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Term Sheet — Tuesday, August 25

August 25, 2015, 1:44 PM UTC

Random Ramblings

A bunch of notes to kick off your Tuesday:

 A hat of a deal: Fanatics Inc., an e-commerce company focused on sports merchandise, has sold a minority ownership stake to private equity firm Silver Lake for $300 million, Fortune has learned.

Jacksonville, Fla.-based Fanatics -- which originally began as a brick-and-mortar retailer for Jacksonville Jaguars apparel -- has been majority-owned by Kynetic LLC, an eBay spinoff that also includes membership-based e-commerce companies Rue La La and ShopRunner. The company also raised $320 million in minority equity funding from Andreessen Horowitz and Insight Venture Partners in 2012, and another $130 million last year from Alibaba Group.

The Silver Lake investment is all for primary shares, meaning that existing Fanatics investors will hold onto their stock. It is not clear how large Silver Lake's minority position would be, or if Kynetic would remain majority shareholder.

No comment from Silver Lake or Kynetic reps.

 Courthouse: A group of Kentucky public schoolteachers has filed a federal class action lawsuit against the board of their pension system, the Kentucky Teachers' Retirement System (KTRS), claiming mismanagement that has led to underfunding and, in turn, pay cuts. Also named as defendants are several private equity firms with which KTRS has invested, including The Blackstone Group, The Carlyle Group, KKR and Rockwood Capital.

The basic gripe related to private equity is twofold: (1) A seriously-underfunded pension system shouldn't be increasing its exposure to illiquid investments; and (2) The investments violate various Kentucky statutes, in terms of the lack of public disclosure (or even disclosure to KTRS Trustees) of fund terms and a failure to confirm compliance with a mandated code of ethics. Not entirely clear to me yet why the firms themselves are defendants, but I'm hoping to get more clarity later this morning.

 From the trail: Yesterday we mentioned how Donald Trump had seemingly come out in favor of changing the tax treatment of carried interest, during a Sunday morning television interview on CBS. But his comments were explicitly about hedge fund managers, and I noticed that Trump's financial disclosure forms list some real estate limited partnerships (which presumably include carried interest structures) among his holdings.

So I asked Trump campaign spokeswoman Hope Hicks if the candidate's position on changing carried interest tax treatment from capital gains to ordinary income is only for hedge fund managers or for all beneficiaries (private equity fund managers, real estate fund managers, etc.). Her reply? "No comment at this time."


 Coursera, a Mountain View, Calif.-based online education platform, has raised $49.5 million in a first close of the company’s Series C funding round (total target of $60m).

New Enterprise Associates led the round, and was joined by fellow return backers Kleiner Perkins Caufield & Byers, International Finance Corp., GSV Asset Management and Learn Capital. New investor Times Internet also participated. Read more.


 Syndax Pharmaceuticals Inc., a Waltham, Mass.-based developer of entinostat as a combination therapy in multiple cancer indications, has raised $80 million in Series C funding. Fidelity and Delos Capital Fund co-led the round, and were joined by EcoR1 Capital, OrbiMed, Jennison Associates, Tavistock Life Sciences, Arrowpoint Partners, Cormorant Asset Management, BioMed Ventures and return backers Domain Associates, MPM Capital, RusnanoMedInvest and Forward Ventures. Several unidentified mutual funds also participated.

 AMCS, an Ireland-based provider of software for the global waste management industry, has raised $50 million in VC funding. Insight Venture Partners led the round, and was joined by the Ireland Strategic Investment Fund.

 Scality, a San Francisco-based provider of storage software infrastructure solutions, has raised $45 million in Series D funding. BroadBand Tower Inc. was joined by return backers Menlo Ventures, Idinvest Partners, CAPE and Galileo.

 EHang, a Chinese drone manufacturer, has raised $42 million in Series B funding. GP Capital led the round, and was joined by GGV Capital, ZhenFund, Lebox Capital, OFC and PreAngel.

 Greenhouse Software, a New York-based recruiting optimization platform, has raised $35 million in Series C funding. Thrive Capital led the round, and was joined by Groupe Arnault and return backers Benchmark and The Social+Capital Partnership.

 BlueData, a Mountain View, Calif.-based infrastructure software platform for big data, has raised $20 million in Series C funding. Intel Capital led the round, and was joined by an unidentified “strategic investor” and return backers Amplify Partners, Atlantic Bridge and Ignition Partners.

 Zephyr Health, a San Francisco-based big data analytics platform for companies in the life sciences industry, has raised $17.5 million in Series C funding. Google Ventures led the round, and was joined by return backers Kleiner Perkins Caufield & Byers and Icon Ventures.

 FluGen Inc., a Madison, Wis.-based developer of a "universal" influenza vaccine, has raised $12 million in Series A funding. Backers include Venture Investors LLC, the Wisconsin Alumni Research Foundation, the State of Wisconsin Investment Board and Knox LLC.

 Cargo Chief Inc., a Mountain View, Calif.-based provider of freight brokerage services to shippers, has raised around $10 million in new equity funding, according to a regulatory filing.

 Spare5, a Seattle-based platform for businesses seeking individuals to complete “micro-tasks,” has raised $10 million in Series A funding from Foundry Group, Madrona Venture Group and New Enterprise Associates.

 DynoSense, a Sunnyvale, Calif.-based developer of a health scanner, has raised $9.4 million in Series A funding. Investors included WI Harper Group, JKOM Cloud Health Technology, Plug and Play Tech Center, Jinmao Capital and Wilson, Sonsini, Goodrich and Rosati., a free online personal styling service for men and women, has raised $8 million in Series A funding led by Balderton Capital.

 Nok Nok Labs, a Palo Alto, Calif.-based provider of authentication solutions, has raised $8 million in additional Series C funding. The round total is now $16.25 million. DaouKiwoom Group, Docomo Capital and Thundersoft were joined by return backers DCM Ventures, Lenovo Group, ONSET Ventures and Raven Ventures.

 EazyDiner, a restaurant reservation service in India, has raised $3 million in Series A funding from Saama Capital and DSG Consumer Partners.


 The Carlyle Group has acquired a 40% stake in Condor Travel, a Peruvian tour operator, from Abraaj Group for an undisclosed amount.

 Evolution Midstream LLC, a Denver-based provider of midstream services to oil and gas producers in North America, has been formed via a $300 million equity commitment from EnCap Flatrock Midstream.

 GoodWest Industries, a Warminster, Penn.-based maker of shelf-stable dairy products and related dispensing equipment, has raised an undisclosed amount of private equity funding from Palladium Equity Partners.

 Hallcon Corp., a Toronto-based provider of outsourced services to the North American railway and transit sectors, has acquired Loop Transportation, a San Francisco-based provider of commuter bus services for employers. No financial terms were disclosed. Hallicon backers include BMO Capital Partners and Novacap.

 Hearthside Food Solutions, a Downers Grove, Ill.-based portfolio company of Vestar Capital and Goldman Sachs, has acquired two companies: VSI, a European producer of nutrition, diet, and functional bars; and a nutritional supplement bar production facility in Boise, Idaho from a subsidiary of Post Holdings Inc. (NYDSE: POST). No financial terms were disclosed for either deal.

 Levine Leichtman Capital Partners has acquired Regional Rail LLC, a Kennett Square, Penn.-based operator of short line railroads and rail-related businesses in the U.S. No financial terms were disclosed.

 Marlin Equity Partners has acquired Syrus, a Columbus, Ohio-based provider of back office and analytical reporting software and services for the restaurant industry. No financial terms were disclosed. Sellers include Maxam Capital.

 Nexif Energy, a Singapore-based conventional and renewable power generation company for Southeast Asia, has been formed via a $200 million commitment from private equity firm Denham Capital.

 Nine West Holdings Inc., a White Plains, N.Y.-based women’s apparel and footwear maker owned by Sycamore Partners, has acquired substantially all of the business operations of Sherson Group Inc., which previously held the exclusive rights to the Nine West, Anne Klein and Easy Spirit brands in Canada. No financial terms were disclosed for the deal, which included 45 store leases.

 NRD Partners has completed its previously-announced acquisition of Frisch's Restaurants Inc. (AMEX: FRS), a Cincinnati-based operator of family-style restaurants, for approximately $174.5 million, or $34 per share.

 Rowmark LLC, a Findlay, Ohio-based portfolio company of Bertram Capital, has acquired LaserBits Inc., a Phoenix-based supplier and reseller of laserable products sold into the awards and engraving market. No financial terms were disclosed.

 Tricast, a Milwaukee-based pharmacy data analytics company has raised an undisclosed amount of growth equity funding from Brook Venture Partners and Blue Heron Capital.


 Allegiance Bancshares Inc., a Houston, Texas-based commercial bank for small and mid-sized businesses, has filed for a $60 million IPO. It plans to trade on the Nasdaq under ticker symbol ABTX, with Baird and Stephens Inc. serving as lead underwriters.

 Mirna Therapeutics Inc., an Austin, Texas-based developer of microRNA therapeutics for oncology, has filed for an $80.5 million IPO. It plans to trade on the Nasdaq under ticker symbol MIRN, with Citigroup and Leerink Partners serving as co-lead underwriters. The pre-revenue company has raised around $83 million in VC funding, from firms like Sofinnova Ventures (17.83% pre-IPO stake), New Enterprise Associates (17.83%), Pfizer Ventures (15.01%), Eastern Capital (6.39%), Osage University Partners and Correlation Ventures.

 RainDance Technologies Inc., a Billerica, Mass.-based developer of microdroplet-based solutions for single molecule and single cell analysis, has withdrawn registration for a $60 million IPO, citing “market conditions.” It had originally filed back in March, with BofA Merrill Lynch listed as left-lead underwriter. The company reported a $2.7 million net loss in 2014 on $30.5 million in revenue, compared to a $3.3 million net loss on $17 million in revenue for the year-earlier period. Shareholders include Mohr Davidow Ventures (34.4% stake), Quaker BioVentures (18.5), Alloy Ventures (13.3%), Acadia Woods Partners (8%), Northgate Capital (6.1%), GE Ventures, Myriad Genetics and Sectoral Asset Management.


 Great Point Partners has agreed to sell Cytovance Biologics Inc., an Oklahoma City-based biopharma contract development manufacturing company, to Hepalink USA Inc., a unit of Shenzen Hepalink Pharmaceutical Co. (SZSE: 002399). The deal is valued at $205.68 million in cash.

 Inovalon (Nasdaq: INOV) has agreed to acquire Avalere Health Inc., a Washington, D.C.-based provider of advisory services and business intelligence solutions to the pharmaceutical and life sciences industry. Sellers include ABS Capital Partners. The deal is valued at $140 million ($135m in cash, $5m in restricted stock), while Avalere reported $47.1 million in revenue for calendar 2014. A final close on the acquisition is expected to occur within the next week.

 PAI Partners has hired HSBC to explore a sale of Swedish chemical company Perstorp Holding AB after receiving buyside interest, according to Bloomberg. The company could be valued at upwards of€ 2 billion. Reuters had previously reported that PAI was considering a public float for Perstorp.

 Xerox (NYSE: XRX) has agreed to acquire RSA Medical, a Naperville, Ill.-based provider of outsourced risk management services to health and life insurers, from private equity firm Beecken Petty O’Keefe & Co. No financial terms were disclosed.

 Zipcar, a unit of Avis Budget Group (Nasdaq: CAR), has acquired Local Motion, a Burlingame, Calif.-based provider of enterprise fleet management solutions. No financial terms were disclosed. Local Motion had raised $6 million in funding led by Andreessen Horowitz.


 Houzz, a Palo Alto, Calif.-based digital platform for home remodeling and design, has acquired GardenWeb, a website for home design professionals and homeowners. No financial terms were disclosed. Houzz has raised over $210 million in VC funding from backers like Sequoia Capital, Oren Zeev, New Enterprise Associates, GGV Capital, Kleiner Perkins Caufield & Byers, DST Global and T. Rowe Price.

 Monsanto (NYSE: MON) has increased its previously-rejected takeover offer for Swiss agribusiness Syngenta AG (Swiss: SYN) from around $45 billion to $47 billion, according to Bloomberg. Read more.

 Southern Company (NYSE: SO) has agreed to acquire rival Atlanta utility AGL Resources (NYSE: GAS) for around $12 billion (including $4b in assumed debt). Read more.


Bulldog Innovation Group, a seed-stage VC fund founded by Yale alumni to support alumni entrepreneurs from Yale and the School of Management, is raising $25 million for its debut fund, according to a regulatory filing.

 Hatteras Venture Partners, a Durham, N.C.-based venture capital firm, is raising upwards of $150 million for its fifth fund, according to a regulatory filing. It already has closed on more than $91 million.



 Yujin Chung has stepped down as a partner with Andreessen Horowitz, which he had joined in 2010 to focus on business development. According to his LinkedIn profile, his next role is as a managing director and head of platform at a “stealth” group in Silicon Valley.

 David Fiszel is stepping down as head of a Honeycomb Ventures, a recently-formed VC unit at Steven Cohen’s Point72 Asset Management, in order to launch his own firm that will invest in public and closely-held tech companies, according to Bloomberg. His Honeycomb Ventures colleagues also will join the new firm. Read more.

 Maritza Liaw has left Kleiner Perkins Caufield & Byers, which she had joined in 2010 to focus on green growth investments. No word yet on her future plans.

 James Perry has joined the $3.1 billion Dallas Police & Fire Pension System as chief investment officer, a newly-created position. He currently serves as assistant CIO and assistant chancellor for the $1.1 billion Texas Tech University System.

 Christopher Sorrells has joined GSE Systems Inc. (NYSE: GVP) as interim chief operating officer. He previously was with NGP Energy Technology Partners as an operating partner and, before that, as a managing director.

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