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Term Sheet — Thursday, September 3

Random Ramblings

A bunch of notes to kick off our Thursday:

• The downside of patience: AOL this morning announced that it will acquire Millennial Media (NYSE: MM), Baltimore-based mobile advertising platform, for $250 million, or $1.75 per share. That’s a 30.6% premium over yesterday’s closing price for MM, but a far cry from its $13 per share IPO price in March 2012, let alone the $25 per share closing price on its first day of trading. That would represent the stock’s high-water mark, as it broke its IPO price in December 2012 and never recovered.

VCs didn’t sell any shares in the IPO, and many held onto a substantial portion of stock as the ship continued to sink (i.e., well past lock-up expiration). Today, for example, Columbia Capital still holds around 11.3 million of its 13.5 million shares. New Enterprise Associates still has 8.22 million of its 9.83 million shares, while Bessemer Venture Partners retained 6.89 million of its 13.5 million shares. It appears that Charles River Ventures sold off all of its 10.36 million shares.

Other current shareholders include investors in JumpTap, which had raised more than $120 million before being acquired by MM for around $225 million in stock in mid-2013 (when the shares were still close to $7 each).

• Promotion: Kleiner Perkins Caufield & Byers yesterday informed limited partners that it has expanded the senior management team for its early-stage VC practice. Wen Hsieh, who joined the Silicon Valley stalwart back in 2006, will become the sixth member of a group that was previously thinned out in a late 2013 reorganization. While Hsieh already was leading deals and taking board seats as a general partner, he now will have a formal vote on final investment decisions. Read more here.

• Let’s try this again: Yesterday I suggested that you read a Naked Capitalism blog post about how CalPERS private equity boss Real Desrochers appeared to misstate some pretty facts about how PE funds are structured (particularly related to management fees and fee offsets), during an investment committee meeting. And then you, dear rabid Term Sheet readers, seem to have caused the blog to crash with your thousands of clicks. It soon recovered, and you can read the post here. Much more on this situation tomorrow morning — including an update on my 4+ year effort to get an interview with Desrochers — and I really want to hear your thoughts (to send me email, just hit “reply” to this message).

• Quiz Time: Can you name the consumer-focused partner at a big-name European buyout firm who recently gave notice (he’s currently “on holiday” if you ring his line). Hint: The guy has a pretty fashionable deal history.

• Canary chirps: A public auction for a San Francisco real estate parcel that could hold a 750-foot tower was called off this week after “several of the developers, spooked in part by the meltdown of international stock markets, informed the agency they wouldn’t be submitting bids.” Has the Bay Area reached peak property?

• LP world: The $130 billion Teacher Retirement System of Texas is opening an office in London, per the WSJ. It will be led by existing staffer Vaughn Brock (director of special projects), and is designed to help the public pension giant gain “more visibility into European deal flow [as it] looks to position itself to compete with an encroaching wave of sovereign wealth funds for the choicest opportunities.”

Interesting development. Not unique — particularly when you look at what some Canadian public pensions have been up to — but worth keeping tabs on to see what comes out of the TRS office, and if other U.S. public systems follow suit.

 

THE BIG DEAL

• Petco, a San Diego-based pet supplies retailer, has received takeover offer from private equity firms like The Carlyle Group and KKR, as first reported by the WSJ.

Petco, currently owned by TPG Capital and Leonard Green & Partners, recently filed for a $100 million IPO, reporting $75 million of net income on nearly $4 billion in revenue for the fiscal year ending January 31. Read more

VENTURE CAPITAL DEALS

• Netskope, a London-based cloud access security broker, has raised $75 million in Series D funding. Iconiq Capital led the round, and was joined by return backers Accel Partners, Lightspeed Venture Partners and the Social + Capital Partnership. www.netskope.com

• Zivame, an India-based lingerie e-commerce company, has raised $40 million in Series C funding. Zodius Technology Fund and Khazanah Nasional Berhad co-led the round, and were joined by return backers Unilazer, IDG Ventures and Kalaari Capital. Read more.

• Vestiaire Collective, a French online marketplace for used luxury clothes, has raised $37 million in Series D funding. Eurazeo led the round, and was joined by return backers Balderton Capital, Conde Nast, Idinvest Partners and Ventech. www.VestiaireCollective.com

• Wrap Media, a San Francisco-based “mobile-first interactive storytelling and commerce platform,” has raised $12.7 million in Series B funding. Raine Ventures and ProSiebenSat.1 Media co-led the round, and were joined by Christopher Crain, Dream Incubator, FF Angel LLC, Salesforce Ventures and Transmedia Capital. www.wrap.co

• ZIRX, a San Francisco-based on-demand valet service, has raised an undisclosed amount of strategic funding from BMW i Ventures. Earlier this year, the company closed a $30 million Series B round from Bessemer Venture Partners, Norwest Venture Partners and Trinity Ventures. www.zirx.com

PRIVATE EQUITY DEALS

• Aiglon Capital has acquired Consolidated Lumber Co., a Stillwater, Minn.-based provider of building and construction materials. No financial terms were disclosed. www.abc-clc.com

• BeneSys Inc., a Troy, Mich.-based portfolio company of The Riverside Company, has acquired A&I Benefit Plan Administrators, a Portland, Ore.-based provider of third-party administration services for Taft-Hartley multiemployer plans. No financial terms were disclosed. www.aibpa.com

• Burton Saw and Supply Holdings, a Eugene, Ore.-based portfolio company of Pfingsten Partners, has acquired Cut Technologies Inc., a wood saw maker with offices in Canada and Bellingham, Wash. No financial terms were disclosed. www.burtonsaw.com

• BayBridge Seniors Housing Inc., a portfolio company of Ontario Teachers’ Pension Plan, has agreed to acquire Amica Mature Lifestyles Inc. (TSX: ACC), a Vancouver-based provider of luxury seniors residences, for around C$578 million. The C$18.75 per share deal represents a 113.31% premium over Tuesday’s closing price. Read more.

• The Blackstone Group, via its Tactical Opportunities unit, has acquired a “significant equity stake” in The PMI Group (OTC: PMIR), a San Ramon, Calif.-based residential mortgage insurer. No financial terms were disclosed. www.pmigroup.com

• Blue Point Capital Partners has sponsored a recapitalization of Russell Food Equipment Ltd., a Vancouver-based distributor, manufacturer and service provider of foodservice equipment and supplies in Canada. No financial terms were disclosed. www.russellfood.ca

• Clinical Pharmacy Services, a Gary, Tenn.-based operator of radiopharmacies and mobile PET/CT imaging units, has secured an undisclosed amount of equity funding from Webster Capital. www.webstercapital.com

• Leonard Green & Partners has acquired RestorixHealth, a Tarrytown, N.Y.-based provider of wound care management solutions to hospitals, from Sverica International. No financial terms were disclosed. www.restorixhealth.com

• Levine Leichtman Capital Partners has completed its previously-announced acquisition of Trinity Consultants, a Dallas-based environmental consulting firm, from Gryphon Investors. No financial terms were disclosed. www.trinityconsultants.com

• Marlin Equity Partners has acquired AdvancedMD, a South Jordan, Utah-based provider of software to the independent physician practice market, from Automatic Data Processing (Nasdaq: ADP). No financial terms were disclosed. www.advancedmd.com

• Riverlake Partners is sponsoring a merger of VideoSurveillance.com, a Portland, Ore.-based video surveillance integration company, with CamGuard, a Corona, Calif.-based provider of managed video surveillance services. No financial terms were disclosed. www.riverlakepartners.com

• Seven Mile Capital Partners has acquired Huron Inc., a Lexington, Mich.-based maker of tubular assemblies and precision-machined components for the North American auto industry, from Trive Capital. No financial terms were disclosed. www.huroninc.com

• Sundial Brands, an Amityville, N.Y.-based maker of branded skin and hair products, has raised an undisclosed amount of minority equity funding from Bain Capital Partners. www.sundialbrands.com

• Thoma Bravo has agreed to acquire a majority stake in MedeAnalytics Inc., an Emeryville, Calif.-based provider of cloud-based financial performance analytics for the healthcare industry. Existing investors Bain Capital Ventures and Emergence Capital Partners will remain minority shareholders. No financial terms were disclosed. www.medeanalytics.com

IPOs

Enovation Controls Inc., a Tulsa, Okla.-based provider of digital control systems for gaseous fuel engines and engine-driven equipment, has withdrawn registration for a $100 million IPO. The company had originally filed for the offering last September, with Morgan Stanley and UBS serving as lead underwriters. It reported a $24 million net loss on $142 million in revenue for the first half of 2014. www.enovationcontrols.com

• GC Aesthetics, an Ireland-based breast implant maker focused on non-U.S. markets, has withdrawn registration for a $75 million IPO. has filed for a $75 million IPO. The company had originally filed for the offering in June 2014, with BofA Merrill Lynch, Deutsche Bank and Cowen & Co. serving as underwriters. It later reported an $89 million net loss on $52.8 million in revenue for 2014. Shareholders include Montreux Equity Partners (48% stake), Oyster Capital Partners (8.7%) and OrbiMed Advisors (8.2%). www.gcaesthetics.com

EXITS

• AOL, a unit of Verizon, has agreed to acquire Millennial Media (NYSE: MM) for approximately $250 million, or $1.75 per share. Millennial went public in 2012 at $13 per share. Current shareholders include Columbia Capital, New Enterprise Associates and GrandBanks Capital. Read more.

• Apogee, an Austin, Texas-based provider of on-campus residential networks and video solutions, has acquired Campus Televideo, a Stamford, Conn.-based provider of higher education video services. No financial terms were disclosed. Sellers include Eureka Growth Capital. www.apogee.us

• H.I.G. Capital has sold 7S Group, a German provider of HR-related services, to ManpowerGroup (NYSE: MAN). The deal is valued at $144.9 million, plus the possibility of earn-outs based on 2015 operational results. www.7s.com

• Veolia (Paris: VIE) has acquired AKG Kunststof Groep, a Dutch plastics recycler with €34 million in 2014 revenue, from private equity firm Wadinko NV. No financial terms were disclosed.

OTHER DEALS

• B&G Foods (YSE: BGS) has agreed to acquire frozen and canned food company Green Giant from General Mills (NYSE: GIS) for $765 million in cash. Read more.

• DreamWorks may be ending its partnership with Walt Disney Co. (NYSE: DIS), once their current 7-year deal expires next summer, according to The Hollywood Reporter. Read more.

• Syngenta (Swiss: SYN) said that it will launch a sale process for its global vegetable seed business, which could be valued at upwards of $3 billion. The company also said it would buy back more than $2 billion of stock. Both moves come as Syngenta is facing shareholder resentment over its decision to reject a $46 billion buyout offer from Monsanto. (NYSE: MON). Read more.

FIRMS & FUNDS

• Ardian, a France-based private investment firm, has opened a new office in Madrid that will include an infrastructure team (led by managing director Juan Angoitia) and mid-cap buyouts (led by managing director Gonzalo Fernandez-Albiñana). www.ardian.com

• RoundTable Healthcare Partners has closed its fourth flagship private equity fund with $650 million in capital commitments. It also raised $200 million for its third captive subordinated debt fund. www.roundtablehp.com

MOVING IN, UP, ON & OUT

• Erin Lansky has joined BDT Capital Partners as an associate. She previously was an associate on GTCR’s healthcare team.

• Vinit Nijhawan has stepped down as managing director of Boston University’s Office of Technology Development. No word yet on his future plans. www.bu.edu

• Eric Olson has joined Applied Genetic Technologies Corp. (Nasdaq: AGTC) as senior director of corporate development. He previously spent nine years with Genzyme. www.agtc.com

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