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Term Sheet — Thursday, September 10

Random Ramblings

Some notes to kick off your Thursday…

• It gets worse: Last spring, VC-backed programmatic ad startup RadiumOne fired founder and CEO Gurbaksh “G” Chahal after he plead guilty to a pair of misdemeanors: One for domestic violence battery and one for battery, both related to allegations that he hit and kicked his then-girlfriend 117 times over a 30-minute period (which, charmingly, he videotaped).

But the actual termination wasn’t immediate, even though RadiumOne was preparing to go public. Here is some of what I wrote after Chahal plead guilty, but while he remained CEO:

Why is Chahal still CEO? I called and emailed each of the VC board members yesterday to ask, but none of them responded. Do they honestly believe that this man could be brought on an IPO road-show? How do you convince prospective investors that they should trust their money to someone who has displayed such a gross violation of self-control and contempt for society’s moral boundaries? How do you continue to ask employees to work for such a person? At what point do they realize that their fiduciary duty and doing the right thing are one in the same?

I would hope that some removal process is currently underway, thus explaining the lack of return calls. Remember, the guy pled guilty. And before anyone says “Well, he only pled guilty to misdemeanors, not felonies” – please remember that the misdemeanors were directly related to beating his girlfriend. This isn’t about political views or business decisions or yelling at subordinates. It’s about out-and-out violence. If that isn’t a red line for the RadiumOne directors, then perhaps they don’t have one.

Now comes a new story from the WSJ’s Jeff Elder, revealing that the VC-laden board actively tried to get Chahal off the legal hook.

For example, Westly Group founder Steve Westly (a former California state official) introduced Chahal to former San Francisco Mayor Willie Brown, who knew the district attorney and may be able to ‘back him off.’ When Chahal said Brown wanted $1 million for his efforts, Westly reportedly replied: “Wow. That’s pricey, but probably worth it if he can make it happen. I suspect he will pull out all the stops to get this done.”

Subsequent emails suggest that RadiumOne’s board was aware of, and supportive of, Westly’s actions. Moreover, there are legal memos discussing whether or not the misdemeanors would even need to be revealed to prospective IPO investors. And then there is then-CFO (and current CEO) Bill Lonergan telling Chahal in the midst of media pressure that “the board has your back completely.”

In the end, of course, the board folded. Not because it was the right thing to do, but because it had failed to sufficiently cover up Chahal’s vile actions. Disgraceful.

• As a reminder: The RadiumOne board members were Steve Westly (The Westly Group), Ajay Chopra (Trinity Ventures), Robin Murray (Adams Street Capital) and David Silverman (Crosslink Capital).

• Secondary stuff: There was around $20 billion of private secondaries activity in the first half of 2015 (81% of which was private equity), according to the results of a survey conducted by Evercore Private Capital Advisory. Of that, 74% was for LP stakes, 14% for GP restructurings and 12% for direct secondaries. Also worth noting the buyside concentration, with 50% of the transaction volume coming from the top 7 buyers, and 80% coming from the top 15 buyers.

• Click click: Fortune this morning revealed its annual list of the Most Powerful Women in Business. Top spot went to GM CEO Mary Barra, while other names of Term Sheet relevance included Fidelity Investments boss Abigail Johnson (#6), J.P. Morgan Asset Management CEO Mary Erdoes (#29) and Citigroup Latin America chief Jane Fraser (#41). View the full list here, and get much more related content over at our MPW Channel.

• Where in the world? Identity management startup Okta earlier this week raised $75 million in new VC funding at a $1.2 billion valuation. Pretty good timing, considering that I’ll be leading a “private IPO” panel next Wednesday that features Okta co-founder and COO Freddy Kerrest (along with CBInsights CEO Anand Sanwal). It takes place in Boston at the DEMO Traction Enterprise event. More info here.

 

THE BIG DEAL

• Optimal+, an Israeli provider of testing software for the semiconductor manufacturing process, has raised $42 million in growth equity funding. KKR led the round, and was joined by return backers Carmel Ventures and Pitango Venture Capital. Read more.

VENTURE CAPITAL DEALS

• ThredUP, a San Francisco-based online consignment store, has raised $81 million in Series E funding. Goldman Sachs Investment Partners led the round, and was joined by return backers Trinity Ventures, Upfront Ventures, Highland Capital Partnersand Redpoint Ventures. Read more.

• Fundbox, a New York-based cash flow optimization tool for small businesses, has raised $50 million in Series C funding. Spark Capital Growth led the round, and was joined by Bezos Expeditions, Sound Ventures, Entrée Capital and return backers Khosla Ventures, General Catalyst Partners, Shlomo Kramer and Blumberg Capital. Read more.

• Delphinus Medical Technologies Inc., a Plymouth Township, Mich.-based developer of breast ultrasound technology, has raised $39.5 million in Series C funding. Venture Investors led the round, and was joined by Hopen Life Science Ventures, Waycross Ventures and return backers Arboretum Ventures, Beringea, and North Coast Technology Investors. www.delphinusmt.com

• Chain Inc., a San Francisco-based provider of blockchain technology solutions to financial institutions, has raised $30 million in new VC funding. Visa, Nasdaq, Citi Ventures, Capital One Ventures, Fiserv and Orange were joined by return backers Khosla Ventures, RRE Ventures, Thrive Capital and SV Angel. www.chain.com

• Orchard Platform, a New York-based technology and infrastructure provider for marketplace lending, has raised $30 million in Series B funding. Thrive Capital led the round, and was joined by Victory Park Capital, Thomvest Ventures, Jon Winkelried (ex-president of Goldman Sachs) and return backers Spark Capital, Canaan Partners, QED Investors, Nyca Partners, Conversion Capital, John Mack and Tom Glocer. www.orchardplatform.com

• Unified, a New York-based marketing and analytics technology startup, has raised $30 million in Series B funding. iHeartMedia led the round, and was joined by Advance Publications, Upfront Ventures, and Foundry Group. www.unifiedsocial.com

• Novadip Biosciences, a Belgium-based developer of “3-dimensional tissues” derived from adipose stem cells to regenerate bone and soft tissues, has raised €28 million in Series A funding. New Science Ventures led the round, and was joined by VIVES Louvain Technology Fund, NivelInvest (Start-Up), Fund+, Integrale, SRIW, SFPI-FPIM, Epimède and individual angels. Novadip Biosciences is a spinout from Université catholique de Louvain. www.novadip.com

• CartoDB, a New York-based location data analysis and visualization engine, has raised $23 million in Series B funding. Accel Partners led the round, and was joined by Salesforce Ventures and return backers Earlybird Ventures and Kibo Ventures. www.cartodb.com

• Discern, a San Francisco-based “signals-as-a-service” startup for investment professionals, has raised $20 million in Series A funding led by Artiman Ventureswww.discern.com

• Paxata, a Redwood City, Calif.-based “adaptive data preparation” platform for the enterprise, has raised $18 million in Series C funding. EDBI led the round, and was joined by return backers Accel Partners India, Walden-Riverwood Ventures and Toba Capital. www.paxata.com

• HookLogic, a New York-based provider of commerce search advertising solutions, has raised $15.5 million in Series C funding. Fung Capital and Mousse Partners co-led the round, and were joined by return backers Bain Capital Ventures and Intel Capital. www.hooklogic.com

• VolunteerSpot, an Austin, Texas-based free event planning and community engagement platform for parents, teachers and volunteers, has raised $1.3 million in VC funding led by AXA Strategic Ventures. www.volunteerspot.com

PRIVATE EQUITY DEALS

• Accella Performance Materials, a Maryland Heights, Mo.-based manufacturer of polyurethanes and recycled rubber products, has acquired Burtin Polymer Labs and Coating and Foam Solutions, a Cartersville, Ga.-based maker of spray foams and coatings for insulation and roofing. No financial terms were disclosed. APM is a portfolio company of Arsenal Capital Partnerswww.accellacorp.com

• CDK Global Inc. (Nasdaq: CDK), a Hoffman Estates, Illinois-based retail technology company with a market cap north of $8 billion, is allowing certain private equity firms — including The Blackstone Group and Hellman & Friedman — to conduct financial due diligence, according to Bloomberg. The company, which spun off from Automatic Data Processing Inc. (Nasdaq: ADP) last year, is working with Morgan Stanley, although it reportedly has not determined whether or not to sell the business. Read more.

• Danube Co. Ltd., a Saudi Arabian supermarket chain, is in talks to sell around a 20% stake in the business to Investcorp, according to Bloomberg. The deal could value Danube at around $2 billion. Read more.

• Dicom Transportation Group, a Quebec-based provider of B2B expedited transportation services, has acquired Eastern Connection, a Woburn, Mass.-based provider of B2B pickup and delivery services. No financial terms were disclosed. Dicom is a portfolio company of Wind Point Partners. www.easternconnection.com

• Everstream Solutions LLC, a Cleveland-based network services provider, has secured $50 million in equity funding from M/C Partners and investors advised by J.P. Morgan Asset Management’s private equity group. Everstream had been a subsidiary of nonprofit corporation OneCommunity, which will retain a minority ownership stake. www.everstream.net

• Tamarind Energy, a Malaysian oil and gas company backed by The Blackstone Group, reportedly has interest in acquiring some Santos Ltd. (ASX: STO) oil and gas projects in Vietnam, Malaysia and Indonesia that could be worth between $500 million and $700 million, according to The Australian. Deutsche Bank and Lazard are managing the process. www.santos.com.au

• Thoma Bravo and Vista Equity Partners are among the final bidders for Solera Holdings (NYSE: SLH), a Westlake, Texas-based provider of risk management software to insurers, according to Bloomberg. The company could be purchased for around $3.6 billion, or $53 per share. Read more. 

IPOs

• AnaptusBio, a San Diego-based developer of antibody product candidates focused on unmet medical needs in inflammation and immuno-oncology, has filed for an $86.25 million IPO. It plans to trade on the Nasdaq under ticker symbol ANAB, with Stifel and BMO Capital Markets serving as lead underwriters. The company reports a $431,000 net loss on nearly $9 million in collaboration revenue for the first half of 2015. Shareholders include Frazier Healthcare (23.2% pre-IPO stake), Novo AS (21.3%), Avalon Ventures (15.2%), Alloy Ventures (9.1%) and HBM Healthcare Ventures (6.7%). www.anaptusbio.com

• First Data Corp., an Atlanta-based payments technology company backed by KKR, is planning to seek “at least $2.5 billion” in its upcoming IPO, according to Bloomberg. That would make it the year’s largest offering, and it may list by the end of September. Read more.

• PSAV, a Long Beach, Calif.-based event technology and audiovisual company, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol PSAV, with Goldman Sachs and Morgan Stanley serving as lead underwriters. The company reports $15 million in net income on $792 million in revenue for the first six months of 2015, compared to $865,000 in net income on $600 million in revenue for the year-earlier period. Goldman Sachs and Olympus Partners acquired PSAV two years ago from Kelso & Co. www.psav.com

EXITS

• Gores Group has hired Rothschild to find a buyer for German auto parts maker Hay Group GmbH, according to Reuters. The deal could be worth around €400 million. Read more.

• Inrix Inc., a Kirkland, Wash.-based provider of real-time traffic information technology, has acquired ParkMe, a Santa Monica, Calif.-based provider of smart parking services. No financial terms were disclosed. Inrix has raised around $78 million in VC funding from August Capital, Bain Capital Ventures, Kleiner Perkins and Venrock. ParkMe had raised around $8 million in VC funding from firms like IDG Ventures, Fontinalis Partners, Angeleno Group. www.inrix.com

• Neustar Inc. (NYSE: NSR) has agreed to acquire the caller authentication assets of Transaction Network Services, a Reston, Va.-based portfolio company of Siris Capital Group. The deal is valued at $220 million in cash. www.tnsi.com

OTHER DEALS

• Diageo PLC (LSE: DGE) said it will purchase another 15.7% stake in its Guinness Nigeria subsidiary for $208 million, bringing its total stake up to 70%. Read more.

• Ericsson has agreed to acquire Envivio Inc. (Nasdaq: ENVI), a San Francisco-based provider of video processing and delivery software, for around $125 million in cash ($4.10 per share). www.envivio.com

• IronSource, an Israel-based mobile software company that has been valued at $1 billion by its VCs, has agreed to merge with San Francisco-based peer Supersonic. No financial terms were disclosed. Read more

• Sun Life Financial (NYSE: SLF) has agreed to acquire the employee benefits business of Assurant (NYSE: AIZ) for $975 million. Read more.

• Värde Partners has acquired a majority stake in Trimont Real Estate Advisors, an Atlanta-based real estate financial services firm. No financial terms were disclosed. www.trimontrea.com

FIRMS & FUNDS

 Accolade Partners has closed its fifth venture capital and growth equity fund-of-funds with $200 million in capital commitments. www.accoladepartners.com

MOVING IN, UP, ON & OUT

• Walter Galvin, former CFO of Emerson Electric Co., has joined Irving Place Capital as a senior advisor. www.irvingplacecapital.com

• Harry Jones has joined British private equity firm NorthEdge Capital as a Manchester-based investment executive. He previously was with Deloitte. www.northedgecapital.com

• Michael Murray and Bryan Zair have joined Jones Day as partners in the law firm’s M&A practice as partners in Chicago and Detroit, respectively. Both were previously with Mayer Brown. www.jonesday.com

• Matthew Whiting has joined G2 Capital Advisors as a managing director and head of financial restructuring. He previously spent seven years in Lazard’s restructuring group. www.g2capitaladvisors.com

• Dorothy Koo Boulland has joined Founders Equity Partners as operations and administrative manager. She previously was with Data Collective. www.fequity.com

• Jordan Matusow has joined the distressed debt team of Monomoy Capital Partners, after having served as executive director of credit sales at Nomura Securities. www.mcpfunds.com

• Michael Giampapa has joined Institutional Venture Partners as an associate. He previously was part of the tech investment banking group at J.P. Morgan. www.ivp.com

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