Yesterday we discussed Acerta Pharma, the Dutch blood cancer startup that agreed to be acquired by AstraZeneca for upwards of $7 billion (including a $3b option), which easily makes it the largest VC-backed M&A exit since Facebook purchased WhatsApp in early 2014.
Acerta Pharma itself isn't commenting on the deal, retaining the same stealth stance that it has taken since its 2012 founding (for example, it's sparse website makes Benchmark's feel like Wikipedia). But I did speak to several people with knowledge of the company, and learned some additional information:
Funding: It has been reported that Acerta raised a $14 million Series A round in late 2013 from OrbiMed, Frazier Healthcare Ventures and BioGeneration Ventures and BOM Capital. This is true, but it was only a first tranche. The overall round was around $175 million (although one source suggests it was closer to $130 million) at a pre-money valuation below $50 million. Then, this past May, the company quietly raised another $375 million at a multi-billion dollar valuation. New investors included T. Rowe Price. Quogue Capital also was involved, but it's unclear if it was a return investor. The company has only spent around half of the capital it raised (i.e., $250m still in the bank).
Sale: The upfront payment includes $2.5 billion up-front and another $1.5 billion due by the end of 2018 or once Acerta's lead candidate receives regulatory approval (whichever comes first). The second piece is guaranteed. Even if AstraZeneca shut down Acerta's entire program after the deal closes (in Q1 2016), it would still owe the $1.5 billion. The $3 billion call option is dependent on both regulatory and commercial milestones, but it also is married with an unspecified put option.
Secrecy: Acerta Pharma was intent on remaining as stealthy as possible, in order to keep both its process and progress secret from the pharma company — Pharmacyclics, a unit of AbbVie — whose product wants to disrupt. The company didn't really make itself known until just last week, when it published data in the New England Journal of Medicine, showing strong Phase I/II results for patients suffering from relapsed chronic lymphocytic leukemia (the goal with AstraZeneca is to launch clinical trials for all sorts of blood cancers and, eventually to expand into solid tumors). Overall, Acerta has enrolled around 1,000 patients in its studies.
Impact: Over the past few years, a large number of generalist venture capital firms have moved away from healthcare investing. And, even among those that have remained, there has been a reluctance to back pharma companies, due to the capital intensity and regulatory risks. This is just one deal, but I do have to wonder if it will help cause certain firms to reconsider. Particularly when you also add on the recent pharma M&A boom, which will result in lots of available talent and larger companies in search of new ways to move the needle.
• Done and done: Kohlberg Kravis Roberts & Co. yesterday filed some SEC docs showing that it has secured $3.65 billion in capital commitments for its fourth European fund. A firm spokeswoman says that it represents a final close.
• Survey says: Placement agent Probitas Partners recently surveyed 104 limited partners -- 47% of which are U.S.-based -- to gauge fundraising trends.
Among the more interesting findings: (a) Only 27% of LPs are exploring new manager relationships, which is just one point higher than last year's survey results; (b) Interest in energy funds has dropped form 31% to just 20%; (c) The most-desired fund class is U.S. middle market buyout with 76%, trailed at some length by U.S. small-cap buyouts at 46%. U.S. venture capital doesn't show up until 7th place with 30% -- despite the unicorn trend -- and European/Israeli venture capital barely makes the list with just 5% interest.
It also is worth adding the Probitas reports global private equity overhang has reached an all-time high of $1.3 trillion.
• Backed into a corner: Sheldon Adelson yesterday acknowledged that he was behind the $140 million purchase of the Las Vegas Review-Tribune, as first reported by Fortune, claiming that he never meant for it to be a permanent secret. Read more.
• Oops: Yesterday's Term Sheet contained what had to be the most unfortunate -- an unintentionally hilarious -- typo since launch. And my inbox (and Twitter feed) was full of amusing snark, particularly those who didn't feel such services can be legally offered in Westport, Connecticut. As I've often said, you are the best readers a writer could have...
• Publishing reminder: Term Sheet will publish through next Thursday, and then be off through the rest of 2015.
• Have a great weekend... Happy birthday WAP. Go Pats!
THE BIG DEAL
• SecureWorks, an Atlanta-based cybersecurity unit of Dell Inc., has filed for a $100 million IPO. It plans to trade on the Nasdaq under ticker symbol SCWX, with BofA Merrill Lynch listed as left lead underwriter.
The company reports a $57.5 million net loss on $245 million in revenue for the first nine months of 2015, compared to a $29.5 million net loss on $191 million in revenue for the year-earlier period. Read more.
VENTURE CAPITAL DEALS
• Navitor Pharmaceuticals Inc., a Cambridge, Mass.-based developer of medicines targeting the activation of mTORC1, has raised $33 million in Series B funding. Brace Pharma Capital (an investment arm of Brazil’s EMS) led the round, and was joined by Remeditex Ventures, Sanofi-Genzyme BioVentures and return backers Polaris Partners, Atlas Venture, Johnson & Johnson Innovation and SR One Ltd. www.navitorpharma.com
• Rivigo, an Indian transportation logistics startup focused on driver safety, has raised $30 million in Series B equity and debt funding led by SAIF Partners. Read more.
• WellDoc, a Baltimore-based maker of a diabetes management app, has raised $22 million in Series B funding. Samsung Ventures led the round, and was joined by Merck Global Health Innovation Fund, Adage Capital Management, Excel Venture Management,Alexandria Venture Investments and Hudson River Capital Partners. Read more.
• mParticle, a New York-based mobile data platform, has raised $15 million in new VC funding, according to a regulatory filing. Existing backers include Battery Ventures, Harbinger Capital, Bowery Capital, Google Ventures and Greylock Partners. www.mparticle.com
• Altheer, a Mountain View, Calif.-based augmented reality computing platform, has raised $14 million in Series B funding. Signatures Capital and Streamlined Ventures co-led the round, and were joined by return backers Fang Group, Shanda Group, FundersClub and RONA Holdings. www.atheerair.com
• DealCloud, a Charlotte-based SaaS platform for business development, has raised $5.3 million in new VC funding. Cultivation Capital led the round, and was joined by Hamilton Lane, Holton Capital Group and individual angels. www.dealcloud.com
• Soft Robotics Inc., a Cambridge, Mass.-based startup focused on robotic manipulation and material handling, has raised $4.45 million in Series A funding. Material Impact Fund led the investment, and was joined by Haiyin Capital and Taylor Ventures. It is unclear how much of the $5 million was raised. www.softroboticsinc.com
• Fresvii, a Redwood City, Calif.-based maker of a cloud-based social engagement tool, has raised $4 million in VC funding led by existing backer Nissay Capital (Japan). www.fresvii.com
• UploadVR, a San Francisco-based website devoted to virtual reality information and content, has raised $1.25 million in seed funding led by China’s Shanda Group. www.uploadvr.com
• Funnely, a San Francisco-based SaaS automation platform for Facebook and Instagram marketing, has raised $988,000 in seed funding. Verizon Ventures led the round, and was joined by 500 Startups, MITS Fund and Pallasite Ventures. www.funne.ly
• Infinity Wireless Ltd., a British data recovery startup, has raised £500,000 in seed funding. Mangrove Capital Partners led the round, and was joined by return backer Boundary Capital Partners. www.enigma-recovery.com
PRIVATE EQUITY DEALS
• Apollo Global Management is in “advanced talks” to acquire Maxim Crane Works LP, a Bridgeville, Penn.-based lift equipment maker currently owned by Platinum Equity, according to Reuters. A deal could be valued at more than $1 billion. Read more.
• Bridgepoint has acquired Element Materials Technology, a UK-based lab-testing company, from 3i Group for around £186 million. www.element.com
• The Carlyle Group has agreed to acquire a majority stake in Saverglass, a French glass packaging manufacturer, from Astorg Partners. No financial terms were disclosed. www.carlyle.com
• Encore Consumer Capital has acquired LORAC Cosmetics, a Valencia, Calif.-based “prestige color cosmetics brand.” No financial terms were disclosed.
• Recovery Centers of America, a King of Prussia, Penn.-based addiction treatment and behavioral health company, has raised $231.5 million in equity funding from Deerfield Management Company. www.recoverycentersofamerica.com
• Gelesis, a Boston-based developer of therapies for weight loss and glycemic control in overweight and obese patients, withdrawn registration for an IPO that was designed to raise upwards of $56 million. It had planned to trade on the Nasdaq, with Piper Jaffray, Stifel and Guggenheim Securities serving as lead underwriters. Shareholders include PureTech Ventures (28.59% pre-IPO stake), Invesco (12.4%) and Hercules Technology Ventures (6.91%). www.gelesis.com
• Gladstone Investment Corp. (Nasdaq: GAIN) and Capitala Finance Corp. (Nasdaq: CPTA) have acquired Nth Degree Inc., a Duluth, Ga.-based corporate event marketing and management services company, from GenCap America. No financial terms were disclosed. www.nthdegree.com
• Ligand Pharmaceuticals (Nasdaq: LGND) has agreed to acquire OMT Inc., a Palo Alto, Calif.-based company antibody platform based on the genetic engineering of animals, for approximately $178 million in cash and stock. Sellers include Essex Woodlands Health Ventures. www.openmonoclonaltechnology.com
• Trinity Hunt Partners has completed its previously-announced $175 million sale of Starplex Cinemas, a Dallas-based movie theater company with 33 locations in 12 states, to AMC Entertainment Holdings Inc. (NYSE: AMC). www.starplexcinemas.com
• CACI International Inc. (NYSE: CACI) has “emerged as the top contender” for Lockheed Martin’s (NYSE: LMT) government IT business, according to Reuters. Read more.
• GlaxoSmithKline (LSE: GSK) has agreed to acquire the HIV assets of Bristol-Myers Squibb (NYSE: BMY) -- both late-stage R&D and a portfolio of preclinical and discovery-stage research assets -- for upwards of $1.46 billion (including $350m upfront). Read more.
• Zurich Insurance Group has agreed to acquire Rural Community Insurance Services, an Anoka, Minn.-based provider of crop insurance products, from Wells Fargo (NYSE: WF) for upwards of $1.05 billion ($675m upfront). Read more.
FIRMS & FUNDS
• Canvas Ventures is raising upwards of $250 million for its new fund, according to a regulatory filing. www.canvas.vc
• Gamut Capital Management, a private equity firm launched by Stan Parker (ex-senior partner with Apollo Global Management), is raising upwards of $750 million for its debut fund, according to a regulatory filing. Other Gamut staffers include Athos Zakou (Tiger Global Management) and Sanjina Choudhury (GoldenTree Asset Management).
• Gen Cap America, a Nashville, Tenn.-based private equity firm, is raising up to $225 million for its seventh fund, according to a regulatory filing. www.gencapamerica.com
• Goode Partners, a New York-based private equity firm focused on consumer companies, has secured $200 million for its third fund, according to a regulatory filing. It is targeting upwards of $300 million. www.goodepartners.com
• KKR has secured $3.65 billion in capital commitments for its fourth European fund, according to a regulatory filing. www.kkr.com
• Searchlight Capital Partners, a London-based private equity firm, has closed its second fund with over $1.9 billion in capital commitments. Park Hill Group served as placement agent. www.searchlightcap.com
Moving In, On & Up
• Accel has promoted London-based Philippe Botteri to general partner. The VC firm also has promoted Luciana Lixandru to principal, Seth Pierrepont to vice president and hired Pia d’Iribarne (ex-Felix Capital) as an associate. www.accel.com
• Simon Cooper has been named CEO of corporate and institutional banking at Standard Chartered, effective in April 2016. He has been serving as HSBC’s CEO of corporate banking. Read more.
• William Kilmer, former chairman and CEO of Public Engines (acquired earlier this year by Motorola Solutions), has joined Mercato Partners as an operating partner. www.mercatopartners.com
• Deirdre Cunnane has joined Catabasis Pharmaceuticals (Nasdaq: CATB) as senior VP and general counsel. She previously was general counsel for Advanced Technology Ventures, which had been an early investor in Catabasis. www.catabasispharma.com
• Nestor Paz Galindo reportedly has agreed to join UBS as head of “exclusive sell-side and financial sponsors M&A” for the EMEA region, effective in March 2016. He previously was with J.P. Morgan. www.ubs.com
• Pantheon has promoted three of its professionals to partner: Ralph Guenther (European client services), Graeme Keenan (chief risk officer) and Alex Scott (European primary investments). www.pantheon.com
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