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Term Sheet — Wednesday, December 2

December 2, 2015, 3:18 PM UTC

Random Ramblings

Today's deal buzz is a Wall Street Journal story about how Yahoo's board is "planning a series of meetings this week to consider selling off the company’s flagging Internet businesses and how to make the most of its valuable stake in Chinese e-commerce powerhouse Alibaba Group."

I've so far had a handful of conversations with folks who are either close to Yahoo or potential bidders (including within the past hour), and here is what I'm hearing so far:

Legit? Despite the WSJ portrayal, these are not meetings that are being specially called to discuss a sale. These are the company's regularly-scheduled financial planning meetings. So of course an evaluation of strategic options will be included, particularly for a company under activist pressure that has recently lost so many senior executives.

That said, a sale of "core Yahoo" -- or at least a serious attempt -- does seem likely, perhaps as early as Q1 2016.

Financial sponsors? Private equity will certainly take a hard look, particularly those firms that had conducted due diligence back in 2011 (here's a refresher). The real question, however, is if private equity could find enough leverage to make such a deal work. Big consumer tech deals are few and far between (is Skype the last?), and the pricing on this would be particularly tricky. Do you pay a premium to EBIDTA, even though the actual stock market is effectively valuing Yahoo's core business (ex-Alibaba and cash on hand) at zero? If private equity were to buy, one would imagine it would do a lot of cutting, in order to grow a smaller core of homepage, Tumblr, news, sports and mail (i.e., cut to expand, destroy to create, etc.). Then try to flip it to a strategic.

Then who? Strategics are a better fit. Not only because they needn't find the debt, but because they could make better immediate use of Yahoo's large user base. Expect Comcast, AT&T and Verizon to have interest (yes, Verizon already bought AOL, but that was more for the ad biz).

Not a break-up: Yahoo's properties are so tightly integrated on the back-end -- including the basic username/email indentifiers -- that it would be very hard for the company to sell Sports to one party, Mail to another, etc.

Marissa: At this point there is a good argument to be made that Yahoo originally needed more of a financial wizard than a product ace at the helm, but that's all water under the bridge. There has been a lot of speculation over whether or not Mayer will keep her job, but it's hard to imagine the board dumps her if it actively pursues a sale. Let the buyer decide who they want to run things. Promoting a board member to something like executive chair, on the other hand...

Parts vs. whole: Avista Capital Partners is making a major structural change, according to multiple people familiar with the situation. The New York-based mid-market private equity firm plans to raise its fourth flagship fund early next year without an energy component, which has been a feature of past flagship funds. The energy team will attempt to raise its own vehicle, also under the Avista brand.

The official line to LPs is that such a move will provide greater investment discretion (i.e., some LPs aren't fond of energy), but the reality is that oil price depression and other factors have caused the energy piece of Avista's $1.4 billion third fund to drag down IRR. And given that the firm came up well short of its target last time around, it only makes sense to make Fund IV as attractive as possible.

No comment from Avista, natch.

 From the mouths of unicorns: Yesterday I attended a Boston College luncheon that featured a Q&A with Uber CEO Travis Kalanick. No talk of IPOs or other financials, but three items of note:

(1) He said that 13% of all San Francisco residents over 18 years-old use Uber at least once per month. When I mentioned this on Twitter, no one believed him -- but there was stark disagreement on whether the 13% was too high or too low. (2) Kalanick said that around 10% of Uber's global rides are for UberPool (which is available in the U.S.) and UberCommute (which is currently in China, but coming Stateside soon). (3) When asked about autonomous cars, he said: "The question for Uber is if we want to be part of the future, or if we want to resist it."

 Live from SF: Fortune's Most Powerful Women "Next Gen" conference is underway in San Francisco, with the program picking back up this morning at 8:50am PT.

Speakers you can view via our livestream will include Kat Cole (Focus Brands), Selina Tobaccowala (SurveyMonkey), Marne Levine (Instagram), Meredith Perry (uBeam), Jess Lee (Polyvore), Austin Geidt (Uber) and Susan Wojcicki (YouTube). You can check out both the livestream and yesterday's clips by going to


 Peloton, an at-home fitness solution for live and on-demand indoor cycling classes, has raised $75 million in growth equity funding from Catterton Partners. Earlier this year the company raised $30 million in Series C funding co-led by True Ventures and Tiger Global.


 ORIC Pharmaceuticals, a South San Francisco-based developer of drugs that target treatment-resistant cancers, has raised $53 million in Series B funding. Backers include The Column Group, Topspin Partners, OrbiMed Advisors, EcoR1 Capital, Foresite Capital and KKR.

 Evariant, a Farmington, Conn.-based CRM platform for healthcare providers, has raised $42.3 million in Series C funding. Goldman Sachs led the round, and was joined by return backers Health Enterprise Partners and Lightspeed Venture Partners.

 Kesios Therapeutics Ltd., a London-based developer of therapeutics for the treatment of multiple myeloma and other cancers, has raised £19 million ($28.5m) in Series A funding. Backers include Imperial Innovations Group PLC, SV Life Sciences and Abingworth.

 Netsertive, a Morrisville, N.C.-based marketing intelligence platform, has raised $24 million in Series C funding. River Cities Capital Funds led the round, and was joined by Babson Capital Management and return backers RRE Ventures and Greycroft Partners.

 Bluecore, a New York-based provider data marketing automation platform for e-commerce, has raised $21 million in Series B funding. Georgian Partners led the round, and was joined by return backers FirstMark Capital and Felicis Ventures.

 Cellwize, a Singapore-based provider of self-organizing network (SON) solutions, has raised $14.5 million in Series A funding. Carmel Ventures and Vintage Investment Partners co-led the round. In addition, Viola Credit provided a $10 million credit facility.

 ThreatQuotient, a Sterling, Va.-based threat intelligence platform, has raised $10.2 million in Series A funding. New Enterprise Associates led the round, and was joined by return backers Blu Venture Investors and the Center for Innovative Technology.

 Sensoro, a Seattle-based maker of iBeacon sensors, has raised $10 million in new VC funding from Nokia Growth Partners, New World Development Company Ltd. and Mandra Capital.

 Remedy Pharmaceuticals, a New York-based developer of drugs to treat acute CNS disorders, has raised $9 million in VC funding. New investors included The Vertical Group.

 Clearpool Group, a New York-based provider of electronic trading software development and agency execution services, has raised $8 million in growth equity funding from Edison Partners.

 Osaro, a San Francisco-based deep reinforcement learning startup, has raised $3.3 million in seed funding from AME Cloud Ventures, Peter Thiel and Scott Banister. Read more.

 Lufax, a Chinese peer-to-peer lender, is seeking to raise around $1 billion in new equity funding at a valuation of between $15 billion and $20 billion, according to Bloomberg. Read more.


 ABRY Partners has acquired Direct Travel, a Centennial, Colo.-based provider of corporate travel management services, from Silver Oak Services Partners. No financial terms were disclosed.

 CVC Capital Partners has acquired The Carlyle Group’s stake in British roadside assistance company RAC, at a £2.2 billion enterprise value.  Singapore sovereign wealth fund GIC, which acquired nearly half of RAC last year from Carlyle, will retain its minority position. Read more.

 GHO Capital has acquired Quotient Clinical, a UK-based provider of outsourced, early-stage drug development services to the pharma industry, from Bridgepoint Development Capital. No financial terms were disclosed.

 KKR, Thoma Bravo and Vista Equity Partners "are competing for $4 billion worth of Dell Inc.'s assets," according to Reuters. Read more.

 Marlin Equity Partners has acquired LiveOps, a Redwood City-based provider of cloud contact center and customer service solutions. No financial terms were disclosed. Existing LiveOps investor Presidio Partners participated alongside Marlin, while sellers included Benchmark. The acquisition did not include LiveOps Agent Services, which formally split from the company last year.

 ParkerGale Capital has acquired OnePlus Corp., a Northbrook, Ill.-based provider of waste compactor automated monitoring systems. No financial terms were disclosed.

 Riveria Investment Group and Gibson Investment Group have acquired IQ Logic, an Irvine, Calif.-based provider of managed content and document services. No financial terms were disclosed.

 Voith, a privately-held German company, is receiving private equity interest in its industrial services business, which could be valued at around €350 million, according to Reuters. Final bids are expected before year-end from DBAG, Triton, Sun Capital Partners and Rhone Capital. Read more.


 Woodside Homes Inc., a North Salt Lake, Utah-based residential homebuilder, has withdrawn registration for a $200 million IPO (originally filed in June 2014). It had planned to trade on the NYSE, with Credit Suisse, J.P. Morgan and Deutsche Bank Securities serving as lead underwriters. Shareholders include Oaktree Capital Management, Stonehill Institutional Partners and John Hancock Life Insurance Co.


 Mobeus Equity Partners has sold Tessella, a UK-based provider of analytics software and consulting, to Altran Technologies (Paris: ALT) for an undisclosed amount.

 Perion Network Ltd. (Nasdaq: PERI) has acquired Undertone, a New York-based provider of cross-screen advertising solutions, for $180 million. Sellers include JMI Equity.


 Grupo BTG Pactual SA is in talks to sell a control stake in Brazilian parking lot company Allpark for around $390 million, according to Bloomberg. Read more.


 Autodesk (Nasdaq: ADSK) has launched a $100 million venture capital fund to support its new cloud-based product development platform. Read more.

 AutoTech Ventures, a transportation-focused VC firm, is raising upwards of $150 million for its debut fund, according to a regulatory filing.

 SOIL Funds has launched as a New York-based asset management group focused on investing in sustainable businesses and infrastructure with an emphasis on private equity and credit. It is led by David Waserstein, former interim CEO of Prism Solar Technologies and a onetime partner with I2BF Global Ventures.


 Greg Bassuk has joined Franklin Square Capital Partners as a managing director and head of liquid alternative strategies. He previously was COO at IndexIQ (acquired by New York Life Investment Management).

 Andrew Newington has joined private equity firm Actis as chief operating officer. He previously was a managing partner at BC Partners.

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