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Term Sheet — Friday, April 15

Random Ramblings

Apologies for the late delivery, but Erin and I were doing last-minute work on a piece about the Yahoo sale process that you can read by going here.

In short, don’t believe everything you read about dozens of possible bidders. Relatively few have actually signed nondisclosure agreements and some anticipated suitors ― such as Softbank ― don’t plan to push paper. Moreover, those who remain involved report that the process has been, as one private equity executive put it, “a f–king joke.”

All of that said, I stick with my original assessment that this is Verizon’s deal to lose, but that I also wouldn’t be surprised if no deal is ultimately consummated.

• Driver’s seat: Last month we reported that General Motors had agreed to pay north of $1 billion in cash and stock to acquire Cruise, a San Francisco-based developer of autonomous vehicle technology. Now there is a legal question as to who stands to profit.

A mechanical engineer named Jeremy Guillory has sued the company and its CEO, Kyle Vogt, claiming he was a 50% co-founder of Cruise (and, thus, entitled to 50% of the GM largesse). Cruise and its allies have disputed Guillory’s claim ― basically saying that Guillory was just involved for a tiny period of time, before Cruise has accomplished anything ― and yesterday filed a counter-suit. It does not seem, however, that any of this will necessarily hold up GM’s purchase.

• Data dispute: The WSJ yesterday got attention for a story titled “Startup Investors Hit the Brakes,” based on Q1 deal data from VentureSource. Namely, the figures showed a 25% decline in VC disbursements to U.S. companies between Q4 2015 and Q1 21016 (which came in at $13.9 billion).

This morning, MoneyTree released its own data, showing a slight uptick in deal dollars (from $12 billion to $12.1 billion), alongside a 5% drop in number of deals.

I’m not yet sure why the two groups show such a discrepancy,  particularly given that both now include corporate VC groups, although MoneyTree excludes direct corporate investments (i.e., from Google Inc. vs. Google Ventures), and I’m not certain how each provider treats crossover investors like hedge funds and mutual funds. One other issue is that certain very large deals were put into different time periods by the two groups. Lyft’s recent fundraise, for example, was listed as Q4 by VentureSource, but Q1 by MoneyTree.

• Game Time: We’ve got about a dozen players for our June 28 charity softball game at Fenway Park. Please email me ASAP if you want to play, as we’ve got to put our team together by next Friday. It costs $909 to participate, and you’re promised multiple at-bats, multiple innings in the field, etc. Plus, friends and family can come watch (and eat).

Have a great weekend… Happy birthday M, my (literal) girl next door growing up and current private equity partner (and to think, I still remember celebrating your 5th…).

THE BIG DEAL

• The Carlyle Group is in advanced talks to acquire a package of oilfield services businesses from Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI), according to the WSJ. The deal could be valued at more than $7 billion, and is designed to help the two sellers overcome U.S. regulator opposition to their planned merger. There had been prior talk that Halliburton and Baker Hughes were planning to sell the assets to General Electric (NYSE: GE). Read more.

VENTURE CAPITAL DEALS

• RigUp, an Austin, Texas-based online marketplace for oil rig projects, has raised $15 million in Series A funding. FreeS VC, Moore Capital and GE Ventures were joined by return backers Founders Fund, Box Group, and Great Oaks Venture Capital. Read more.

• TargEDys, a French developer of microbiome-based solutions for appetite regulation, has raised 5.8 million in new VC funding from Seventure Partners, NCI and Pontifax. www.targedys.com

• DigitalGenius, an AI-enabled customer service platform, has raised $4.1 million in new VC funding. BloombergBeta, NovelTmT, Salesforce Ventures, Singularity Investments and Spider Capital were joined by return backers Lerer-Hippeau Ventures, Lowercase Capital, Metamorphic Ventures and RRE Ventures. www.digitalgenius.com

• Yup (f.k.a. MathCrunch), a San Francisco-based mobile app that provides on-demand math tutoring, has raised $4 million in seed funding from StartX Fund and SOMA Capital. www.yup.com

• Impraise, a mobile app for streamlining annual performance reviews, has raised $1.6 million in seed funding from Palm Drive Ventures, China Growth Capital and HenQ. Read more.

• Shuddle, a San Francisco-based car service app aimed at families and senior citizens, is ceasing operations today. In an email to users the company said: “We worked hard to find the financial resources that would allow us to continue to grow, but ultimately could not raise the funding required to continue operations.” Shuddle had raised around $12 million in VC funding from RRE Ventures, Comcast Ventures, Forerunner Ventures and Accel Partners. Read more.

PRIVATE EQUITY DEALS

• Arsenal Capital Partners has acquired a majority stake in Peterson Chemical, a Fort Smith, Ark.-based maker of polyurethane foam products. No financial terms were disclosed.

• Charterhouse Capital Partners has rejected a £300 million takeover offer from Triton Partners for British medical equipment company Turnstall Healthcare Group Ltd., according to Reuters. If Charterhouse doesn’t find a better bid, it may seek to refinance some of Turnstall’s £1.2 billion in net debt. Read more.

• General Atlantic has agreed to increase its equity stake in Brazilian brokerage XP Investimentos CCTVM SA from 33% to 49%. First, General Atlantic will acquire a 10% stake from Actis. Second, it will acquire additional shares via a new direct investment. Combined, the two transactions are valued at around $130 million. Read more.

• Permira has agreed to acquire Arcaplanet, an Italian pet supplies retailer, from Motion Equity Partners for an undisclosed amount. Read more.

IPOs

• BATS Global Markets, a Lenexa, Kansas-based securities exchange operator, raised $253 million in its IPO. The company priced 13.3 million shares at $19 (high end of range). It will trade on the BATS Exchange under ticker symbol BATS, with Morgan Stanley and Citigroup serving as lead underwriters. Shareholders include TA Associates (17.1% pre-IPO stake), Spectrum Equity Investors and a group of investment banks. Read more.

 

EXITS

• Lonza Group (Swiss: LON) reportedly has expressed interest in acquiring Catalent (Nasdaq: CTLT), a Somerset, N.J.-based healthcare company that The Blackstone Group acquired from Cardinal Health in 2007 and took public in 2014. Catalent currently has a market cap of around $3.7 billion. Read more.

• Waud Capital Partners has sold its majority stake in True Partners Consulting LLC, a Chicago-based tax and business advisory, to the company’s managing directors. www.tpctax.com

OTHER DEALS

• Magic Leap, the Florida-based augmented reality startup that has raised more than $1.3 billion in VC funding, reportedly has acquired Israeli security startup NorthBit for an undisclosed amount. Read more.

• Mitel (Nasdaq: MITL) has agreed to acquire Polycom Inc. (Nasdaq: PLCM) for $1.96 billion in cash and stock. Read more.

• Valeant Pharmaceuticals (NYSE: VRX) has hired Goldman Sachs and Centerview Partners to conduct a strategic review that could include the sale of non-core assets, according to Reuters. Read more.

FIRMS & FUNDS

• Brookfield Capital Partners has closed on $3.38 billion for its fourth distressed private equity fund, according to a regulatory filing. The Toronto-based firm may still be in market, as other public documents suggest a $3.5 billion target. www.brookfield.com

• CincyTech, an early-stage VC firm focused on companies in southwest Ohio, has closed its fourth fund with $30.75 million in capital commitments. www.cincytech.com

• MBK Partners, an Asia-focused buyout firm, will seek up to $4 billion for its fourth fund in the second half of 2016, according to the WSJ. Pre-marketing has already begun. Read more.

MOVING IN, ON & UP

• Anthony Whittemore has stepped down as co-head of Americas M&A at Deutsche Bank, according to Reuters. Read more.

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