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Term Sheet — Wednesday October 21

Random Ramblings

Greetings from my last moments in Half Moon Bay, before heading to SFO for a flight back east. Some notes to lead us off:

• Time to grow: Kohlberg Kravis Roberts & Co. is quietly raising its first-ever fund dedicated to growth equity investing in technology companies, according to multiple sources. The vehicle is only being marketed to a select group of institutional investors (i.e., far fewer than recently got pitchbooks for the firm’s giant new North American buyout fund), most of whom previously asked KKR about how they could participate on the series of tech growth equity deals that the firm has done off its balance sheet (Sonos, FanDuel, Ping Identity, etc.).

It would be structured more like a traditional growth equity fund than as a co-investment fund, which means it will be structured with annual management fees and carried interest.

The fund is not being marketed with a specific target, although KKR is committing to invest upwards of $200 million — an out-sized GP commit that I’m told would be more than 30% of the expected total. This is on top of the nearly $500 million that KKR has already invested off its balance sheet in these sorts of deals.

• Speaking of private growth funds: Coatue Management has closed its second private equity fund with around $1 billion in capital commitments, according to a source familiar with the situation. Last week we had reported on a regulatory filing that showed $543 million in hand. Also worth noting that Coatue has hired Jamie Lee — the son of late JPMorgan vice chairman Jimmy Lee — as an associate in its New York office.

• Moving on: Stephen Schaefer has quietly stepped down as a Houston-based partner with Riverstone Holdings, the energy-focused private equity firm that he first joined in late 2004 from Duke Energy. No words yet on his future plans.

• Dell don’t worry: There has been a lot of hand-wringing in Massachusetts about what Dell’s purchase of EMC will mean for the Bay State, given that EMC is easily the state’s largest tech company (and its fourth or fifth-largest company overall, depending on what metrics you favor). But there is a bit of good news, in that it seems Michael Dell himself wants to be involved in the local market.

More to the point, he’s planning to buy a house in Boston. Michael Dell tells Fortune’s Stacey Higginbotham that he’s already put a down payment on a property in the city — about 30 miles west of EMC’s suburban headquarters — and he’s visiting within the next week to take a longer look and (hopefully) seal the deal.

• Recommended reading: My Fortune colleague Shawn Tully has published a fascinating dive into KKR’s turnaround of First Data, which last week priced the year’s largest IPO. Remember, this is a company that, during the first six years after being purchased by KKR, “had met failure at almost every turn, churning through CEOs along the way.” Read it by going here.


• Collective Health, a San Mateo, Calif.-based provider of enterprise health insurance software and services, has raised $81 million in Series C funding. Google Ventures led the round, and was joined by NEA, Founders Fund, Maverick Capital, Redpoint Ventures and RRE Ventures.


• Silk Road Medical, a Sunnyvale, Calif.-based developer of surgical solutions for treating strokes, has raised $57 million in new equity and debt financing. CRG led the debt financing, and also participated on the equity alongside Warburg Pincus and The Vertical Group.

• Insureon, a Chicago-based online provider of small business insurance, has raised $31 million in new VC funding. Oak HC/FT led the round, and was joined by existing backer Accretive.

• Pyramid Analytics, a Seattle-based business intelligence platform for the enterprise, has raised $30 million in new equity funding. Viola Private Equity led the round, and was joined by return backer Sequoia Capital.

• Portal Instruments, a Cambridge, Mass.-based drug delivery statrtup focused on injectable biologics for chronic diseases, has raised $25 million in Series B funding ($15m of which is a milestone-based tranche). 5AM Ventures led the round, and was joined by return backer Sanofi Sunrise.

• Amino, a San Francisco-based personalized doctor search engine for consumers, has raised $19.4 million in pre-launch funding from Accel Partners, CRV and Rock Health. Read more.

• Honestbee, a Singapore-based on-demand grocery concierge and delivery service startup, has raised $15 million in first-round funding. Formation 8 led the round, and was joined by Pejman Mar Ventures, Gideon Yu and Owen Van Natta.

• Kaleo Software, an El Segundo, Calif.-based enterprise cloud platform for capturing and sharing employee expertise, has raised $7 million in new VC funding. OMERS Ventures led the round, and was joined by Saturn Partners.

• Opinio, an Indian hyperlocal delivery startup, has raised $7 million in Series A funding from Accel Partners, Sands Capital and logistics firm Delvhivery. Read more.

• Science 37, a Los Angeles-based provider of “end-to-end clinical trial services without geographic limitations,” has raised $6.5 million in Series A funding co-led by Lux Capital and dRx Capital.

• Phenom People, a Philadelphia-based developer of human resources technologies, has raised $6 million in Series A funding led by Sierra

• Ourglass, a Boston-based “intimate social network,” has raised $1.6 million in seed funding led by General Catalyst Partners.

• Curacity, a New York-based travel media and booking platform, has raised $1.43 million in seed funding. Greycroft Partners led the round, and was joined by SBNY (f.k.a. Softbank Capital NY), Pinnacle Investments and Third Point Capital.

• DigiTour Media, a Los Angeles-based producer of concerts and other live events that feature social media stars, has raised an undisclosed amount of funding from Viacom, LionTree Entertainment and Slow Ventures. Read more.


• CITIC Capital Partners Japan has acquired Akakura Co., a Japanese designer and retailer of women’s footwear. No financial terms were disclosed.

• Cologix, a Denver-based network neutral interconnection and data center company, has agreed to acquire Net Access LLC, a colocation and workspace recovery provider in Northern New Jersey, from Seaport Capital. No financial terms were disclosed. Cologix shareholders include Columbia Capital, Greenspring Associates and vR Equity Partners.

• Enrollment Advisors LLC, a Birmingham, Ala.-based benefits services firm owned by Century Capital Partners, has agreed to acquire the employer technology division of HighRoads, a Burlington, Mass.-based portfolio company of ABS Capital Partners, AH Ventures, Egan-Managed Capital and Kodiak Venture Partners.

• Epic Health Services Inc., a Dallas-based provider of pediatric skilled nursing and therapy, has acquired Medco, a Houston, Texas-based provider of enteral therapy services, respiratory equipment and incontinence products. No financial terms were disclosed. EHS is a portfolio company of Webster

• The Hilb Group, a Richmond, Va.-based portfolio company of ABRY Partners, has acquired Gentry Insurance Agency, an Apopka, Fla.-based insurance agency. No financial terms were disclosed.

• Kelso & Co. has agreed to acquire a majority stake in Risk Strategies, a Boston-based risk management firm and insurance brokerage, from Kohlberg & Company. No financial terms were disclosed.

• Marlin Equity Partners has acquired eMOBUS, a San Diego-based provider of cloud-based mobility management software, and merged it with existing portfolio company Asentinel LLC. No financial terms were disclosed.

• Ridgemont Equity Partners has acquired Unishippers Global Logistics, a Salt Lake City-based provider of third party logistics services to SMEs, from Five Points Capital (f.k.a. BB&T Capital Partners). No financial terms were disclosed.

• Windjammer Capital Investors has acquired Heritage Food Service Group, a Fort Wayne, Ind.-based distributor of OEM replacement and repair parts for commercial kitchen equipment in the foodservice industry, from Jordan & Co. No financial terms were disclosed.


• American Farmland Co., a New York-based REIT with farmland in California, Florida and Illinois, raised $48 million in its IPO. The company priced 6 million shares at its target price of $8 per share. It will trade on the NYSE under ticker symbol AFCO, while Deutsche Bank Securities, Raymond James and FBR served as lead underwriters.

• Ferrari completed its spin-0ff from Fiat Chrysler Automobiles (BIT: FCA), via an IPO that raised more than $894 million. The sports car maker priced at the high end of its $48-$52 per share range, and now is valued at around $9.8 billion. It will trade on the NYSE under ticker symbol RACE. Read more.

• Kura Oncology, a La Jolla, Calif.-based developer of treatments for solid tumors and blood cancers, has filed for an $86.25 million IPO. It plans to trade on the Nasdaq under ticker symbol KURA, with Citigroup and Leerink Partners serving as lead underwriters. The pre-revenue company has raised in VC funding, from firms like Fidelity (12.73% pre-IPO stake), EcoR1 Capital (9.99%), Arch Venture Partners (9.27%), Tavistock Life Sciences, Partner Fund Management and Nextech Invest.


• American Tower Corp. (NYSE: AMT) reportedly has agreed to acquire a 51% stake in India’s Viom Networks, an Indian mobile tower owner whose shareholders include GIC, Macquarie SBI Infrastructure Fund, Oman Investment Fund, IDFC Private Equity, Tata Teleservices Ltd. and SREI Group. The deal could be worth around $3.1 billion. Read more.


• Lam Research Corp. (Nasdaq: LRCX) has agreed to acquire fellow chip manufacturing equipment maker KLA-Tencor Corp. (Nasdaq: KLAC) for approximately $10.6 billion in cash and stock, or an effective price of $67.02 per share (24.4% premium to yesterday’s closing price). Read more.

• PatientSafe Solutions, a San Diego-based provider of connected workflow and care coordination solutions for healthcare, has acquired the assets of Vree Health, an Annandale, N.J.-based patient engagement and care management platform, from Merck. No financial terms were disclosed. PatientSafe shareholders include EDBI, Merck Global Health Innovation Fund, Camden Partners, TPG Biotech and Psilos Group.

• TriPlay, a New York and Israel-based personal cloud startup, has agreed to acquire New York-based music download site eMusic for an undisclosed amount. TriPlay has raised VC funding from Fortress Investment Group. Read more.

• Western Digital Corp. (Nasdaq: WDC) has agreed to acquire SanDisk Corp. (Nasdaq: SNDK) for approximately $19 billion, or $86.50 per share in cash and stock. This compares to SanDisk’s closing price of $72 per share on Monday.


• J.P. Morgan Chase reportedly is in talks to spin off Highbridge Capital Management’s $22 billion private equity portfolio, while retaining a minority ownership stake. JPM would retain full ownership of Highbridge’s entire $6 billion hedge fund business. Read more.

• Meketa Investment Group is opening a Chicago office next month, which will be led by new managing principal Ted Disabato. Existing Meketa principal Alexandra Wallace also will join the office, relocating from Boston.

• Progress Ventures, a Cambridge, Mass.-based early-stage VC firm, has closed its third fund with $20 million in capital commitments.


• Jieni Gu has joined Ropes & Gray as a Shanghai-based partner in the law firm’s M&A practice. She previously was in the Shanghai office of Weil, Gotshal & Manges, as counsel in the M&A and private equity groups.

• Thomas Horton, the former chairman and CEO of American Airlines, has joined Warburg Pincus as a senior advisor in the industrials and business services group.

• KPMG South Africa has named Michael Rudnicki as head of private equity, following Warren Watkins’ “decision to pursue other interests within the firm.” Rudnicki is a partner in KPMG’s corporate tax practice and leads its M&A and financial services tax and legal practices in South Africa.

• Olaf Jacobi is stepping down as a partner with German venture firm Target Partners, in order “to pursue new career opportunities.” He had been with the firm since 2007.

• Maria Palmer has joined RRE Ventures as director of platform. She previously was chief of staff and executive director of business development at advertising startup Eyeview.

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