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Term Sheet — Friday, August 28

Random Ramblings

Some quick notes as we move into the weekend…

• Pineapple express: Appraisal lawsuits have become increasingly common after leveraged buyouts, and yesterday’s move by the Delaware Court of Chancery is likely to only embolden such litigants (some of which are legitimately angry shareholders, some of which are hedge fund managers that buy just before a buyout closes in order to role the dice on these very suits).

The Court ruled that David Murdock and C. Michael Carter must reimburse former Dole Food Company shareholders a whopping $148 million, after finding that they artificially decreased the price of Dole stock, thus helping them get an inappropriate bargain when taking the company private in 2013. For example, Carter was Dole’s chief operating officer at the time, and took stock-deflating actions like canceling a previously-announced stock buyback program. He also provided the independent committee — led by Lazard, which was not cited for wrongdoing — with “knowingly false” financial projections that were intended to “mislead the board for Mr. Murdock’s benefit.”

Murdock ultimately bought Dole for $13.50 per share, but the Court says that a more legitimate value would have been at least $16.24 per share. Deutsche Bank — which had advised Murdock and, for a while, also advised Dole — was not found liable, but did take some verbal brickbats from the bench.

• Speaking of buyout problems that could lead to lawsuits: The WSJ is reporting that the group offering to acquire Chinese Internet services company Qihoo 360 Technology Co. (NYSE: QIHU) may cut its $9 billion bid, due to China’s economic and stock market slumps. The buyer consortium is led by Qihoo’s chairman, but also includes China Renaissance Partners, Citic Securities and existing Qihoo shareholder Sequoia Capital.

• Empty days: There were no IPOs this week. There are no IPOs scheduled for next week. And, given the Labor Day holiday, it’s highly unlikely that there will be any IPOs for the week (or maybe two weeks) after that. But this is more about August doldrums and a strangely-late Labor Day than it is about market tumult.

• Because I just can’t help myself: It looks like Donald Trump is now okay with changing the tax treatment of carried interest for everyone (i.e., not just hedge fund managers).

• Correction: As dozens of you noted, Eugene Kleiner was a co-founder of Kleiner Perkins Caufield & Byers, not Eugene Perkins. It’s highly likely that someone named Eugene Perkins exists (or has existed), but that is not really the point.

• In memoriam: Michael Beblo, director of alternative investments for the Pennsylvania State Employees’ Retirement System, passed away earlier this month following heart surgery, according to peHUB.

Michael was 62 years-old, and had joins PSERS in 2012 after spending more than seven years as a director of private equity at the DuPont Trust. Sincerest condolences to his friends and family. In lieu of flowers, you are asked to send donations to The Salvation Army, American Red Cross or The Nature Conservancy.


• Greatbatch Inc. (NYSE: GB) has agreed to acquire medical device OEM supplier Lake Region Medical from Bain Capital and KKR  for approximately $1.73 billion in cash and stock (including around $1 billion of assumed debt). Read more.


•, a Chinese food delivery company, has raised $630 million in new equity funding at a valuation north of $3 billion. Backers include CITIC Private Equity, Hualian Group, China Media Capital and Gopher Asset Management. Read more.

• iZettle, a Swedish provider of mobile point-of-sale solutions, has raised €60 million in Series D funding. Intel Capital and Zouk Capital co-led the round, and were joined by fellow return backers Creandum, Dawn Capital, Index Ventures, Northzone and 83North.

• DreamBox Learning, a Bellevue, Wash.-based adaptive learning platform with an initial focus on K-8 math, has raised $10 million in Series B funding. Owl Ventures led the round, and was joined by Tao Capital Partners.

• PeopleLinx, a Philadelphia-based social business profile optimization platform, has raised $3.5 million in new VC funding from return backers Osage Venture Partners, Greycroft Partners, and MissionOG.

• MagicCube, a Sunnyvale, Calif.-based mobile digital transaction security company, has raised $2.2 million in seed funding from Azure Capital, Epic Ventures, Bialla Venture Partners and individual angels.


• The Carlyle Group has agreed to acquire Novetta, a McLean, Va.-based provider of software and IT services to the U.S. intelligence community, from Arlington Capital Partners. No financial terms were disclosed. Earlier reports suggested that Arlington Capital was seeking more than $650 million (including debt).

• The Carlyle Group is in talks to acquire Innovation Group (LSE: TIG), a British provider of insurance industry software, for approximately $769 million. Read more.

• Thoma Bravo has agreed to acquire a majority stake in DigiCert, a Linden, Utah–based provider of enterprise certificate management solutions. Existing majority investor TA Associates will retain a minority equity position. No financial terms were disclosed.


• No IPO news this morning…


• Autodesk Inc. (Nasdaq: ADSK) has agreed to acquire SeeControl, a San Francisco-based developer of an enterprise Internet of Things cloud service platform. No financial terms were disclosed. SeeControl raised around $5 million in VC funding from firms like Altos Ventures and Peninsula Ventures.

• Conduit Capital Partners has sold its 100% stake in three Jamaican power plants and its 55% stake in a Panama power plant to InterEnergy Holdings. No financial terms were disclosed.

• Robert Bosch GmbH has agreed to acquire Seeo, a Hayward, Calif.-based developer of rechargeable lithium-ion batteries. No financial terms were disclosed. Seeo has raised over $40 million in VC funding from Khosla Ventures, GSR Ventures and Samsung Ventures. Read more at Fortune.

• Tessera Technologies Inc. (Nasdaq: TSRA) has acquired Ziptronix Inc., a Morrisville, N.C.-based , for $39 million in cash. Ziptronix had raised around $12 million in VC funding from firms like Alliance Technology Ventures, Grotech Ventures, Intersouth Partners, Research Triangle Ventures and RTI International.

• Waterland Private Equity has agreed to sell its control position in Swiss nursing home operator SENIOcare to Swiss Prime Site AG for an undisclosed amount.


 Essex Woodlands has purchased around 16% of the outstanding common stock in AxoGen Inc. (Nasdaq: AXGN), an Alachua, Fla.-based provider of surgical solutions for peripheral nerve injuries, for $17.1 million via a private placement.

• Carl Icahn disclosed an 8.5% ownership stake in mining company Freeport-McMoRan Inc. (NYSE: FCX). Read more.

• Mitsubishi Corp. (Tokyo: 8058) has agreed to acquire around a 20% stake in Singapore-listed commodities trader Olam International Ltd. for approximately $1.1 billion. This would make it Olam’s second-largest shareholder behind Temasek (51.4% position). Read more.

• Viola Private Equity has agreed to invest up to $28.4 million into Itamar Medical Ltd. (TASE: ITMR), an Israeli maker of devices for the diagnosis of cardiological conditions and sleep breathing disorders, making it the company’s largest shareholder.

• Wells Fargo is the frontrunner to acquire General Electric’s railcar financing business, which has more than $4 billion in assets, according to Bloomberg. Sumitomo Mitsui Financial also submitted a bid. Read more.


• Owl Ventures, a San Francisco-based VC firm focused on the education tech sector, has closed its first fund with $100 million in capital commitments. Limited partners include The Bill & Melinda Gates Foundation.


• Natalie Bartlett has joined Redpoint Ventures as platform manager, working with portfolio company marketing and talent teams. She previously led portfolio development for Eniac Ventures, and is an advisor to Rough Draft Ventures.

• Gordon MacNeill has joined Genstar Capital as a senior associate. He previously was an associate with Summit Partners.

• David Riley has joined Capria Ventures, a “global impact VC firm,” as a partner and general counsel.

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