifting when it comes to PE carried interest. For more, go here.

• Child care is expensive: Partners Group this morning announced an agreement to acquire the U.S. early-childhood education business of Knowledge Universe, including the KinderCare Learning Centers and the Children’s Creative Learning Centers. No financial terms were disclosed, but we’ve learned that the enterprise price is around $1.5 billion.

• A VC firm grows in Tel Aviv: Eitan Bek and Rona Segev each spent more than a decade as partners with Israeli VC firm Pitango Venture Capital, but now they’ve left to launch a new firm called TLV Partners. According to a regulatory filing, they’re seeking up to $100 million for their debut fund.

• Speaking of new VC funds: Center Electric, an early-stage VC firm focused on the Internet of Things market, is targeting $50 million for its debut fund with a $75 million cap, per an LP source. The group was formed last year by Jay Adelson (Digg, Equinix, etc.) and Andy Smith (Dolby Labs, Dragonfly Effect author).

• Supermarket sweep: I spent some time on the phone yesterday with Moody’s senior analyst Mickey Chadha, discussing the proposed Albertsons IPO. He expressed surprise that the filing had come so soon after the Safeway merger was completed, as it may be difficult for prospective investors to gauge how well the combination is working, although he says early financial results are promising. The key metric to look at in future filings, he says, is gross margin.

• Nutty offering: Back in March I wrote about a Silicon Valley startup called ARC, which had just raised a bunch of VC funding to support its development of an oral pharmaceutical that those with peanut allergies can ingest daily by putting it on their food. Now the company has renamed itself Aimmune Therapeutics, and filed for a $115 million IPO. You can read my original piece by going here.


 The Carlyle Group is in talks to acquire the Veritas data storage business from Symantec Corp. (Nasdaq: SYMC) for between $7 billion and $8 billion, according to Bloomberg. Symantec originally bought Veritas for $13.87 billion in 2005. Read more.


• DigitalOcean, a New York-based provider of cloud infrastructure for developers, has raised $83 million in Series B funding. Access Industries led the round, and was joined by Andreessen Horowitz.

• Afferent Pharmaceuticals, a San Mateo, Calif.-based developer of small molecule drugs for the treatment of neurogenic respiratory, urologic and pain disorders, has raised $55 million in Series C funding. Fidelity led the round, and was joined by Jennison Associates, New Leaf Ventures, Partner Fund Management, Redmile Group, Tekla Healthcare Investors and Tekla Life Science.

• Influitive, a Toronto-based advocate marketing startup, has raised $30.5 million in Series B funding. Georgian Partners led the round, and was joined by BDC Capital, DoCoMo Capital, OurCrowd, Hummer Winblad Venture Partners, Illuminate Ventures, Resolute Ventures, Relay Ventures, CommonAngels and First Round Capital. Read more.

• News in Shorts, an Indian mobile news app, has raised $20 million in Series B funding led by existing backer Tiger Global. Read more.

• Lendingkart, an India-based online platform for small business loans, has raised $10 million in Series A funding from Saama Capital, Mayfield and individual angels. Read more.

• 1001Pharmacies, a French online pharmacy marketplace, has raised $8.9 million in new VC funding. Backers include Newfund and CM-CIC Capital Prive. Read more.

• Genymobile, a French enterprise unification platform for Android, has raised €7 million in new VC funding from Alven Capital and Bpifrance. Read more.

• Apester, a New York-based digital storytelling platform for publishers, has raised $5 million in Series A funding led by Mangrove Capital Partners.

• Octopus, an Israeli developer of physical security information management systems, has raised $2.5 million from Singulariteam.

• GoFundMe, a crowdfunding site for personal causes, has raised an undisclosed amount of new VC funding. Stripes Group led the round, and was joined by Technology Crossover Ventures, Accel Partners, Greylock Partners, ICONiQ Capital and Meritech Capital Partners.


• CVC Capital Partners has entered into exclusive talks to acquire Polish utility PKP Energetyka from Polskie Koleje Panstwowe SA. Read more.

• Evans Analytical Group, a Sunnyvale, Calif.-based lab network owned by Odyssey Investment Partners, has acquired ABC Laboratories, a Columbia, Mo.-based contract research organization for the agrochemical and pharma markets. No financial terms were disclosed.

• General Atlantic and WPP PLC have teamed up on a bid for customer data analysis group Dunnhumby, according to Bloomberg. Dunnhumby currently is owned by Tesco Stores, which in January hired Goldman Sachs to find a buyer. The original asking price was £2 billion, but that’s since been cut nearly in half. Read more.

• Millstein & Co., a Washington, D.C.-based corporate and public financial advisory firm, has raised an undisclosed amount of minority equity funding from Stone Point Capital.

• Partners Group has agreed to acquire the U.S. early-childhood education business of Knowledge Universe, including the KinderCare Learning Centers and the Children’s Creative Learning Centers. No financial terms were disclosed.

• Quad-C Management has acquired WOLF, a York, Penn.-based distributor of cabinetry and other building products. No financial terms were disclosed.

• Telular Corp., a Chicago-based provider of remote monitoring and tracking services, has completed its previously-announced acquisitions of Reltima (Woburn, Mass.) and GPS North America (Langhorne, Penn.), two commercial telematics companies in the local fleet management market. No financial terms were disclosed. Telular is a portfolio company of Avista Capital

• Teneo Holdings, a portfolio company of BC Partners, has acquired a pair of London-based strategic communications firms: Blue Rubicon and StockWell. No financial terms were disclosed for either deal. Blue Rubicon shareholders had included LDC. Read more.


• Blue Buffalo Pet Products, a Wilton, Conn.-based maker of natural pet foods, has set its IPO terms to 29.52 million shares being offered at between $16 and $18 per share. It would have an initial market cap of around $3.3 billion, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol BUFF, with J.P. Morgan and Citigroup serving as co-lead underwriters. It reports $102 million of net income on $918 million in revenue for 2014. Shareholders include The Invus

• Global Blood Therapeutics Inc., a South San Francisco-based developer of drugs to treat serious blood-based disorders, has filed for a $115 million IPO. It plans to trade on the Nasdaq under ticker symbol GBT, with Morgan Stanley and Goldman Sachs serving as lead underwriters. Shareholders in the pre-revenue company include Third Rock Ventures (63% pre-IPO stake) and Fidelity (13.2%).


• No exit news this morning.


• Charles River Laboratories (NYSE: CRL) has agreed to acquire Celsis, a Chicago-based provider of non-sterile bioburden detection systems, for $212 million in cash.

• GVC Holding (AIM: GVC) has offered to acquire online gaming rival Bwin.Party (LSE: BPTY) for approximately $1.4 billion. Read more.

• Uber has dropped out of the bidding war for Nokia’s digital mapping business, according to Reuters. German automakers BMW, Daimler and Audi all remain in talks, per the report. Read more.

• The Weir Group (LSE: WEIR) has acquired Delta Industrial Valves Inc., a Niles, Mich.-based maker of severe service knife gate valves for the oil sands, mining and industrial markets. No financial terms were disclosed. Quarton Partners managed the process.

• Zealot Networks, a Los Angeles-based digital media company for multi-platform revenue and distribution services, has acquired social content site ViralNova. No financial terms were disclosed, but Fortune reports that the sale price was around $100 million. Read more.


• Ridgemont Equity Partners, a Charlotte-based middle-market private equity firm, has secured $750 million for its second fund, according to a regulatory filing. It is seeking to raise upwards of $900 million, compared to the $735 million it close for its debut fund in 2011.

• Quantum Energy Partners, a private equity firm focused on the energy industry, has closed its sixth fund with $4.45 billion in capital commitments. Park Hill Group served as placement agent.


• Michael Casey has agreed to join the MIT Media Lab‘s Digital Currency Initiative, effective Sept. 1. He previously has been a senior Wall Street Journal columnist, and recent co-author of a book on cryptocurrency.

• Kainos Capital, a private equity firm focused on the food and agribusiness sectors, has promoted Daniel Hopkin and Nirav Shah from principals to partners.

• Nasdaq has named Eklavya Saraf as managing director of new listings and capital markets. He has been with Nasdaq in various roles since 2009, most recently as part of its business development group.

• Brian Stengel has joined Perella Weinberg Partners as a partner in the firm’s advisory business. He previously was with Waller Capital Partners as a managing director and head of the digital media group.

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