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Term Sheet — Monday, August 10

Random Ramblings

Ifty Ahmed, the Connecticut venture capitalist accused of insider trading and defrauding his former firm, spent all of June and much of July in an India prison, according to new court documents.

Ahmed had been a general partner with Oak Investment Partners until this past April, when he was arrested for insider trading that was unrelated to his work with Oak. The firm then launched a review of Ahmed’s venture capital work, and uncovered information that led to subsequent charges of fraud and self-dealing.

Facing both criminal and civil complaints, Ahmed in May appeared to have fled the country, leaving behind his wife and three minor children. His original attorneys would later drop Ahmed as a client, saying that Ahmed had “ceased all communication” with them. The SEC, in its court filings, did not seem to know exactly where he was.

But documents filed by Ahmed’s new attorneys at Brown Rudnick say that the former VC was arrested and detained by India’s immigration service on May 22 and held in prison until being released on bond on July 23. Moreover, Ahmed’s Indian passport was confiscated by local authorities and he is unable to leave India without permission of the Indian court. Details of his alleged offense in India are not disclosed.

Two days after being released, Ahmed reached out to Brown Rudnick for representation in the U.S. cases. He likely would need to return to the U.S. to be tried on the criminal charges, but possibly could remain in India while the civil charges are adjudicated. Ahmed’s wife is being represented by separate attorneys.

The filings in which this information was disclosed pertain to Ahmed having some of his $100 million-plus in assets unfrozen, in order to pay legal bills. A judge has not yet ruled on the motion.

It also may be worth noting that a partial transcript of a deposition with Ahmed’s wife shows that Ifty was diagnosed with cancer in early 2013, for which he had surgery that involved a difficult recovery. This was raised in explaining why Ahmed had transferred ownership of certain assets over to his wife, and possibly could serve as motive for his alleged transgressions.

Ahmed’s new attorney declined to comment.

• Moving on: Charles Huang has quietly stepped down as VP of healthcare portfolio operations at The Blackstone Group, in order to launch a new startup called Lynchpin Technologies, which will provide CRM and ad-tech solutions to healthcare insurers.

• Mexico math: Donald Trump is getting far more attention right now for his personal insults than his policy prescriptions, in part because he has provided so little of that latter. One thing he’s said repeatedly, however, is that Mexico is “killing us on trade.” And a few of you emailed me about it, after I wrote that last week’s GOP debate included virtually no economic or business talk.

So I took a quick look at the official numbers, and his claim doesn’t really hold up.

Yes, it is true that America’s trade imbalance with Mexico is high right now in terms of dollars. But the percentage imbalance is actually lower than it was 30 years ago (during the “great” years to which Trump wants to return). Specifically, the U.S. Census Bureau reports that the U.S. imported $53.8 billion more of goods from Mexico in 2014 than it exported. That $53.8 billion represents 22.4% of all U.S. exports to Mexico last year. For the first six months of 2015, the figure is 23.7%. Back in 1985, the trade deficit was only $5.5 billion — but that represented 40.3% of all U.S. exports to Mexico.


• Berkshire Hathaway this morning announced that it has agreed to acquire Precision Castparts (NYSE: PCP), a Portland, Ore.-based maker of aircraft components, for around $37.2 billion in cash. The $235 per share deal represents a 21.2% premium over Friday’s closing price for Precision Castparts stock. Berkshire Hathaway already owns around 3% of Precision Castparts stock.

It is the second-largest acquisition ever by Berkshire Hathaway, following its purchase of BNSF Railway in 2010. That deal was for $36 billion (including $10 billion of assumed debt), at an enterprise value of $44 billion (Buffett already held a sizable piece of the company). Its most recent mega-deal was the $36 billion purchase of Kraft Foods by Heinz, which is backed by both Berkshire and private equity firm 3G Capital. Read more.


• Editas Medicine, a Cambridge, Mass.-based genome editing company, has raised $120 million in Series B funding. Boris Nikolic led the round, on behalf of a U.S. investment company formed by several family offices to invest exclusively in Editas Medicine. Other backers include Deerfield Management, Viking Global Investors, Fidelity Management & Research Co., T. Rowe Price, Google Ventures, Jennison Associates, Khosla Ventures, EcoR1 Capital, Casdin Capital, Omega Funds, Cowen Private Investments and Alexandria Venture Investments. Return participants included Flagship Ventures, Polaris Partners and Third Rock Ventures.

• Ezetap Mobile Solutions, an India-based maker of Square-like credit card processing devices for merchants in emerging markets, has raised around $23 million in VC funding. Horizons Ventures and Capricorn Investment Group were joined by return backers Social+Capital Partnership, Helion Advisors and Berggruen Holdings. Read more.

• Crescerance, an Atlanta-based developer of a learning platform for building mobile apps, has raised an undisclosed amount of Series A funding from BIP Capital.

• Sentien Biotechnologies Inc., a Medford, Mass.-based regenerative medicine company focused on acute organ failure, has raised an undisclosed amount of Series A funding from Boehringer Ingelheim Venture Fund USA and Portage Biotech Inc.

• Zirtual, an online service that matches professionals with virtual executive assistants, has suspended operations due to “”a combination of market circumstances and financial constraints.” It had raised more than $5 million in VC funding from backers like VegasTechFund, Mayfield Fund, TenOneTen Ventures, Jason Calacanis and Carmelo Anthony.


• The Abraaj Group has acquired an undisclosed stake in Yu-Ce Medical, a Turkish maker of disposable medical supplies.

• H.I.G. Capital has acquired Centros Único, a Spain-based provider of permanent hair removal and medical aesthetic services. No financial terms were disclosed.

• Permira has agreed to acquire Lowell Group, a UK-based provider of credit management services, from TDR Capital. No financial terms were disclosed, but a Sunday Times report suggested the deal could be worth around £1.1 billion.

• Sycamore Partners is nearing a deal to acquire Dutch lingerie brand Hunkemoller from PAI Partners, according to Bloomberg. A deal could be worth around $480 million. Read more.

• Wynnchurch Capital has acquired Latham International, a Latham, N.Y.-based maker of packaged and fiberglass pools and automated safety covers, from Littlejohn & Co. No financial terms were disclosed.


• Five companies are expected to price IPOs on U.S. exchanges this week: Global Blood Therapeutics, Houlihan Lokey, GC Aesthetics, Boxlight and Conifer Holdings. Read more.

• CPI Card Group Inc., a Littleton, Colo.-based maker of plastic credit and debit cards, has filed for a $100 million IPO. It plans to trade on the Nasdaq, with BMO Capital Markets, Goldman Sachs and CIBC serving as lead underwriters. The company reports $13.3 million of net income on $261 million in revenue for 2014, and is owned by Tricor Pacific Capital Partners.

• Gores Holdings, a Beverley Hills, Calif.-based private equity firm, has downsized its proposed IPO from $400 million to $350 million.

• Mauser Group, a Dutch maker of rigid packaging products and services for industrial use, has filed for a $100 million IPO. BofA Merrill Lynch and Citigroup are serving as lead underwriters. The company is owned by Clayton Dubilier & Rice, and reported €524 million in revenue for the final eight months of 2014.


• Goode Partners has sold its control stake in La Colombe Torrefaction, a Philadelphia-based coffee shop chain and packaged coffee retailer, to Hamdi Ulukaya for an undisclosed amount.

• The Gores Group has agreed to sell Therakos Inc., a West Chaster, Penn.-based immunotherapy company, to Mallinckrodt PLC (NYSE: MNL) for around $1.325 billion.

• H.I.G. Capital and KarpReilly have called off their auction for Atlanta-based restaurant chain Hooters of America, according to peHUB. Piper Jaffray had been managing the process, which now will be replaced by a dividend recap. Read more.

• MBK Partners has hired Goldman Sachs to find a buyer for its 31% stake in Coway Co., a South Korean maker of air purifiers, according to Dow Jones. The deal could be worth more than $2 billion. Read more.


• Alibaba Group (NYSE: BABA) has agreed to invest around $4.63 billion for a 19.9% stake in Chinese brick-and-mortar electronics retailer Suning. Read more.

• Pearson PLC (LSE: PSON) is preparing to sell off its 50% stake in The Economist for around £400 million, according to the FT. Buyers are expected to be the De Rothschild and Agnelli families. Read more.

• Sumitomo Life Insurance has held talks to acquire Symetra Financial (NYSE: SYA), a Bellevue, Wash.-based company currently valued north of $3.1 billion, although no deal has been reached, according to the WSJ. Read more.


• Apis Partners, a London-based private equity firm focused on financial services companies in Africa and South Asia, has held a $157 million first close on its inaugural growth equity fund.

• Deutsche Bank has agreed to sell its India asset management business to Prudential Investment Management for an undisclosed amount. The unit, called Deutsche Asset Management (India) Pvt. Ltd., was formed in 2003 and has around $3.2 billion in assets under management.

• Genstar Capital, a New York-based middle-market private equity firm, has closed its seventh fund with $2 billion in capital commitments.

• Hermes GPE, a private equity unit of Hermes Investment Management, has received a £1 billion mandate from the BT Pension Scheme. It is to be invested over three years, and split evenly between global fund and co-investments.


• Brittany Smith has joined VisaNow, a Chicago-based provider of online immigration services, as chief financial officer. She previously was a director with Madison Dearborn Partners.

• Hammond, Kennedy, Whitney & Co. said that president Ted Kramer will assume the additional role of CEO. The Indianapolis-based private equity firm also announced that Glenn Scolnik and Jeff Wood have been promoted to managing partners.

• The New York State Teachers’ Retirement System has named Gerald Yahoudy as managing director of its private equity program. He had been with the pension system since 2003.

• Dave Schulte has joined McKesson Ventures, the VC arm of McKesson Corp. (NYSE: MCK), as a managing director. He previously was with Kaiser Permanente Ventures.

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