CryptocurrencyInvestingBanksReal Estate

Term Sheet — Tuesday, May 3

May 3, 2016, 2:19 PM UTC

Random Ramblings

Some very quick notes to kick off your Tuesday, before getting to a ridiculous amount of deal news:

 Opportunity is the new black: There was an SEC filing last week from Boston-based .406 Ventures, showing that it is raising upwards of $80 million for its first "opportunities" fund. This follows recent opportunities fund news from Data Collective, Mayfield and Menlo Ventures. Two quick thoughts: (1) All of these 'extra' fund are going to play havoc with VC industry overhang statistics, since a lot of this capital will never be deployed (almost by design); (2) While such vehicles certainly can cause alignment of interest (and GP focus) issues for LPs who don't participate, they do seem preferable to the likely alternative (i.e., company-specific SPVs).

No, Dell didn't: Once Dell Inc. completes its $59 billion merger with EMC Corp. later this year, the combined company will be known as Dell Technologies. I know, I know... they blew an amazing chance to call it Run-DMC. And for that they should be deeply ashamed (trademarks notwithstanding).

The combined company’s client services business will be branded as Dell Inc., while its enterprise business will be branded as Dell EMC.

Also worth noting that Dell is still awaiting SEC approval on an third amended proxy statement that it filed on April 11. Once that happens, the EMC shareholder vote can be formally scheduled. Given that there is usually a 30-45 day lag between such approval and an actual vote, it appears much more likely that EMC shareholders will get together in June (rather than in May, as originally expected).

Update: Last week we discussed how Fidelity had marked down Stemcentrx, the cancer drug startup that just agreed to be acquired by AbbVie for upwards of $10.2 billion (i.e., a premium to where Fidelity had first invested, let alone the deep valuation cut). That mark was through the end of February, and new data shows that Fidelity brought the shares back up to cost at the end of March.

There also were some interesting comments on all of this from Stemcentrx CEO Brian Slingerland, per Jessica Lessin of The Information:

"Fidelity marked us down 40% while we were trending upwards,” Slingerland told me, noting that he was told the decision was driven purely by an audit committee and that the portfolio manager didn’t agree. “It is insane to have an audit committee determine your valuation,” he added, saying the writedown earlier this year caused anxiety among multiple parties that had been interested in acquiring Stemcentrx. “The assumption is that the investors know something. They didn’t.”

 Good work pays off: Two years ago I wrote about venture capital firm Bay Partners, in a piece titled "The best VC firm you thought was dead and buried." It basically explained how Bay, a relic of the dotcom days, had quietly begun generating serious liquidity out of its legacy portfolio, thanks in part to the work of Stu Philips, a veteran investor who was brought in expressly for that purpose.

Now, according to his LinkedIn profile, Philips has a new job: Managing director at Insight Venture Partners, based in San Francisco. No comment yet from Philips or Insight.


 AlliedBarton Security Services, a Conshohocken, Penn.-based provider of security officer services, has agreed to merge with Santa Ana, Calif.-based rival Universal Services of America. In a statement, the two companies say they are of similar size, and would generate combined annual revenue of approximately $4.5 billion.

Wendel SE acquired a 95% stake in AlliedBarton last December for around $1.68 billion (including a $687m equity investment), and in the merger would receive around $387 million in cash and 33% of the combined company’s shares. Warburg Pincus acquired Universal Services of America last July for an undisclosed amount, and the combined business will operate under the Universal Services brand.


 MobiKwik, an India-based mobile wallet company, has raised $50 million in Series C funding. Japan’s GMO and Taiwan’s Mediatek co-led the round, and were joined by Sequoia Capital India and Treeline Asia. Read more.

 Digital Reasoning, a Nashville, Tenn.-based cognitive computing startup, has raised $40 million in Series D funding. Lemhi Ventures and Nasdaq co-led the round, and were joined by return backers Goldman Sachs and HCA.

 Maana, a Palo Alto, Calif.-based analytics platform that “operationalizes big data insights into line-of-business applications,” has raised $26 million in Series B funding. Saudi Aramco Energy Ventures led the round, and was joined by return backers Shell Technology Ventures, GE Ventures, Chevron Technology Ventures, Intel Capital and Frost Data Capital.

 Zooz, an Israeli payments platform designed to reduce the percentage of international credit cards being rejected, has raised $24 million in Series C funding. Target Global Ventures led the round, and was joined by Fang Fund, iAngelsm, Kreos Capital and return backers like Blumberg Capital, Lool Ventures, Rhodium, Access Industries, XSeed Capital and CampOne Ventures. Read more.

 Bench, a Vancouver-based online bookkeeping service for small businesses and independent contractors, has raised US$16 million in Series B funding. Bain Capital Ventures led the round, and was joined by return backers Altos Ventures and Contour Venture Partners.

 Envera Health, a Richmond, Va.-based provider of consumer engagement solutions for healthcare providers, has raised $14 million in new VC funding. Harbert Venture Partners and Noro-Moseley Partners co-led the round, and were joined by New Richmond Ventures.

 Jolla, a Finland-based developer of an alternative mobile OS called Sailfish, has raised $12 million in Series C funding. No investors were identified. Read more.

 MakeTime, a Lexington, Ky.-based “manufacturing platform that monetizes machine capacity,” has raised $8 million in new VC funding. Foundry Group led the round, and was joined by return backers Almaz Capital and the Kentucky Science & Technology Corp.

 Roam, an international network of communal living spaces, has raised $3.3 million in seed funding. CRV led the round, and was joined by Collaborative Fund, NextView Ventures and individual angels.


 Actis has agreed to sell its remaining minority stake in XP Investimentos, a Brazilian retail brokerage, to General Atlantic. No financial terms were disclosed.

 Bain Capital and Vista Equity Partners have acquired Vertafore, a Bothell, Wash.-based provider of insurance industry software, from TPG Capital. No financial terms were disclosed.

 Cookie Chips, a Gardena, Calif.-based packaged snackmaker, has raised an undisclosed amount of private equity funding from Alliance Consumer Growth.

 Epic Health Services Inc., a Dallas-based portfolio company of Webster Capital, has acquired Care Resources, a Baltimore-based provider of pediatric therapy and early intervention services for children with special needs, plus staffing of education teachers and nurses to schools. No financial terms were disclosed. The seller was ResCare, a portfolio company of Onex Corp.

 Dwyer Group Inc., a Waco, Texas-based franchising portfolio platform sponsored by The Riverside Company, has acquired Locatec, a leak detection and repair business with 55 franchise locations in Germany and Austria. No financial terms were disclosed.

 Novolex, a Hartsville, S.C.-based portfolio company of Wind Point Partners, has acquired Heritage Bag Co., a Roanoke, Texas-based manufacturer of plastic can liners and other packaging products. No financial terms were disclosed.

 PetroChoice, a Riddlesburg, Penn.-based lubrication solutions provider owned by Golden Gate Capital, has acquired the new oil business of Universal Lubricants, a Wichita, Kansas-based portfolio company of Pegasus Capital Advisors. No financial terms were disclosed.

 Spinal Simplicity, an Overland Park, Kansas-based developer of medical devices for comkplex spinal surgeries, has raised an undisclosed amount of equity funding from Nueterra Capital.

 Strattam Capital has completed its previously-announced acquisition of a majority stake in Blacksmith Applications Inc., a Lawrence, Mass.-based trade spend management SaaS platform for the consumer packaged goods market. No financial terms were disclosed.

 Teton Waters Ranch, a Denver-based producer of grass-fed beer products like sausages and chili, has raised an undisclosed amount of equity funding from Sunrise Strategic Partners.

 Webster Capital has acquired Healthcare Associates of Texas, a physician practice management company that provides services to Healthcare Associates of Irving, a full-service primary care practice in Dallas. No financial terms were disclosed.

 Xact Data Discovery, a Mission, Kansas-based portfolio company of Clearview Capital, has acquired F1 Discovery LLC, a San Francisco-based provider of electronic discovery services to law firms and corporations. No financial terms were disclosed.


 Cotiviti Holdings Inc., an Atlanta-based provider of payment accuracy software for the healthcare and retail sectors, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol COTV, with Goldman Sachs and J.P. Morgan serving as lead underwriters. The company reports nearly $14 million of net income in 2015 on $541 million in revenue, compared to a $26 million loss on $441 million in revenue for 2014. Citiviti is owned by Advent International.


 CCMP Capital is exploring a sale of Jamieson Laboratories, a Canadian vitamin maker that could be valued at around $1 billion, according to the WSJ. Nomura and Houlihan Lokey are managing the process. Read more.

 Leeds Equity Partners has completed its previously-announced sale of Evanta, a Portland, Ore.-based provider of executive leadership development and collaborative exchange programs, to CEB (NYSE: CEB) for $275 million in cash. Leeds had paid $94 million to acquire Evanta back in 2012.


 Aeropostale, a New York-based casual clothing retailer, reportedly is planning to file for Chapter 11 bankruptcy protection and close 100 stores. Read more.

 Atlantic Alliance Partnership Corp. (Nasdaq: AAPC) has agreed to acquire TLA Worldwide PLC (AIM: TLA), a UK-based sports marketing and athlete representation firm, for just over $200 million in cash (up to $60m) and stock.

 Biogen (Nasdaq: BIIB) announced plans for a tax-free spinout of its hemophilia drug business. Read more.

 Chegg Inc. (NYSE: CHGG) has acquired Imagine Easy Solutions, a New York-based provider of online bibliography solutions. No financial terms were disclosed.

 DAS Health, a Tampa, Fla.-based provider of health IT and management services, has acquired the electronic health records and practice management business of Mobile, Ala.-based Jackson Key Practice Solutions. No financial terms were disclosed.

 Fairway Group Holdings Corp. (Nasdaq: FWM), a New York-based supermarket chain, has filed for Chapter 11 bankruptcy protection. Read more.

 Formlabs, a Somerville, Mass.-based maker of 3D printers, has acquired Pinshape, a Vancouver-based online 3D printing community. Formlabs has raised over $20 million in VC funding, from firms like DFJ Growth, Kima Ventures and Pitango Venture Capital. Pinshape was backed by 500 Startups. Read more. Read more.

 GNC (NYSE: GNC), a Pittsburgh-based retailer of nutritional supplements and other wellness products, said that it has hired Goldman Sachs to explore “strategic and financial alternatives,” including a possible sale of the company. GNC has a current market cap of around $1.78 billion, and the announcement came after an underwhelming earnings report. Read more.

 Google (Nasdaq: GOOG) has acquired Synergyse, a Canadian provider of  training software for Google Apps users. No financial terms were disclosed. Read more.

 International Paper (NYSE: IP) has agreed to acquire the cellulose fibers pulp business of Weyerhaeuser (NYSE: WY) for $2.2 billion. Read more.


 Asos (AIM: ASC), a British fashion retailer, has launched a corporate venture group (Asos Ventures) focused on fashion technology startups. It will be run in partnership with Waayra, a unit of Telefónica. Read more.

BlackRock has closed its third direct co-investment private equity fund with over $630 million in capital commitments.


Jacques Brand is stepping down as CEO of North American operations at Deutsche Bank, in order to join PJT Partners, according to the NY Times. Read more. Read more.

Brennan Libbey has joined Livingstone, a Chicago-based M&A and debt advisory, as a partner in the firm’s new Los Angeles office. He previously was head of business services at Houlihan Lokey.

Eval Rabinovich, co-founder of PlayScape, has joined the investment team of London-based VC firm Octopus Ventures.

Share today's Term Sheet: