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Term Sheet — Monday, May 2

May 2, 2016, 2:29 PM UTC

Random Ramblings

Gene Trainor announced on Friday that he is stepping down as chief operating officer of Foundation Capital, a role he assumed in 2010 (before which he spent nearly a decade as COO of New Enterprise Associates). But this isn’t a retirement, nor is Trainor moving on to another venture capital firm. Instead, he’s planning to become a middle school math teacher in San Francisco’s public schools.

Trainor says that when he moved out to Silicon Valley to join Foundation, he knew he wanted to “give back,” but didn’t know how or where. He soon hooked up with The Smart Foundation, an education-focused nonprofit founded by venture capitalists Roger Lee (Battery Ventures) and Chip Linehan (NEA).

“It really introduced me to the educational challenges in low-income communities, and it began to resonate,” Trainor says. “I eventually realized that this is something I wanted to do fulltime… My kids have all been very fortunate, going to private schools, but the idea of teaching kids like them ― upper and upper middle-class ― didn’t really spark my interest.”

So Trainor and Foundation launched a transition plan last fall, and he plans to enroll in a San Francisco teacher residency program jointly run by Stanford and the University of San Francisco. If he passes his tests and is accepted, he’ll get put right into a middle school classroom in one of San Francisco’s lower-income areas, while working to get his Master’s degree in education at night.

He admits to being a bit nervous, particularly as he hasn’t worked with non-business math in a long time, and because today’s teaching methods differ significantly from when he went to school. “Those concerns exist, but they’re overwhelmed by how invigorating this already has been. I feel like it’s going to add so much youth to me as a person, and hopefully help so many kids.”

 Fund scoop: Heritage Group, a Nashville, Tenn.-based VC and growth equity firm focused on the healthcare sector, has closed its second fund with around $220 million in capital commitments. This is a step-up from the $170 million that Heritage raised for its debut fund in 2011.

Heritage managing director Paul Wallace says that there are no financial institutions serving as LPs, as the firm prefers strategic LPs like Cardinal Health, Cerner, Community Health Systems, Tenet Healthcare. In that way, it’s a bit like an outsourced corporate VC group with more traditional financial incentivers (even though several of its LPs have their own direct investment programs).

“Their engagement and involvement drives deal origination,” Wallace explains, adding that the LPs can aid with commercialization for earlier-stage portfolio companies.

An uncommon Pillar: Last week we reported on the formation of Pillar Cos., a $100 million-targeted VC firm founded by Jamie Goldstein, who had spent the past 18 years with North Bridge Venture Partners. Now we have some more details:

The Boston-based firm plans to be the first money into tech startups, and is being launched in partnership with 17 local entrepreneurs. This includes the CEOs of such companies as Actifio, DraftKings, Rapid7, Netezza, TripAdvisor and Wayfair. These folks will help source deals, advise portfolio companies and even serve as Pillar's board representatives in select situations.

"I spent a lot of time talking with entrepreneurs after leaving North Bridge, trying to understand what they were looking for in a VC firm, and why VC has such a terrible reputation among so many of them," Goldstein says. "What so many of them want are people who really understand their daily struggles and who structure deals with a real alignment of interests."

To that end, Pillar plans to mostly invest for common shares, instead of preferred. Goldstein says that his analysis shows the VC advantage of preferred stock is essentially a rounding error, and that it sends the wrong message to entrepreneurs and employees.

Buffett-Palooza: My Fortune colleagues Steve Gandell spent the weekend in Omaha, and has full coverage of what the Oracle and his disciples had to say. Check it all out by going here. We've also got a piece from Buffett himself, on how he would solve America's trade issues.

Giving back: KKR yesterday celebrated its 40th anniversary, and today announced an affiliated initiative whereby employees will receive 40 hours of paid time off to "volunteer and give back to the organizations in their communities." Big kudos on this.

Pay it forward: Last night's 60 Minutes had a piece on financial tech innovation, highlighting payments "unicorn" Stripe. We interviewed Stripe's co-founding brothers ― John and Patrick Collison ― at the most recent Fortune Brainstorm Tech event. You can watch the full conversation by going here.


Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI) have called off their $35 billion merger agreement, following regulatory challenges in the U.S. and Europe. Halliburton will be required to pay a $3.5 billion breakup fee, for which Baker Hughes already has plans. Read more.


 Homology Medicines Inc., a Lexington, Mass.-based gene editing and gene therapy company focused on developing treatments for patients with rare diseases, has raised $43.5 million in Series A funding. 5AM Ventures and ARCH Venture Partners co-led the round, and were joined by Temasek and Deerfield Management.

 Sienna Biopharmaceuticals Inc., a Westlake Village, Calif.-based aesthetics and medical dermatology startup, has raised $34 million in Series A funding. ARCH Venture Partners led the round, and was joined by Altitude Life Science Ventures, Partner Fund Management and Venvest Capital.

 Varo Money, a consumer-facing mobile banking app, has raised more than $27 million in first-round funding led by Warburg Pincus. Read more.

 Home Chef, a Chicago-based recipe and meal box subscription service, has raised $10 million in Series A funding co-led by Shining Capital and Guild Capital. Read more.

 EclecticIQ, an Amsterdam-based provider of threat intelligence solutions for enterprise and government clients, has raised €5.5 million in Series A funding from INKEF Capital and KPN Ventures.

 SAM Labs, a London-based provider of IoT design kits for kids, has raised £3.2 million in new VC funding led by Imperial Ventures. Read more.

 CodeCombat, a San Francisco-based startup that is gamifying learning to code, has raised $2 million in seed funding from Third Kind Venture Capital, Andreessen Horowitz and Allen & Company.


 ABRY Partners has completed its previously-announced acquisition of SambaSafety, an Albuquerque, N.M.-based provider of cloud-based driver risk management solutions. No financial terms were disclosed. Sellers include Main Street Capital Corp., while Antares Capital provided debt financing to support the deal.

 Advent International, Bain Capital and Clessidra have partnered on a deal to acquire the Setefi and Intesa Sanpaolo Card payment units of Italy’s Intesa Sanpaolo (BIT: ISP) for approximately $1.2 billion. Read more.

 Anne Arundel Dermatology Management, a Severna Park, Md.-based dermatology practice network owned by New MainStream Capital, has acquired Rockville, Md.-based Montgomery Dermatology Associates LLC. No financial terms were disclosed. 

 Apax Partners has completed its previously-announced acquisition of InfoVista SA, a French provider of network management software, from Thoma Bravo. No financial terms were disclosed.

 Concordia Healthcare Corp. (TSX: CXR), a Canadian pharma company with a current market cap of C$1.86 billion, has hired Greenhill & Co. to solicit potential buyers, according to Bloomberg. Apollo Global Management and TPG Capital reportedly are among those that have been contacted, while Bloomberg previously reported that the company had held preliminary takeover talks with The Blackstone Group. Read more.

 Kohlberg & Co. has acquired Amendia, a Marietta, Ga.-based maker of medical devices used in spinal surgical procedures. No financial terms were disclosed.

 MSouth Equity Partners has sponsored a recapitalization of Hire Dynamics, an Atlanta-based industrial staffing company. No financial terms were disclosed.

 West Star Aviation, a Grand Junction, Colo.-based provider of MRO services for the business aviation industry, has raised an undisclosed amount of equity funding from Norwest Equity Partners.

 Wow Internet, Cable & Phone, an Evansville, Ind.-based provider of residential and consumer broadband services, has raised $40 million in new equity funding from existing backers Avista Capital Partners and Crestview Partners.


 Acacia Communications, a Maynard, Mass.-based provider of transceivers for ultra-high speed fiber optic transmission to the telecom infrastructure industry, has set its IPO terms to 4.5 million shares being offered at between $21 and $23 per share. It would have an initial market cap of around $784 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol ACIA, with Goldman Sachs, BofA Merrill Lynch and Deutsche Bank serving as lead underwriters. Acacia reports $40.5 million of net income on $239 million in revenue for 2015, compared to $13.5 million of net income on $146 million in revenue for the year-earlier period. Shareholders include Matrix Partners (39.2% pre-IPO stake), Commonwealth Capital Ventures (19.7%), Summit Partners (9.4%) and Egan Managed Capital.

 SiteOne Landscape Supply Inc. (f.k.a. John Deere Landscapes), a Roswell, Ga.-based wholesale distributor of landscape supplies in the U.S., has set its IPO terms to 10 million shares being offered at between $20 and $22 per share. It would have an initial market cap of around $830 million, were it to price in the middle of its range. The company plans to trade under ticker symbol SITE, with Deutsche Bank serving as lead underwriter. SiteOne reports $20.8 million of net income on $1.45 billion in revenue for 2015. Owners include Clayton Dubilier & Rice and Deere & Co.


 Oracle (Nasdaq: ORCL) has agreed to acquire Opower (NYSE: OPWR), an Arlington, Va.-based provider of data analytics software to big energy companies, for $532 million (net of Opower’s cash) or $10.30 per share. Sellers would include New Enterprise Associates, which holds a 16.85% stake. Read more.

 Vimeo, a video sharing site owned by IAC/InterActiveCorp (Nasdaq: IAC), has acquired VHX, a Brooklyn-based platform for premium OTT video channels. No financial terms were disclosed. VHX had raised over $10 million in VC funding from firms like Comcast Ventures, Lerer Hippeau Ventures, Lowercase Capital, WME and Union Square Ventures. Read more.


 American International Group (NYSE: AIG) has raised $1.25 billion via a block sale of some of its stake in Chinese insurer PICC Property and Casualty Co Ltd. (HK: 2328), according to IFR. Read more.

 Acquisio, a Quebec-based provider of performance marketing solutions for small businesses, has raised an undisclosed amount of venture debt financing from Wellington Financial.

 Bankruptcy Management Solutions, an Irvine, Calif.-based provider of bankruptcy administration software, has retained Houlihan Lokey to find a buyer, according to Dow Jones.

 Hunan Dakang Pasture Farming Co Ltd., a unit of Shanghai Pengxin Group Co., has acquired a 57% stake in Brazilian grains company Fiagril Participações SA. No financial terms were disclosed, although Reuters says the deal could value Fiagril at around $290 million. Read more.

 State Grid Corp. of China, China Three Gorges Corp. and Italy's Enel SpA each have submitted bids for a 16% stake in listed Brazilian renewable energy company Renova Energia SA, according to Reuters. The new auction comes after SunEdison withdrew a $250 million offer last year, in a process that also included interest from TPG Capital and Brookfield Asset Management. Read more.

 Zain, a listed Kuwaiti telecom company, has agreed to acquire a 92.3% stake in Sudanese fixed line operator Canar for around $95 million from Abu Dhabi-listed Etisalat. Read more.


 Altas Partners, a Toronto-based private equity firm founded by ex-Onex Partners managing director Andrew Shiner, has closed its debut fund with $1 billion in capital commitments. The vehicle has a 17-year investment cycle, and only charges management fees on invested capital. Read more.

Leerink Capital Partners is raising up to $250 million for a new VC fund, according to a regulatory filing. It also is raising up to $50 million for a Massachusetts-focused VC fund.

Rothenberg Ventures, a San Francisco-based seed and early-stage VC firm, is raising up to $50 million for its next fund, according to a regulatory filing. It already has secured $17 million.


 David Druley has been named chairman and CEO of Cambridge Associates, effective July 1. He previously had served as the alternative investment advisory firm’s president, a role that now will be filled by Philip Walton. Sandra Urie, who has been with Cambridge Associates since 1985 and CEO for the past 16 years, will remain “actively involved” in an of counsel role.

 FTV Capital has promoted Brad Bernstein to managing partner. He will continue to lead the growth equity firm’s New York office, while fellow managing partner Richard Garman will continue to lead its San Francisco office. Bernstein joined FTV Capital in 2003 from Oak Hill Capital Management.

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