Random Ramblings
Yesterday I laid odds on who would buy Yahoo, suggesting that Verizon is the most likely acquirer, with Time Inc. placing a distant second. But here's an interesting nugget I learned after publishing: Within the past two years, Yahoo actually did some preliminary due diligence on buying Time Inc. And, more specifically, on buying Fortune (with plans to merge it into Yahoo Finance). It went far enough that Yahoo got financial data on Fortune, but nothing ultimately came of it.
Two more Yahoo notes:
1. Actual bids, if they materialize, won't come at least for the next several weeks. The data room, for example, is not yet open.
2. When Marissa Mayer was named CEO in July 2012, there was a thesis that she had taken a can't lose job. If she managed to turn Yahoo around, then she'd be hailed as a genius. If Yahoo continued to sink... well, it's hard to blame someone parachuting onto the Titanic after it rendezvoused with that iceberg. Nearly four years later, however, that wisdom was clearly faulty. Mayer's reputation has taken a massive hit.
• Tough timing: There are new reports out about a looming bankruptcy for The Sports Authority, a big-box sporting goods retailer that Leonard Green & Partners took private in 2006 for around $1.3 billion. At the same time, Leonard Green yesterday filed documents with the SEC that show it is actively raising its seventh flagship fund (no target listed, but earlier media coverage suggested $8.5b). Not terribly good timing, although the Los Angeles-based firm's overall performance should win the day. Here are some IRRs through Q3 2015, per the Oregon State Treasury (its active fund, VI, is too young to have listed data):
Fund III: 21.26%
Fund IV: 11.2%
Fund V: 18%
• That didn't last long: Andrea Saul is no longer with Instacart, which she had joined last May as VP of communications. Prior to signing onto the unicorn grocery delivery startup, Saul had led comms for Sheryl Sandberg's LeanIn nonprofit, and also served as press secretary for Mitt Romney's 2012 presidential campaign. No word yet on her future plans.
• Round Rock reticence: There is an argument here in Massachusetts that our decades-long lack of mega tech wins has been codified by local enforceability of non-compete agreements. It's something that has been fought loudly by local VCs and even our last governor, but their efforts to make the Bay State more Valley-like have repeatedly failed. And when it comes to pointing fingers, most of them end up in the direction of EMC and Boston Scientific.
What we still don't know, however, is how Dell's buyout of EMC will effect the storage giant's backwards public policy position. I reached out to Dell yesterday, but it declined comment. We also don't yet know where new tenant General Electric will land on the issue...
• Headline risk: Lots of stories this morning about how Citigroup has become increasingly concerned about a global recession. Pretty scary, although it's worth emphasizing that the Citi definition of a global recession is growth below 2% (as opposed to, you know, actual economic deterioration). Moreover, Citi is still forecasting global growth at between 2.2% and 2.5% this year (depending on the accuracy of Chinese economic data).
• Unconventional wisdom: The Boston Consulting Group this morning released a new report on shareholder activism in Silicon Valley. Here’s the big takeaway from BCG, which says tech is the sector most often targeted by activists:
"Contrary to popular perception, activism in Silicon Valley has, in fact, been associated with generally positive shareholder value creation, at least in the short term. Companies on average suffered 'total shareholder return] declines prior to an activist event and enjoyed 36% cumulative TSR during the activists' involvement. Moreover, the interventions continued to generate shareholder value for two years after the activists exited, and often beyond that."
THE BIG DEAL
• Energy Capital Partners has teamed with Dynegy Inc. (NYSE: DYN) to acquire the U.S. power plants of France’s Engie SA (Paris: ENGIE). The deal is valued at around $3.3 billion. In related news, Engie has agreed to sell its portfolio of hydroelectric assets in New England for $1.2 billion to The Public Sector Pension Investment Board. Read more.
VENTURE CAPITAL DEALS
• Didi Kuaidi, a Chinese ride-hailing company, is planning to raise $1 billion in new funding at a valuation in excess of $20 billion, according to the WSJ. Read more.
• ThousandEyes, a San Francisco-based provider of networking monitoring tools for developers, has raised $35 million in new VC funding. Tenaya Capital led the round, and was joined by Google Ventures and return backers Salesforce Ventures, Sequoia Capital and Sutter Hill Ventures. Read more.
• Parkifi, a Denver-based provider of real-time, sport-level parking data, has raised $9.5 million in Series A funding co-led by Crosslink Capital and Grotech Ventures. www.parkifi.com
• EnSilo, an Israeli cybersecurity startup, has raised $9 million in new Series A funding (bringing the round total to $19 million). Rembrandt Venture Partners led the new tranche, and was joined by return backers Carmel Ventures and Lightspeed Venture Partners. www.ensilio.com
• Salesmanago, a Poland-based provider of cloud marketing automation solutions, has raised $6 million from 3TS Capital Partners. www.salesmanago.com
• User Replay, a UK-based developer of customer experience management software in the cloud, has raised $4.7 million in new VC funding. Longwall Ventures was joined by return backers Episode 1 Ventures, EC1 Capital and FSE. www.userreplay.com
• Captain401, a San Francisco-based startup that helps small businesses set up retirement savings plans for employees, has raised $3.5 million in seed funding. Backers include SoftTechVC, SV Angel, CrunchFund, YCombinator, Slow Ventures, Susa Ventures and FundersClub. www.captain401.com
• WigWag, an Austin, Texas-based open source platform company for IoT, has raised nearly $3.2 million in seed funding led by CSC Venture Capital. www.wigwag.com
• DBmaestro, a Bellaire, Texas-based provider of database development technologies, has raised $3 million in Series A funding from StageOne Ventures, lool Ventures and iAngels. www.dbmaestro.com
• Overnight, an app for booking last-minute accommodations, has raised $2.5 million in seed funding co-led by Accomplice and CrossCut Ventures. Read more.
• SOCi Inc., a San Diego-based social media content discovery and marketing startup, has raised $2.25 million from GrowthX and individual angels. www.meetsoci.com
• REVL, a San Francisco-based smart action camera developer, has raised $2 million in seed funding. Bill Tai led the round, and was joined by Y Combinator, Frog Ventures, James Lindenbaum and Lars Rasmussen. www.revl.xyz
PRIVATE EQUITY DEALS
• Frontier Strategy Group, a Washington, D.C.-based business consultancy, has raised an undisclosed amount of equity funding from Boathouse Capital. www.frontierstrategygroup.com
• Sheridan Capital Partners has acquired Europa Sports Products, a Charlotte, N.C.-based wholesale distributor of sports and fitness supplements. No financial terms were disclosed. Sheridan plans to merge ESP with existing portfolio company Lone Star Distribution, which is based in Dallas. www.sheridancp.com
• TopSail Energy LP, a Dallas-based acquirer and developer of refined products logistics and processing assets in North America, has launched with a $100 million initial equity commitment from Tailwater Capital. TopSail is led by former Kinder Morgan executive Jim Lelio. www.topsailenergy.com
• Vance Street Capital has acquired A&E Medical Corp., a Farmingdale, N.J.-based designer and contract manufacturer of single-use cardiovascular products. www.aemedical.com
IPOs
• No IPO news this morning.
EXITS
• Industrial Opportunity Partners has sold Roadtrek Motorhomes Inc., a Canada-based designer and manufacturer of Class B motorhomes, to Germany-based Erwin Hymer Group. No financial terms were disclosed. www.roadtrek.com
• Microsoft (Nasdaq: MSFT) has acquired Xamarin, a San Francisco-based cross-platform development platform for native apps. No financial terms were disclosed. Xamarin had raised over $80 million in VC funding from firms like Ignition Partners, Lead Edge Capital, Insight Venture Partners, Floodgate and Charles River Ventures. Read more.
OTHER DEALS
• Foxconn (Taiwan: 2354) has postponed a formal takeover offer for Japanese electronics maker Sharp Corp. (Tokyo: 6753), “after receiving new material information from Sharp.” Foxconn last month had tentatively agreed to acquire Sharp for around $6.2 billion. Read more.
• Ibibo Group, an Indian online travel company, has raised $250 million in new equity funding from majority shareholder Naspers Group. Read more.
• Peloton Document Solutions, a Santa Monica, Calif.-based provider of rich media and interactive communications solutions for the financial services industry, has secured an undisclosed amount of strategic funding from R.R. Donnelley & Sons (Nasdaq: RRD). www.pelotondocs.com
FIRMS & FUNDS
• Alliance Consumer Growth has closed its third fund with $210 million in capital commitments. www.acginvestors.com
• Mainsail Partners, a San Francisco-based growth equity firm focused on bootstrapped companies, has closed its fourth fund with $384 million in capital commitments. www.mainsailpartners.com
• Sunrise Strategic Partners has launched as a Boulder, Colo.-based provider of growth capital and advisory services to brands in the healthy, active and sustainable living spaces. It is led by Steve Hughes (founder and ex-CEO of Boulder Brands) and backed by Trilantic Capital Partners. www.sunrisestrategicpartners.com
MOVING IN, ON & UP
• Martin Casado is stepping down as head of VMWare’s networking and security business to join Andreessen Horowitz as a general partner. He had co-founded original Andreessen Horowitz portfolio company Nicira, which was later acquired by VMWare for $1.26 billion. Read more.
• Vivek Mathew has joined Antares Capital as a managing director and head of structured products. He previously was a managing director and head of global primary CLOs with J.P. Morgan. www.antares.com
• Peter Orszag has agreed to join Lazard as a managing director and vice chairman of investment banking. He previously worked in a similar position with Citigroup and, before that, was President Obama’s first director of the Office of Management and Budget. Read more.
• Matthew Westerman has agreed to join HSBC as co-head of a new global banking division. He previously chaired EMEA investment banking at Goldman Sachs. Read more.
• Laila Worrell has joined The Boston Consulting Group as a partner and managing director in its principal investors and private equity practice. She previously was a managing director with Accenture. www.bcg.com
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