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Term Sheet — Monday, February 29

Random Ramblings

A bunch of notes to kick off your Leap Day:

• Fee law: A bill has been introduced in California to address the so-called “secret fees” charged by private equity funds to their limited partners. The sponsor is Ken Cooley (D-8th District), and it would require all public pension funds to mandate detailed disclosures from their GPs about all fees and carried interest charged to the fund by both the partnership itself and its underlying portfolio companies.

My gut take is that while LPs should certainly have robust fee information from their GPs, the move to codify it via legislation suggests a massive lack of trust by Assemblyman Cooley in the pension system fiduciaries who already should be demanding such data. It also will be interesting to see if this bill gets any legs because, if so, then we could see similar versions in other states with significant private equity holdings.

You can read the proposed bill by going here. Cooley did not return a request for comment.

• In-flight snacks: Last fall, membership-based private aviation company Wheels Up announced that it had raised “up to $115 million” in new VC funding from T. Rowe Price, Fidelity and NEA. A lot of the subsequent news coverage, however, left out the “up to” part.

At the time, Wheels Up had only closed on $66 million. It recently closed out the round at $96.6 million, which gives the New York-based company (and Term Sheet sponsor) a post-money valuation of $521.6 million.

Wheels Up co-founder and CEO Kenny Dichter tells me that the company is currently on a $250 million revenue run rate, and believes it could hit $1 billion on its top-line by 2019-2020.

• Look what we found: E-commerce upstart last week announced that it had acquired Hayneedle, an Omaha, Neb.-based online retailer focused on the home goods market. No financial terms were disclosed, but a source familiar with the transaction tells me that it came in just shy of $100 million in cash (pending certain working capital adjustments).

Hayneedle, which never was over to overtake rival Wayfair, had raised an undisclosed amount of funding from Insight Venture Partners and Sequoia Capital.

• From the filings: Joe Lonsdale’s new venture capital firm, Eight Partners, is planning to raise upwards of $420 million for its debut fund, according to a Form D filing. (2) Yahoo made only two acquisitions on 2015, per its new 10-K.

• Unicorn horns on sale: Fidelity Investments has once again broken out the red pen for many of its privately-held portfolio companies, according to a Fortune analysis of new valuation reports for three of its mutual funds. Among those getting marked down were Blue Apron, Dropbox and Zenefits (before firing its CEO, btw). Also notable were a bunch of biotech markdowns, which is not something we’d seen in past Fidelity reports. You can get our full write-up by going here.


• Souq, a UAE-based e-commerce marketplace (a.k.a. the Middle East’s Amazon), has raised $275 million at a reported valuation of around $1 billion.

New investors Standard Chartered Private Equity, the International Finance Corp. and Baillie Gifford were joined by return backers like Tiger Global and Naspers. Read more.


• Health Catalyst, a Salt Lake City-based provider of healthcare data warehousing and analytics solutions, has raised $70 million in Series E funding. Norwest Venture Partners and UPMC co-led the round, and were joined by MultiCare Health System, OSF Healthcare, Leerink Capital and return backers Sequoia Capital, Sands Capital, Kaiser Permanente Ventures, CHV Capital, Partners HealthCare, EPIC Venture Partners, Leavitt Equity Partners and Tenaya Capital

• MedCPU, a New York-based provider of enterprise clinical decision support solutions, has raised $35 million in third-round funding. UPMC led the round, and was joined by return backer Merck Global Health Innovation Fund.

• Kika Tech, a Sunnyvale, Calif.-based Android keyboard app, has raised $30.6 million in Series B funding. Backers include Honge Capital, Bole Zongheng and Zhu Ye.

• Enlighted Inc., a Sunnyvale, Calif.-based provider of IoT solutions for commercial buildings, has raised $25 million in Series D funding. Tao Capital Partners was joined by return backers Kleiner Perkins Caufield & Byers, RockPort Capital Partners and DFJ.

• AppCard, a New York-based marketing and loyalty program for small and mid-sized retailers, has raised $20 million in Series B funding. PLDT Capital (venture arm of of Philippine Long Distance Telephone Co.) and Alexander Rittweger (founder of Loyalty Partners) co-led the round, and were joined by return backers Founders Fund, Innovation Endeavors and Jerry Yang.

• Hopscotch, an Indian-based e-commerce company focused on new mothers, has raised $13 million in Series C funding led by Eduardo Saverin. Read more.

• Terbium Labs, a Baltimore-based developer of dark web data analysis and recovery software, has raised $6.4 million in Series A funding led by .406 Ventures. Read more.


• AE Industrial Partners has acquired The Aircraft Group, a Phoenix-based provider of aircraft consulting services for fleet asset management and the purchase, sale or leasing of commercial aircraft. No financial terms were disclosed.

• Belcan LLC, a Cincinnati-based portfolio company of AE Industrial Partners, has acquired East Kilbride Engineering Services, a Germany-based engineering consultancy founded in 1996 by former Rolls-Royce aero engineers. No financial terms were disclosed.

• EviCore Healthcare, a Bluffton, S.C.-based benefits management company, has acquired QPID Health, a Boston-based provider of clinical intelligence to healthcare providers. No financial terms were disclosed. EviCore backers include General Atlantic and TA Associates. QPID Health has raised over $16 million in VC funding from firms like Matrix Partners, New Leaf Venture Partners, Partners Innovation Fund and Cardinal Partners.

• J.F. Lehman & Co. has agreed to acquire API Technologies Corp. (Nasdaq: ATNY), an Orlando, Fla.-based provider of RF, microwave, microelectronics and security technologies. The deal is valued at around $111 million, or $2 per share (99% premium to Friday’s closing price).

• MNX Global Logistics, an Irvine, Calif.-based portfolio company of The Riverside Co., has acquired Aero Express Logistics, a Singapore-based provider of logistics to the aerospace maintenance, repair and overhaul market. No financial terms were disclosed.

• NRD Capital Management has acquired a majority stake in Fuzzy’s Taco Shop, a Fort Worth, Texas-based quick-serve restaurant chain with 90 units. No financial terms were disclosed.


• Yodle Inc., a New York-based provider of online marketing solutions to local merchants, has withdrawn registration for a $75 million IPO. The move comes after Yodle agreed to be acquire by (Nasdaq: WEB) for $342 million in cash.


• BB&T Corp. (NYSE: BBT) has agreed to acquire Swett & Crawford, an Atlanta-based wholesale insurance brokerage, from Cooper Gay Swett & Crawford for $500 million in cash. Cooper Gay Swett is a London-based portfolio company of firms like Lightyear Capital and Canada’s Public Sector Pension Investment Board. Read more.

• Kohlberg & Co. and PPG Industries (NYSE: PPG) have agreed to sell Pittsburgh Glass Works to LKQ Corp. (Nasdaq: LKQ) at an enterprise value of $635 million. Kohlberg & Co. acquired a majority stake in the auto glass business from PPG in 2008. Read more.


• Consol Energy Inc. (NYSE: CNX) has agreed to sell its Buchanan Mine in southwestern Virginia and certain other metallurgical coal reserves to an affiliate of Energy and Minerals Group for $420 million (including $398m in upfront cash).

• Wanda Cinema Line Co. reportedly is among the expected bidders for Mars Entertainment Group, Turkey’s largest movie theater chain. Private equity firms also are expected to have interest in the company, which could be valued at around $800 million. Read more.



• Advancit Capital, an early-stage VC firm whose partners include Shari Redstone, is raising up to $40 million for its third fund, according to a regulatory filing.

• Nokia Growth Partners has raised $350 million for a new fund focused on Internet of Things companies.

• Tribecca Venture Partners, a New York-based VC firm focused on early-stage consumer and enterprise tech companies, has closed its second fund with $107 million in capital commitments.


• KKR said that Scott Bookmyer, COO of KKR Asia, will take over direct responsibility for KKR Australia, effective July 1.

• Steven Skaar, a former Citigroup real estate banker who most recently was with Brookfield Property Partners, has joined Centerbridge Partners as a managing director and head of European real estate. Read more.

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