Term Sheet — Thursday, October 8

October 8, 2015, 1:56 PM UTC

Random Ramblings

For nearly a year, this space obsessed over Dell Inc. Arguably to the point of reader annoyance. But we're heading back to the Round Rock well, as there are numerous reports that the company is in advanced talks to acquire EMC Corp. Some quick notes on all of this:

1. This is real, not just some banker leaking his pipe dream to the WSJ (which first broke the news last night). We're hearing from banking and company sources that the negotiations have been occurring for at least the past two months. And CNBC's David Faber this morning said this would be Dell buying EMC outright -- perhaps leaving a bit of VMware stub on the side -- rather than some sort of reverse merger that would bring Dell back into the listed fold.

2. I wouldn't blame you for being very skeptical, given that: (a) Dell is much smaller than EMC (market cap of $50 billion before last night's reports, and up more than 4% in aftermarket trading), and (b) That means Dell would need to shove a hose into high-yield credit markets that have been inflexible for normal-sized offerings. On that last point, Faber also reported that the debt would be some combination of junk and investment-grade, although he didn't have further details. One side note is that, were Dell to finance this with some amount of investment-grade debt, that likely means its financials would become public. It had structured its original LBO notes as Rule 144(a) for life, which has kept the company's performance away from prying eyes (like mine and yours).

3. No word yet on what role Silver Lake is playing in this from a financial perspective. The private equity firm invested just over $1 billion to sponsor Dell's 2013 original buyout (not including around $350 million in LP co-investments) out of its $10.3 billion fourth fund. PE funds typically avoid having more than 10% exposure to any one portfolio company, which makes me wonder how much extra Silver Lake would -- or reasonably could -- commit to Dell in order to help finance an EMC purchase. But there is no doubt that Silver Lake managing partner Egon Durban (who sits on the Dell board) is intimately involved in these discussions.

4. Speaking of Durban, it's possible he previewed this deal for us back in July at Fortune Brainstorm Tech. When asked about Dell, he began talking about his admiration for EMC CEO Joe Tucci and his "federation" model. At the time, it seemed like Durban was saying that Dell was planning to follow some of EMC's playbook in terms of spin-outs, but perhaps he was teasing at something much deeper. Or perhaps familiarity breeds combinations. You can watch that interview with Durban by going here. (as a side note, the original Dell buyout was originally sparked by something Durban heard Michael Dell saying during an earlier Fortune Brainstorm Tech event).

5. There has been ongoing discussion of who EMC will tap as CEO once Tucci eventually retires. It seems the answer might be Michael Dell.

Of booms, busts and bellwethers: Pure Storage broke its $17 per share IPO price yesterday, and is down even more this morning. This disappointing performance is being viewed by some as a barmometer for how the public markets view unprofitable tech startups, thus perhaps further depressing new issues.

I'm not dismissing that sentiment's existence, but it would be nonsensical for a company to shelve its S-1 because Pure Storage didn't pop. First, the company still raised its money, so it's the bankers who really shoulder the sadness. Second, Pure Storage's importance is being elevated not so much because of anything about Pure Storage, but rather because almost none of its VC-backed brethren have gone out lately. But if other companies don't file for IPOs because of Pure Storage, why didn't a flood of them file after Fitbit's bang-up offering back in June? This should be about confidence in your own company -- or lack thereof -- rather than macro market conditions.

 Doing fine: The Blackstone Group yesterday reached a settlement with the SEC, related to an investigation into some of the firm’s former private equity fee practices. At primary issue were so-called accelerated monitoring fees, in which Blackstone effectively charged its portfolio companies for services not actually rendered (without properly disclosing such arrangements to its LPs). The SEC also took issue with certain discounts that Blackstone received from law firms from legal work done for the parent company, but which were not also extended to its funds. Blackstone has since discontinued both practices.

The private equity giant agreed to pay a $10 million fine, plus refund nearly $29 million (including interest) to limited partners in its fourth and fifth flagship private equity funds. You can read more here, including comments from the SEC and Blackstone.

 #GetLiquid: I'm looking forward to seeing around 800 of you tonight at our sold-out Liquidity Event in San Francisco. For those with tickets, doors open at 5:30pm at Jillian's (175 4th St.). We'll have some food and an open bar, all courtesy of our generous sponsors: Andreessen Horowitz, Gunderson Dettmer, PitchBook Data, TPG Growth and Winmark Capital.





 Apollo Global Management is considering a takeover offer for Chemours Co. (NYSE: CC), the performance chemicals group that was recently spun out of DuPont Co. (NYSE: DD), according to Bloomberg. Chemours has a current market cap of around $1.4 billion. Read more.


 Move Guides, a UK-based platform for talent mobility, has raised $15.6 million in Series B funding co-led by New Enterprise Associates and Notion Capital. www.moveguides.com

 Netsertive, a Morrisville, N.C.-based digital marketing intelligence company, has raised $15 million in Series C funding. River Cities Capital Funds led the round, and was joined by return backers RRE Ventures, Harbert Venture Partners and Greycroft Partners. www.netsertive.com

 TSheets, a Boise, Idaho-based developer of cloud-based time tracking technologies, has raised $15 million in Series A funding from Summit Partners. www.tsheets.com

 Hubba, a Toronto-based B2B product sharing and discovery platform, has raised C$11 million in Series A funding. Real Ventures led the round, and was joined by Kensington Venture Fund, affiliates of Canso Investment Counsel and return backer Brightspark Ventures. www.hubba.com

 Hixme Insurance Solutions Inc., an Agoura Hills, Calif.-based “platform that helps employers transition to a new type of market-based private benefit exchange,” has raised $10.4 million in Series A funding led by Kleiner Perkins Caufield & Byers. www.hixme.com

 Aquto, a Boston-based provider of sponsored data monetization solutions, has raised $8 million in Series B funding. Iris Capital led the round, and was joined by return backers Matrix Partners and Northbridge Venture Partners. www.aquto.com

 Talkdesk, a San Francisco-based provider of cloud-based call center software, has raised $6 million in Series A funding. Salesforce Ventures led the round, and was joined by return backers DFJ and Storm Ventures. www.talkdesk.com

 Reflektive, an employee performance feedback platform, has raised $3.6 million in seed funding led by Andreessen Horowitz. www.reflektive.com

 Geospock, a UK-based developer of geospatial database technology, has raised £3.5 million in Series A funding. Backers include the Cambridge Innovation Capital and Parkwalk Fundswww.geospock.com

 HipVan, a Singapore-based online furniture retailer, has raised $3.3 million in Series A funding. Golden Gate Ventures led the round, and was joined by East Ventures and return backers LionRock Global and Tovio Annus. Read more.

 ESS Inc., a Portland, Ore.-based developer of a low-cost, long-duration battery for commercial and utility-scale energy storage, has raised $3.2 million in Series A funding led by Pangaea Ventures. www.energystoragesystems.com


 Athena Art Finance Corp., a New York-based provider of non-recourse loans exclusively collateralized by works of fine art, has launched with $280 million in equity capital from The Carlyle Group and the Pictet Group’s private equity unit. www.carlyle.com

 The Blackstone Group has agreed to acquire BioMed Realty Trust (NYSE: BMR), a San Diego-based REIT focused on office and lab space for life sciences companies, for around $8 billion (including assumed debt). The $23.75 per share price represents a 10% premium over yesterday’s closing price. Read more.

 The Carlyle Group has agreed to acquire the Rhode Island State Energy Center, a 583 MW natural-gas fired power plant located in Johnston, R.I., from subsidiaries of Entergy Corp. (NYSE: ETR). The deal is valued at $490 million. www.carlyle.com

 Carson Air Ltd., a provider of fixed-wing air ambulance services, air cargo services and flight school training in Western Canada, has secured an undisclosed amount of private equity funding from Wynnchurch Capital. www.carsonair.com

 Compassus, a Brentwood, Tenn.-based portfolio company of Audax Group and Formation Capital, has acquired Hospice Advantage, a Bay City, Mich.-based based hospice care organization, from Sentinel Capital Partners. www.hospiceadvantage.net

 Dyal Capital Partners has acquired a “passive minority interest” in Chenavari Investment Managers, a UK-based alternative asset manager with $5.4 billion in AUM. No financial terms were disclosed. Chenavari focuses on credit, structured finance, real estate and private debt strategies. www.chenavari.com

 GoodRx, a Santa Monica, Calif.-based prescription price transparency platform, has raised an undisclosed amount of private equity funding from Francisco Partners and Spectrum Equity. www.goodrx.com

 Idera Inc., a Houston-based portfolio company of TA Associates, has acquired Embarcadero Technologies, a San Francisco-based provider of software for application and database development, from Thoma Bravo. No financial terms were disclosed.

 Investcorp has acquired POC, a Swedish maker of skiing and cycling helmets, gear and accessories, for $65 million. www.investcorp.com

 Motion PT Holdings, a provider of physical therapy and occupational therapy services in New York, has acquired New York-based Bradley & Monson Physical Therapy. No financial terms were disclosed. Motion PT is a portfolio company of Pharos Capital Group. www.pharosfunds.com

 PSKW, a Bedminster, N.J.-based provider of patient prescription medication assistance solutions and payment reimbursement services, has secured an undisclosed amount of private equity funding from Genstar Capital. www.pskw.com


 Coffee Day Enterprises, an Indian coffee chain, is expecting an initial market cap of upwards of $1.04 billion when it goes public next week. Shareholders include KKR, Standard Chartered Private Equity and New Silk Route. It would be the largest India IPO in nearly three years. Read more.

 CytomX Therapeutics, a South San Francisco-based developer of cancer therapeutics, raised $80 million in its IPO. The company priced 6.7 million shares at $12 per share (below $14-$16 offering range), for an initial market cap of approximately $419 million. It will trade on the Nasdaq under ticker symbol CTMX, while BofA Merrill Lynch, Jefferies and Cowen & Co. served as lead underwriters. The company reports around a $12 million net loss on nearly $4 million in revenue for the first half of 2015. It has raised over $130 million in VC funding, including a $70 million Series D round this past June. Shareholders include Third Rock Ventures (30.8% pre-IPO stake), Canaan Partners (17.4%), Fidelity (8.7%), Roche (6.8%), Pfizer (5.7%), Casdin Capital, Cormorant Asset Management, Deerfield Management, Perceptive Advisors, Redmile Group, Tekla Healthcare Investors, Tekla Life Sciences Investors, Venrock and Wellington Management Co. www.cytomx.com


 Astorg Partners has hired Rothschild to explore a sale of Ethypharm, a French drug developer focused on treatment of pains and addictions, according to Bloomberg. A deal could be worth between €700 million and €800 million. Read more.

 CyberArk (Nasdaq: CYBR) has agreed to acquire Viewfinity Inc., a Waltham, Mass.-based provider of Windows privilege management and application control software, for $30.5 million in cash. Viewfinity had raised around $28 million in VC funding from Longworth Venture Partners, Giza Venture Capital and JK&B Capital. www.viewfinity.com

 HomeAway Inc. (Nasdaq: AWAY) has acquired Dwellable, a Seattle-based vacation rental search engine and app. No financial terms were disclosed. Dwellable’s seed backers included Maveron and Version One Ventures. www.homeaway.com

 OpenGate Capital has sold TV Guide Magazine and TV Insider to Troy, Mich.-based NTVB Media for an undisclosed amount. www.ntvbmedia.com

 Pandora (NYSE: P) has agreed to acquire Ticketfly Inc., a San Francisco-based social ticketing platform for live events, for $450 million in cash and stock. Ticketfly has raised over $80 million in VC funding from firms like Sapphire Ventures, Northgate Capital, Riverwood Capital, Cross Creek Capital and Mohr Davidow Ventures. Read more.

 Roper Technologies (NYSE: ROP) has acquired Aderant, an Atlanta-based provider of legal software, from Madison Dearborn Partners for $675 million. www.aderant.com


 Canadian Oil Sands (TSX: COS) has rejected a C$6.6 billion hostile takeover bid from Suncor Energy (TSX: SU). Read more.

 Macquarie Group has agreed to acquire Esanda Dealer Finance, an Australian auto finance company, from the Australia and New Zealand Banking Group for A$8.2 billion. Read more.

 SABMiller (LSE: SAB) has rejected an increased takeover offer from Anheuser-Busch InBev, saying the $104 billion bid still undervalued the company.

 Sony Corp. (Tokyo: 6758) has acquired Softkinetic Systems SA, a Belgian developer of gesture-based platforms. No financial terms were disclosed. www.softkinetic.com


 The AGIC Group, a new private equity firm led by Henry Cai (ex-Asia Pacific chairman of corporate finance at Deutsche Bank),has closed on $650 million for its $1 billion-targeted debut fund, according to Bloomberg. The fund will focus on industrial companies in German-speaking countries that are seeking to expand in China. Read more.

 Black Diamond Capital Management, a Greenwich, Conn.-based alternative asset firm focused on middle-market credit, has closed its fourth fund with $1.5 billion in capital commitments. Credit Suisse served as placement agent. www.bdcm.com


 Peter Miholich, former global head of strategic equity at RBS, has joined Terra Firma Capital Partners, according to Dow Jones. Read more.

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