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Term Sheet — Tuesday, August 11

Random Ramblings

Today’s big deal is that The Carlyle Group has agreed to purchase data storage and server management business Veritas from Symantec Corp. for $8 billion. Some quick notes:

1. GIC, a Singapore sovereign wealth fund that is an LP in Carlyle funds, is co-investing on the deal. Carlyle also expects to add other co-investors prior to deal close, which should occur before year-end.

2. Symantec originally paid $13.5 billion to buy Veritas back in 2005, but the combo never seemed to really work. Veritas became quasi-orphaned inside of the security giant, continuing to generate cash-flow but watching its revenue growth slow. Part of Carlyle’s brand revitalization plan will be to refocus on core products and either bring some of the more peripheral products together or dump them entirely.

3. Symantec put Veritas up for sale earlier this year and there have been media reports for more than a month that Carlyle was in pole position. I’m told the delay was basically due more to carve-out complications than price, despite Carlyle’s long carve-out history.

4. Some of those reports suggested that Carlyle would need to slash headcount in order to produce returns, but the firm denies that is part of its strategy. “We have no plans for any layoffs,” Carlyle managing director Patrick McCarter told me this morning. “This is really a growth story.”

5. No word on the equity-to-debt ratio.

6. Where this deal ranks among 2015 PE deals really depends on what you choose to include or exclude. I’d say it’s the third-largest deal, following 3G Capital-backed Heinz buying Kraft Foods, and firms like China Renaissance Partners, CITIC and Sequoia Capital backing Hongyi Zhou’s take-private buyout of Qihoo 360. Or fourth, if you want to include Blackstone’s deal for most of GE Capital’s real estate business. And that’s only announced deals, as larger transactions like Petsmart and Safway were agreed-upon last year, but technically closed in 2015. No matter what, it’s large.

• Alpha-bits: Yesterday’s big tech news was that Google is reorganizing its corporate structure, with Google Inc. to become the largest subsidiary of a new company (called Alphabet Inc.) that also will house less core businesses like Calico and Google X.

Also under the Alphabet umbrella will be investment units Google Ventures and Google Capital, but so far it’s been (uncharacteristic) radio silence on how the reorg will affect these groups. Yesterday’s letter from Larry Page said that he is “also stoked about growing our investment arms,” but no specifics were provided. Worth noting that Google Ventures patron David Drummond will move over to Alphabet as chief legal officer, which is a positive for the group.

• Unicorns rejoice: Insight Venture Partners today announced that it has raised $4.75 billion for its ninth fund — split between a $3.29 billion general fund and a $1.46 billion co-investment fund for control transactions. The only minor strategic change this time around is that the prior co-investment fund did both control and minority equity deals. General strategy remains to focus on Internet and software companies. Also worth noting that Insight has actually been investing the fund since January, according to Insight managing director Deven Parekh.

As a total aside, Parekh is a big Democratic Party backer — so I was curious how he’s squaring his fundraising efforts with Hillary Clinton’s animus toward certain aspects of the VC-backed gig economy. But then I noticed that Insight doesn’t back a single on-demand/gig economy company. Parekh said it wasn’t intentional strategy — “we look at them” — that rather than they haven’t found the right one at the right price.

• Speaking of unicorns: Jet, the new online e-commerce company led by co-founder Marc Lore, is in market for a new round that would value the company at between $2 billion and $3 billion. Word is that Jet, which only left private beta last month, so far has around a $100 million revenue run rate with around one-third of its orders coming from repeat buyers. Don’t expect the deal to be signed until early fall, with Jet not having yet decided whether to accept an outside lead or sign up one of its many well-heeled insiders. No comment from the company, natch.



• The Carlyle Group has agreed to acquire Mountain View, Calif.-based data storage business Veritas from Symantec Corp. (Nasdaq: SYMC) for $8 billion. Read more.


• Tuhu, a Chinese auto parts and maintenance app, has raised around $100 million in new VC funding. Joy Capital led the round, and was joined by Welkin Capital, Far East Horizon Ltd. and return backers Legend Capital and Qiming Venture Partners. Read more.

• GreyOrange, an India-based developer of robotics systems for automation at distribution and fulfillment centers, has raised $30 million in new VC funding led by Tiger Global.

• Spoken Communications, a Seattle-based provider of a cloud-based contact center as-a-service platform, has raised $28.8 million in Series D funding. Riverwood Capital led the round, and was joined by Ignition Partners.

• CENX, an Ottawa-based provider of lifecycle service orchestration solutions for software-defined and virtualized networks, has raised US$12.5 million in Series D funding. BDC Capital, Mistral Venture Partners and VMware were joined by return backers Highland Capital Partners, Mesirow Financial Private Equity, Verizon Ventures, Ericsson, DCM Ventures and Cross Creek Advisors.

• PHEMI, a Vancouver-based big data warehouse company, has raised C$12.2 million in new VC funding. CTI Life Sciences Fund and British Columbia Discovery Fund co-led the round, and were joined by return backers BDC Capital Healthcare Venture Fund and Yaletown Venture Partners.

• Livspace, an India-based online retailer of interior design and home furnishing products, has raised $8 million in new VC funding from return backers Bessemer Venture Partners, Helion Venture Partners and Jungle Ventures.

• Unify Square, a Bellevue, Wash.-based service provider for Microsoft products, raised $4 million in new Series B funding from firms like Microsoft, Bridge Bank and Stanford University. This is an extension to a Series B round that announced an $8.2 million first close back in February.

• pCloud, a Swiss provider of cloud storage solutions, has raised $3 million in its first round of VC funding from undisclosed investors.

• StyleLounge, a German metasearch engine for clothing and lifestyle products, has raised €2.3 million in Series A funding. Backers include TA Ventures, Axivate Capital, Astutia Ventures and Felix Jahn. Read more.

• GeneriCo LLC, a St. Louis-based developer of niche generic drugs with embedded drug delivery technology, has raised $1.5 million in Series A funding (round remains open with $2m target). Kinsale Capital Partners led the first close, and was joined by BioGenerator and Missouri Technology Corp.


• Just Retirement Group (LSE: JRG), a UK-based provider of financial services in the retirement income market has agreed to acquire rival Partnership Assurance (LSE: PA) for £669 million in an all-stock deal. Following the transaction, JRG stockholders would own 60% of the combined company. JRG shareholders include Permira, while Partnership Assurance shareholders include Cinven. Read more.

• Palamon Capital Partners and Corsair Capital have agreed to acquire Currencies Direct, a London-based provider of foreign exchange and international payment solutions to private and corporate clients, for more than £200 million.

• The Riverside Company has acquired a minority stake in North American Dental Group, a dental services provider with 70 clinics in Indiana, Michigan, Ohio and Pennsylvania. NADG remains majority-owned by ABRY Partners.

• Salient Federal Solutions Inc. (Fairfax, VA) and CRGT Inc. (Reston, VA) have agreed to merge into a single company that provides IT modernization and business intelligence solutions to federal agencies and other government customers. No financial terms were disclosed, but a source familiar with the situation says that it was an all-stock transaction in which Salient backer Frontenac Co. and CRGT backer Bridge Growth Partners each will own a 50% stake in the combined company.


No IPO news this morning…


• Envestnet Inc. (NYSE: ENV) has agreed to acquire Yodlee Inc. (Nasdaq: YDLE), a Redwood City, Calif.-based cloud platform for digital financial services. The $18.88 per share cash and stock deal is valued at approximately $660 million on a fully-diluted equity value basis, and gives Yodlee and enterprise value of around $590 million. Yodlee went public last fall at $12 per share and closed trading yesterday at $12.60 per share. Current stockholders include Warburg Pincus (27.5% stake) and Accel Partners (6.85%). Read more.

• Johnson Electric Holdings Ltd. (HK: 179) has agreed to acquire Stackpole International, a Canadian maker of electric motors and motion subsystems, from Crestview Partners and CITIC Capital Partners. No financial terms were disclosed. UBS and Morgan Stanley managed the sell-side process.

• Tailwind Capital has sold Re Transportation Inc., a Memphis, Tenn.-based non-asset provider of third-party logistics services, to the U.S. affiliate of Kuehne + Nagel International AG (Swiss: KNIN). No financial terms were disclosed.


• Terex Corp. (NYSE: TEX), a Westport, Conn.-based maker of cranes and other heavy construction and manufacturing equipment, has agreed to merge with Finland-listed Konecranes in an all-stock deal that would see Terex stockholders owning 60% of the combined company. Terex closed trading yesterday with a market cap of around $2.29 billion. Read more.


• Insight Venture Partners has closed its ninth fund with $3.29 billion in capital commitments, plus a $1.46 billion co-investment fund that will support control transactions. The New York-based firm had raised $2.57 billion for its eighth fund in 2013, and last year tacked on a $510 million co-investment side fund.


• Betsy Booth has joined Twin Brook Capital Partners as vice president of underwriting. She previously was with Madison Capital Funding.

• Scott Braunstein has joined healthcare-focused venture capital firm Aisling Capital as an operating partner. He currently serves as senior VP of strategy and corporate development with Pacira Pharmaceuticals, and previously spent 12 years as a healthcare analyst and portfolio manager with J.P. Morgan Asset Management.

• Manish Kothari has been named president of SRI Ventures and vice president of SRI International. He previously was a director of commercial ventures and licensing in SRI Ventures. Former SRI Ventures president Norm Winarsky is now serving as san advisor to the group.

• John LeRosen has joined Los Angeles-based private equity firm Vance Street Capital as a vice president. He previously was CFO of medical device maker Avalon Laboratories (acquired by Nordson last year).

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