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Term Sheet — Monday, June 13

Random Ramblings

Today’s big deal is that Microsoft has agreed to buy LinkedIn for $26.2 billion in cash, including around $3 billion of cash on hand, or $196 per share. The news broke as I was putting together Term Sheet, so just a few gut reactions before digging in a bit deeper (and listening to the 11:45am call):

1. Impressive job on both sides of this transaction, in terms of keeping it secret. Not even a strategic Sunday night leak. On the other hand, it does look like there was some serious options trading on LinkedIn stock last Friday…

2. This will be the largest-ever M&A deal for an Internet company, topping Facebook’s purchase of WhatsApp. It also may be considered the third-largest “tech” acquisition of all time ― following Dell/EMC and HP/Compaq ― so long as you exclude cable/telecom deals. There also is the question about how you value Dell’s own take-private, given the recent Delaware ruling that the $24.4 billion deal undervalued Dell shares by 22%, but that one makes my brain hurt too much to parse.

3. LinkedIn CEO Jeff Weiner will continue to run the business, reporting to Microsoft CEO Satya Nadella. LinkedIn co-founder and chairman Reid Hoffman (who’s also a partner at VC firm Grerylock) said in the press release that he will vote his shares for the deal, but there is no mention of an ongoing role for him at Microsoft.

4. This is the third large tech acquisition of the past week, following Vista Equity buying Marketo and last night’s announcement that Symantec will purchase Blue Coat Systems. Seems to me that we’re finally getting to the point where both strategic and financial buyers believe assets are under-priced (save for the asking prices of certain stubborn unicorns). Remember, LinkedIn was trading above this purchase price until the middle of January.

• Speaking of Blue Coat: My understanding is that Bain Capital was fully intending to take the cybersecurity company public, as evidenced by the 12 investment banks listed on its latest S-1 filing. In other words, Bain was not running a parallel process ― not even making outbound calls to other third-parties after receiving the first inbound interest from Symantec a couple of months ago.

THE BIG DEAL

• Microsoft Corp. (Nasdaq: MSFT) has agreed to acquire LinkedIn Corp. (NYSE: LNKD) for $26.2 billion in cash, or around $196 per share. That represents a 49.53% premium over Friday’s closing price, and represents its highest share price since mid-January. LinkedIn CEO Jeff Weiner will continue to lead the business, reporting to Microsoft CEO Satya Nadella. Read more.

VENTURE CAPITAL DEALS

• Didi Chuxing, the Chinese ride-hailing giant, has raised $605 million in new funding from China Life Insurance (and existing Uber backer), which includes $300 million in equity and around $305 million in long-term debt. Read more.

• Meta, a Redwood City, Calif.-based augmented reality startup, has raised $50 million in Series B funding. Backers include Horizons Ventures Limited, Lenovo, Tencent, Banyan Capital, Comcast Ventures and GQY. www.metavision.com

• Alpine Immune Sciences Inc., a Seattle-based developer of an immune system modulation platform, has raised $48 million in Series A funding. OrbiMed Advisors led the round, and was joined by return backers Frazier Healthcare Partners and Alpine BioVentures. www.alpineimmunesciences.com

• FinLeap, a German fintech incubator, has raised €21 million in new VC funding at a €121 million post-money valuation, according to TechCrunch. Return backer HitFox Group was joined by Hannover Re. Read more.

• Ascend Consumer Finance Inc., a Los Angeles-based online lender, has raised $11 million in new VC funding. Backers include Mucker Capital, OCA Ventures, Partech Ventures, Tekton Ventures, Cendana Investments and Securian Financial Group. www.AscendLoan.com

• Tapp Commerce, a Finland-based mobile payment app, has raised $9 million in Series A funding from Australia-based Amma Private Equity. Read more.

• VMob, a San Francisco-based personalization platform for retailers and quick-serve restaurants, has raised $2.3 million in VC funding from Vix Investments Ltd. www.vmob.com

• AiVita Biomedical, an Irvine, Calif.-based developer of a stem cell-based skin care product, has raised $2 million in Series A funding from California Technology Ventures. www.aivitabiomedical.com

• Cycle Computing, a Stamford, Conn.-based startup that leverages public cloud resources for high-performance computing jobs like drug research and complex quantitative financial applications, has raised its first round of outside funding from WorldQuant Ventures,  the investment arm of hedge fund Millennium Management, according to Fortune. No financial terms were disclosed. Read more.

PRIVATE EQUITY DEALS

• Symantec (Nasdaq: SYMC) has agreed to acquire Blue Coat Systems, a Sunnyvale, Calif.-based cybersecurity company that had been in registration for an IPO, for approximately $4.65 billion. Blue Coat owner Bain Capital, which acquired the company last year for $2.4 billion, will purchase $750 million of convertible notes in Symantec, while existing Symantec shareholder Silver Lake will double its exposure via the purchase of $500 million worth of 2% convertible notes. Read more.

• Agic Capital has acquired Gimatic SpA, an Italian maker of robotic end-of-arm tools. No pricing terms were disclosed, but the FT puts the deal value at between €100 million and €150 million. Read more.

• Anju Software, a Chicago-based life sciences enterprise software platform, has acquired Online Business Applications, a Woodridge, Ill.-based provider of medical communication systems and drug safety compliance software. As part of the transaction, Anju raised an undisclosed amount of new growth equity funding from Providence Equity Partners. www.irmsonline.com

• Bain Capital, KKR and MBK Partners are among the bidders for a 41% stake auto parts supplier Calsonic Kansei, which is being offered by Nissan Motor at an enterprise value of around $2.8 billion, according to Nikkei. Read more.

• CVC Capital Partners, KKR and TPG Capital are among those invited to submit bids for the telecom unit of Wharf Holdings Ltd. (HK: 4), which could be worth more than $1 billion, according to Reuters. Read more.

• Olympus Partners has acquired Ennis-Flint, a Thomasville, N.C.-based maker of road paints, from Brazos Equity Partners. No financial terms were disclosed, although an earlier Reuters report suggested the sale price could be around $1 billion. www.ennistraffic.com

• The U.S. Justice Department has sued to block Cision, a PR software maker owned by GTCR, from buying PR Newswire Association from UBM PLC (LSE: UBM) for $841 million. Read more.

IPOs

• Gemphire Therapeutics Inc., a Northville, Mich.-based developer of therapies for the treatment of dyslipidemia, has set its IPO terms to 3.75 million shares being offered at between $11 and $13 per share. It would have an initial market cap of approximately $110 million, were it to price in the middle of its range. The pre-revenue company  plans to trade on the Nasdaq under ticker symbol GEMP, with Jefferies and Cowen & Co. serving as lead underwriters. Shareholders include Pfizer (10.9% pre-IPO stake). www.gemphire.com

• The Lotte Group has abandoned a planned IPO of its hotel unit that might have raised upwards of $4.5 billion. The move comes just days after South Korean prosecutors widened an existing probe into the Korean conglomerate, which has been suspected of embezzlement. Read more.

• Twilio, a San Francisco-based provider of cloud communications software, has set its IPO terms to 10 million shares being offered at between $12 and $14 per share. It would have an initial market cap of approximately $1.07 billion, were it to price in the middle of its range. The company plans to trade on the NYSE under ticker symbol TWLO, with Goldman Sachs and J.P. Morgan serving as co-lead underwriters. Twilio has raised around $240 million in VC funding, most recently at a $1.03 billion post-money valuation. Read more.

EXITS

• MedData Inc., a unit of MedNax (NYSE: MD), has acquired Cardon Outreach LLC, a The Woodlands, Texas-based provider of revenue cycle management services for hospitals and healthcare systems, from Serent Capital. No financial terms were disclosed. www.cardonhealthcare.com

OTHER DEALS

• No other deals this morning.

FIRMS & FUNDS

• Andreessen Horowitz has closed its fifth flagship VC fund with approximately $1 billion in capital commitments. The Menlo Park, Calif.-based firm also secured another $500 million for a parallel “overage” fund. Read more.

• Better Capital, a UK-based turnaround firm founded in 2009 by Jon Moulton, is not planning to raise another fund. Read more.

• Ares Management has closed its third European direct lending fund with €2.5 billion in capital commitments. www.ares.com

MOVING IN, ON & UP

• Daphne Dufrense is leaving RLJ Equity Partners, where she was a managing director and co-founding partner. She will continue to serve as a special advisor to the firm, but says that she wants to “pursue smaller, higher-growth companies which are outside of the investment scope of RLJ.” www.rljequitypartners.com

• Michael Klein has joined Harvest Partners as an advisor. He currently is vice chairman of the Automotive Aftermarket Industry Association, and is set to become chairman later this year. www.harvestpartners.com

• Jim Prentice, the former premier of Alberta, has joined Warburg Pincus as an industry advisor to its energy group. Prentice also served as vice chair and senior EVP of the Canadian Imperial Bank of Commerce. www.warburgpincus.com

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