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Term Sheet — Monday, May 9

Random Ramblings

Some quick notes to kick off your National Butterscotch Brownie Day:

• LendingClubfoot: Rough morning for Unicorn University graduate LendingClub, with the stock down nearly 25% following news that founder Renaud Laplanche had resigned as chairman and CEO. The sudden decision was based on the discovery that $22 million in loans ($15m in March, $7m in April) from a single institutional investor were sold “in contravention of the investor’s expressed instructions.” Moreover, it seems that certain LendingClub managers were aware they were doing wrong, with one going so far as to change date information on an application.

In its analyst call this morning — which originally was supposed to focus on earnings — the company did not specify what Laplanche knew or when he knew it. LenndingClub did say none of the departed managers will receive severance, but it’s unclear if that also included Laplanche (who holds 2.2% of the company’s outstanding stock). I’ve put in calls for clarification, but have not yet received a reply.

• Ugly divorce proceedings: Limited partners on Friday approved an amendment that will provide Xfund 2 with a limited amount of life, permitting Patrick Chung to make follow-on commitments to the vehicle’s 11 existing portfolio companies. The LPs also slashed their overall capital commitments by 50%, meaning that the $100 million fund is now a $50 million fund.

It is unclear exactly what percentage of LPs ratified these changes, or what it may (or may not) portend in terms of Chung being eventually allowed to make new investments.

• $400 million pivot: Last week we noted that Pivotal, a Palo Alto, Calif.-based software development specialist, had announced $253 million in Series C funding led by Ford Motor Co. But then came an SEC filing showing that Pivotal actually had raised $653 million in new equity (which is a bit more, if my math is correct).

My Fortune colleague Barb Darrow reached out to Pivotal, and learned the extra $400 million related to how EMC, one of Pivotal’s parent company, has converted $400 million of existing debt to equity. Read more here.

• From the courthouse: It appears that Lisa Lee and CVC Capital Partners have agreed to private mediation, although it does not appear to necessarily preclude a trial (per new court docs).

As you might recall, Lee is a former managing director of investor relations at CVC (she’s now at Providence Equity), who sued CVC for such claims as violations of the Family Leave Act and retaliation for reporting alleged incidents such as being fondled by a senior executive.

• Clarification: On Friday we reported on the demise of on-demand private jet service BlackJet. The item said that BlackJet was founded by Uber co-founder and chairman Garrett Camp, an assertion that was based on multiple contemporaneous news reports (which Camp did not dispute at the time). But Camp’s representatives emailed over the weekend, saying that he was only an early investor and board member of BlackJet (once it rebranded from an earlier incarnation called GreenJet), emphasizing that it has had no involvement since the company reorganized in late 2013.


• JAB Holding, an investment holding group that already holds Keurig Green Mountain and Peet’s Coffee & Tea, has agreed to acquire doughnut chain Krispy Kreme (NYSE: KKD) for approximately $1.5 billion, or $21 per share (25% premium over Friday’s closing price). Read more.


• CoreOS, a San Francisco-based provider of container-enabled infrastructure, has raised $28 million in Series B funding. Google Ventures led the round, and was joined by Intel Capital and return backers Accel, Fuel Capital, Kleiner Perkins Caufield & Byers and the Y Combinator Continuity Fund.

• Relayware, a Redwood Shores, Calif.-based provider of partner relationship management software, has raised $11 million in new VC funding from Amadeus Capital Partners and return backer Albion Ventures.


• Audax Group has acquired Halo Branded Solutions Inc., a Sterling, Ill.-based marketing services and supply chain for the promotional products industry. No financial terms were disclosed.

• Chrysalis, a Calgary-based private equity firm, has acquired Maximum Yield Publications Inc., a British Columbia-based indoor gardening information publisher. No financial terms were disclosed.

•, a West Bend, Wis.-based online retailer of leading hauling and transportation products, has acquired Heavy Duty Ramps LLC, a Milwaukee-based designer and manufacturer of aluminum ramps. No financial terms were disclosed. is a portfolio company of Rotunda Capital Partners.

• First Reserve has agreed to acquire a transformer and switchgear manufacturing unit of India-listed Crompton Greaves Ltd.’s international power transmission and distribution division. No financial terms were disclosed. The business will be renamed Pauwels.

• PAI Partners is in advanced talks to acquire Ethypharm, a French drug developer focused on treatment of pains and addictions, for around €750 million from Astorg Partners, according to Reuters. Rothschild has been managing the process. Read more.

• Triton Private Equity has agreed to acquire the industrial services unit of German engineering group Voith for €350 million (including debt). Read more.


• Six companies are expected to price IPOs on U.S. exchanges this week: Acacia Communications, Cancer Prevention Pharma, Oncobiologics, SiteOne Landscape Supply, Turning Point Brands and Viamet Pharma. Read more.

• Nant Health LLC, a Culver City, Calif.-based personalized healthcare company led by Patrick Soon-Shiong, has filed for a $92 million IPO. It plans to trade on the Nasdaq under ticker symbol NH, with Jefferies and Cowen & Co. serving as lead underwriters. The company reports a $72 million net loss on $58 million in revenue for 2015. Shareholders include Allscripts Healthcare Solutions, Celgene Corp., BlackBerry Corp., Kuwait Investment Authority and Verizon Ventures.

• Spring Bank Pharmaceuticals Inc., a Hopkinton, Mass.-based developer of drugs based on a proprietary small molecule nucleic acid hybrid, raised $11 million in its IPO. The company priced 0.9 million shares at $12 per share, compared to already-reduced plans that had the company offering 1.15 million shares at between $12 and $14 per share. The pre-revenue company will trade on the Nasdaq under ticker symbol SBPH.


• BTG (LSE: BTG) has agreed to acquire Galil Medical, an Israeli developer of oncology cryoablation technology, for upwards of $110 million (including $84.5m in cash). Galil Medical had raised around $68 million in VC funding from firms like Investor Growth Capital, Elron Electronic Industries, Thomas McNerney & Partners and The Vertical Group.


• Bango (AIM: BGO), a UK-based mobile payments startup that lets consumers charge app store purchases to their smartphone bills, has acquired San Jose, Calif.-based carrier billing service BilltoMobile for $3.5 million in cash and stock. Read more.

• Colony Capital (NYSE: CLNY) said that it is in exclusive talks to acquire NorthStar Asset Management (NYSE: NSAM), a New York-based commercial real estate management company with a current market cap of around $2.27 billion.

• Evonik Industries of Germany has agreed to acquire the specialty and coating additives operations of Allentown, Penn.-based Air Products and Chemicals (NYSE: APD) for approximately $3.8 billion. Read more.

• The Medicines Co. (Nasdaq: MDCO) has agreed to sell some of its cardiovascular assets to Italy’s Chiesi Farmaceutici SpA for up to $792 million (including $260m in cash at closing).

• Total SA (Paris: FP) has agreed to acquire French battery manufacturer Saft Groupe SA (Paris: SAFT) at an equity value of approximately €950 million. Read more.

• Upserve, a Providence, R.I.-based provider of restaurant management technology solutions, has acquired Breadcrumb, a mobile point-of-sale solution for restaurants, from Groupon (Nasdaq: GRPN). No financial terms were disclosed. Upserve (f.k.a. Swipely) has raised over $50 million in VC funding from firms like First Round Capital, Shasta Ventures, Index Ventures, Pritzker Group and Greylock Partners.


• GCA Savvian Corp. (Tokyo: 2174), an investment banking boutique, has agreed to merge with London-based mid-market financial advisory Altium. No financial terms were disclosed. Following the deal, the combined firm will operate under the name GCA Altium in Europe and GCA in the U.S. and Asia.

• TPG Capital has closed its seventh flagship private equity fund with $10.5 billion in capital commitments (including a $400m GP commit). So far, the fund has invested $2.1 billion over six companies.


• Villi Iltchev has joined VC firm August Capital as a partner. He previously led corporate development for Box and, before that, for LifeLock.

• Bryan Lewis has agreed to join the $25 billion Pennsylvania State Employees’ Retirement System as chief investment officer, succeeding the retiring Thomas Brier. Lewis currently is executive director of the Illinois State Universities Retirement System. Read more.

• Andew Luh has joined Gunderson Dettmer as chair of the law firm’s global M&A practice. He previously was a partner with Fenwick & West.

 Norman Winarsky, the former president of SRI Ventures and co-founder of Siri, has joined Relay Ventures as the Toronto-based VC firm’s first executive-in-residence.

• Chris Tsakalakis has joined VC firm Benchmark as an entrepreneur-in-residence. He previously was president of StubHub.

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