Some notes to kick off National Limerick Day…
• Where’s my union card? A joint letter was sent yesterday by eight groups (including the AFL-CIO, American Federation of Teachers and Americans for Financial Reform) to U.S. Treasury Secretary Jack Lew and IRS officials, decrying tax “abuse” related to private equity portfolio company monitoring fees (including acceleration clauses). And more than one third of the footnotes are to items I’ve written in Term Sheet and/or at Fortune.com, plus an additional in-text mention.
From the letter:
“First, the improper deduction of monitoring fees deprives the U.S. government of hundreds of millions if not billions of legally owed tax revenue each and every year; this requires the government to make up the difference in the form of higher taxes on honest taxpayers. Second, the improper deduction of monitoring fees also facilitates private equity’s business model of stripping large amounts of capital out of operating portfolio companies, which impedes their growth and makes them more susceptible to financial failure…
Nobody pays millions of dollar for services while allowing the service provider to decide whether it will actually do any work. Nobody allows a service provider to unilaterally terminate a service agreement and still receive the full value of the entire remaining contract. In fact, these monitoring fees are in reality disguised dividends. “
• Today in Theranos: Big reorg at the beseiged blood testing startup, with president and chief operating officer Sunny Balwani “retiring” at the age of 50. The plan is to hire a new COO, head of research and chief medical officer, but none of those positions seem to yet be filled. Theranos also has added three new members to its board of directors: Fabrizio Bonanni (ex-Amgen), William Foege (ex-CDC director) and Richard Kovacevich (ex-Wells Fargo CEO). Both Foege and Kovacevich had been Theranos directors before a board shakeup last year resulted in them becoming senior advisors.
• Speaking of Theranos: A number of people yesterday drew parallels between the company and uBeam, a VC-backed wireless electric charging startup that has been the subject of deep skepticism among certain physicists. They arose after a former uBeam vice president of engineering, Paul Reynolds, alleged in a series of blog posts that the uBeam technology ― which has never been publicly demonstrated ― is little more than vaporware.
It’s a bad comparison, and not only because it smells a bit of bias against young, blonde female founders (in this case, Meredith Perry). Both may well prove to be lousy investments, with technology that doesn’t ultimately work as advertised. But that’s not terribly unusual for ambitious startups in the biotech or energy tech sectors. The key difference is that Theranos was providing vital medical information to real people in real clinics, where errors could result in healthcare treatment mistakes (remember this?). uBeam also has some theoretical safety issues, but not nearly so directly nor at the same scale.
Let each of them stand or fall on their own.
• Talking head: I was on CNBC yesterday to discuss the LendingClub mess and, in particular, how it’s been made worse by a board of directors that has been way too cagey about what really happened. Video here.
• Fighting words: ESPN on Tuesday reported that Ultimate Fighting Championship, the mixed martial arts league whose fighters include Ronda Rousey and Conor McGregor, is in “advanced talks” to be acquired (the league is owned by a holding company for Lorenzo and Frank Fertitta). Then UFC president Dana White came out and called the report bogus, saying to multiple media outlets that UFC “is not for sale.”
But White isn’t telling the truth. A source familiar with the situation tells me that UFC is indeed on the block, and has retained bankers to help find a buyer (adding that a sale is not certain, particularly given that it has family owners who may change their minds). It’s also possible that White is simply uninformed, although the same source says that he would be considered an integral part of the company, rather than an executive to be replaced in the event of an acquisition.
THE BIG DEAL
• SiteOne Landscape Supply Inc. (f.k.a. John Deere Landscapes), a Roswell, Ga.-based wholesale distributor of landscape supplies in the U.S., raised $210 million in its IPO. The company priced 10 million shares at $21 per share (middle of range), for an initial market cap of around $830 million.
It will trade under ticker symbol SITE, while Deutsche Bank served as lead underwriter. SiteOne reported $20.8 million of net income on $1.45 billion in revenue for 2015. Owners include Clayton Dubilier & Rice and Deere & Co. www.siteone.com
VENTURE CAPITAL DEALS
• LetGo, a New York-based mobile marketplace for secondhand goods, has agreed to acquire the U.S. operations of Spain-based mobile classifieds company Wallapop. As part of the deal, existing will invest another $100 million into the combined business. LetGo backers include Naspers, while Wallapop has raised VC funding from such firms as Accel, Insight Venture Partners, NEA and Vostok Ventures. Read more.
• Bolt Threads, an Emeryville, Calif.-based maker of spider silk threads, has raised $50 million in Series C funding. Formation 8 led the round, and was joined by Innovation Endeavors, Nan Fung and return backers Founders Fund, Foundation Capital, Alafi Capital, and East West Capital. The company also struck a partnership with Patagonia. Read more.
• G1 Therapeutics, a Chapel Hill, N.C.-based developer of small molecules for use in cancer therapy and biodefense applications, has raised $47 million in third-round funding. Cormorant Asset Management led the round, and was joined by Aju IB Investment, Cowen Private Investments, Franklin Templeton Investments, Rock Springs Capital and return backers Eshelman Ventures, Hatteras Venture Partners, Lumira Capital, MedImmune Ventures, Mountain Group Capital, RA Capital and Tavistock Life Sciences. Read more.
• Capital Float, an India-based online lending platform for small businesses, has raised $25 million in Series B funding. Creation Investments led the round, and was joined by SAIF Partners, Sequoia Capital and Aspada. Read more.
• Evaneos, a French online marketplace for customized travel experiences, has raised $21 million in third-round funding from Serena Capital, Fonds Ambition Numérique managed by Bpifrance, ISAI,and XAnge. Read more.
Pillar Biosciences Inc., a Boston-based developer of clinical oncology testing solutions, has raised $18 million in new finding from ORI Healthcare Fund. www.pillar-biosciences.com
• Pwnie Express, a Boston-based provider of wireless and wired threat protection solutions, has raised $12.9 million in Series B funding. Ascent Venture Partners led the round, and was joined by MassMutual Ventures and return backers .406 Ventures, Fairhaven Capital and the Vermont Center for Emerging Technologies. www.pwnieexpress.com
• Sol Voltaics, a Swedish developer of solar energy nanomaterials, has raised $12.5 million in Series C funding. Riyadh Valley Co., the VC arm of King Saud University in Saudi Arabia, led the round, and was joined by return backers Umoe, FAM, Industrifonden and Nano Future Invest. The company also secured $4.5 million in new grand funding. www.solvoltaics.com
• ConnXus, a Mason, Ohio-based supplier diversity technology platform, has raised $5 million in Series A funding from Techstars Ventures, Serious Change LP and Impact America Fund. www.connxus.com
• Kontor, a New York-based market network for commercial interior design, has raised $4.6 million in new VC funding from FF Angel, Wellington Partners, Female Founders Fund and BBG Ventures. www.kontor.com
• Astrobotic Technology, a Pittsburgh-based startup that wants to eventually help deliver payloads to the moon, has raised $2.5 million in seed funding led by Space Angels Network. Read more.
PRIVATE EQUITY DEALS
• Clearlake Capital Group has agreed to acquire Vision Solutions, an Irvine, Calif.-based provider of disaster recovery and migration software, from Thoma Bravo. No financial terms were disclosed for the deal, which is expected to close later this quarter. www.visionsolutions.com
• EQT Infrastructure has agreed to acquire DCLI, a Charlotte, N.C.-based provider of chassis equipment and asset management services to the U.S. intermodal industry, from Littlejohn & Co. No financial terms were disclosed. www.dcli.com
• Great Hill Partners has agreed to acquire a majority equity stake in Evolve IP, a Wayne, Penn.-based cloud services company, for an undisclosed amount. www.evolveip.net
• SolAero Technologies Corp., an Albuquerque, N.M.-based provider of satellite solar power and structural solutions, has acquired San Diego-based rival Vanguard Space Technologies from Enlightenment Capital. No financial terms were disclosed. SolAero is a portfolio company of Veritas Capital. www.solaerotech.com
• Thoma Bravo has offered to acquire Infoblox Inc. (NYSE: BLOX), a Santa Clara, Calif.-based provider of network control solutions, according to Bloomberg. The company has a current market cap of around $886 million. Read more.
• Travel Nurse Across America, a North Little Rock, Ark.-based healthcare staffing firm focused on providing travel nurses to hospitals and healthcare facilities, has raised an undisclosed amount of private equity funding from Gridiron Capital. www.nurse.tv
• Zephyr, a Newark, Calif.-based provider of on-demand enterprise test management solutions, has raised $31 million in growth equity funding frm Frontier Capital. www.getzephyr.com
• China Music Corp., a Tencent-backed owner of online music streaming services Kugou and Kuwo, is prepping a U.S. IPO, according to the WSJ. Read more.
• Clearside Biomedical Inc., an Alpharetta, Ga.-based developer of therapies to treat blinding diseases of the eye, has set its IPO terms to 4 million shares being offered at between $14 and $16 per share. It would have an initial market cap of approximately $244 million, were it to price in the middle of its range. The pre-revenue company plans to trade on the Nasdaq under ticker symbol CLSD, with RBC Capital Markets serving as lead underwriter. Shareholders include Hatteras Venture Partners (28.4% pre-IPO stake), RMI Investments (12.5%), Santen Pharmaceutical Co. (9.2%), GRA Venture Fund (7.2%), Aju IB Investment, Cormorant Asset Management, Perceptive Advisors and Rock Springs Capital Management. www.clearsidebio.com
• Dong Energy AS, a Danish offshore wind power operator, is prepping a Copenhagen IPO for this summer. Shareholders include Goldman Sachs, The ATP Group and Pfa Pension. Read more.
• Grupo Supervielle SA, an Argentinian bank with around $3 billion in assets under management, has set its IPO terms to 2.8 million American depository shares being offered at between $11 and $13 per ADS. It would have a fully diluted market value of nearly $800 million, were it to price in the middle of its range. The company plans to trade on both the NYSE and the MERVAL, with Morgan Stanley and BofA Merrill Lynch serving as co-lead underwriters. www.gruposupervielle.com.ar
• Viamet Pharmaceuticals Holdings, a Durham, N.C.-based developer of inhibitors of validated metalloenzymes, has postponed an IPO that had been scheduled to price this week. The company had filed to sell 5.7 million shares at between $14 and $16 per share, after having previously filed for a $75 million IPO in 2014 that was withdrawn later that same year. Viamet has raised over $150 million in VC funding from firms like Novartis Bioventures (12.9% pre-IPO stake), Lilly Ventures (11.3%), Hatteras Venture Partners (7.8%) and Intersouth Partners (6.3%). www.viamet.com
• AMC Entertainment (NYSE: AMC), the Leawood, Kansas-based movie theater chain controlled by China’s Dalian Wanda Group, is preparing a $1.3 billion takeover offer for Odeon & UCI Cinemas Group, a European movie theater chain owned by Terra Firma Capital Partners, according to Bloomberg. Read more.
• DePuy Orthopaedics, a unit of Johnson & Johnson (NYSE: JNJ), has acquired BioMedical Enterprises Inc., a San Antonio, Texas-based maker of orthopedic implants for small bone fixation, from Cross Atlantic Partners and Camden Partners. No financial terms were disclosed. BME was represented on the deal by England & Co. www.bme-tx.com
• Providence Equity Partners is considering exit options for ZeniMax Media Inc., a Rockville, Md.-based video game publisher whose titles include Doom and Quake, according to Bloomberg. The company could be valued at upwards of $2.5 billion. Read more.
• Bayer AG of Germany is exploring a takeover bid for $39 billion U.S. agricultural company Monsanto Co. (NYSE: MON), according to Bloomberg. Read more.
• Nissan Motor (Tokyo: 7201) has agreed to acquire a 34% in Mitsubishi Motors (Tokyo: 7211) for around $2.2 billion. Read more.
• Paddle8, a New York-based secondary marketplace for art and luxury collectibles, is merging with German peer Auctionata. No financial terms were disclosed, except that Auctionata shareholders will receive a larger percentage of the combined company (as it is a bigger business). Auctionata had raised over $100 million in VC funding from firms like MCI Management, Hearst Ventures, Kreos Capital, Holtzbrinck Ventures, Earlybird Venture Capital, e-ventures, b-to-v Partners, Bright Capital and Kite Ventures. Paddle8 had raised over $40 million from Mousse Partners, Founder Collective and individual angels. Read more.
FIRMS & FUNDS
• Idinvest Partners is closing in on a €400 million final close for its third private equity secondaries fund, according to Private Equity International. The French firm, once an in-house investment unit of Allianz, also is targeting €700 million for a new private debt fund. Read more. www.idinvest-partners.com
• Novacap, a Canadian private equity firm, has closed its fourth fund with C$470 million in capital commitments. Read more.
• StepStone Group has agreed to acquire Swiss Capital Alternative Investments, a Zurich-based private debt and hedge fund advisory and management firm with around $5 billion in assets under management. Read more.
MOVING IN, ON & UP
• Gaurang Vyas has joined FocusPoint Private Capital Group as a senior managing director. He previously was a managing director with Enhanced Capital. www.fpcgllc.com
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