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Term Sheet — Tuesday, July 5

Random Ramblings

Zenefits, the HR software startup whose former CEO has been accused of creating software that illegally sidestepped state regulators, last week slashed its valuation from $4.5 billion to $2 billion, in an unprecedented stock repricing that was designed to prevent its investors from demanding their money back and/or suing for fraud.

As part of the deal, Series C investors had their ownership stake increased from around 11% to 25%. Series A and Series B investors received “small adjustments to offset their dilution” (i.e., got crammed down a bit, but believe the trade-off might help salvage their investment). Current employees, save for top executives, received special stock grants to effectively be made whole.

So everyone is happy, moving on, and fully aligned with the mission of restoring Zenefits to its former glory.

Well, except some former employees.

If you worked at Zenefits and left prior to this agreement, there is a pretty good chance that you exercised your stock options. And, if so, you may have paid an exercise price that was tied to a $4.5 billion valuation that now both the company and its investors say was based on fraudulent information. Or perhaps based on an earlier valuation set by venture capitalists whose own holdings have since been modified. But unlike VCs or current employees, you’re not getting restitution.

Fortune has spoken to several corporate attorneys, who say these former employees likely have legal standing for rescission. What remains unclear, however, is how Zenefits plans to handle such claims, if they arise.

One option for Zenefits, of course, would be to fight them ― particularly if the options were exercised after the alleged fraud became publicly known, but before the repricing agreement. More likely, however, the company already has added up all of the possible claims, and has set aside a pot of money to repay ex-employees who qualify (perhaps at the exercise price).

“This is still a pretty young company so the number of people who left with a lot of vested stock isn’t probably too high,” says one attorney.

One key under this scenario, however, would be that former employees would need to actually make rescission claims, as there is no indication that Zenefits has proactively communicated such an offer.

Zenefits has not yet responded to requests for comment on the matter.

THE BIG DEAL

• Gores Group has agreed to acquire Twinkies maker Hostess Brands, and then take the company public via a reverse merger with a special purpose acquisition vehicle. Gores will pay $375 million in cash to Hostess shareholders like Apollo Global Management, while individuals like Gores Group founder Alec Gores and current Hostess backer C. Dean Metropoulos will invest another $350 million via a private placement. Read more.

VENTURE CAPITAL DEALS

• CStone Pharmaceuticals Co. Ltd., a Chinese pharma startup led by ex-Novartis exec Frank Jiang, has raised $150 million in Series A funding from Oriza Seed Venture Capital, Boyu Capital and WuXi Healthcare Ventures. www.wuxiventures.com

• Renivate, a San Francisco-based provider of hotel management software focused on guest experience personalization, has raised nearly $13 million in Series C funding. Sozo Ventures was joined by return backers Benchmark, Tenaya Capital, Formation 8, Northgate Capital, GC Hotel Tech, Tao Capital Partners and Industry Ventures. www.renivate.com

• Everplans, a New York-based online estate and legacy planning platform, has raised $6.4 million in Series A funding. Mousse Partners led the round, and was joined by Aegon, Transamerica Ventures and RGAx. www.everplans.com

• Theva, a Germany-based developer of high-temperature superconductors, has raised EUR 6.4 in second-round funding. eCapital led the round, and was joined by the Bavarian Growth Fund and return backers Target Partners and Bayerische Beteiligungsgesellschaft. www.theva.com

• Natural Cycles, a Swedish provider of fertility software, has raised $6 million in Series A funding. Bonnier Media Growth led the round, and was joined by seed backers Sunstone Ventures and e-ventures. Read more.

• Network Locum, a London-based provider of healthcare staffing and workplace management software, has raised £5.3 million in Series B funding led by BGF Ventures. Read more.

• Echobox, a London-based AI service for the digital publishing service, has raised $3.4 million in new VC funding. Mangrove Capital Partners led the round, and was joined by LocalGlobe. www.echoboxapp.com

• Zahroof Valves Inc., a Houston-based maker of valves for reciprocating gas compressors, has raised an undisclosed amount of Series C funding. Saudi Aramco Energy Ventures led the round, and was joined by return backer NGP Energy Technology Partners. www.zahroofvalves.com

PRIVATE EQUITY DEALS

• CVC Capital Partners has offered to acquire Nirvana Asia Ltd. (HK: 1438), a Malaysia-based funeral services company, for more than $900 million, according to the WSJ. Read more.

• GTCR has completed its acquisition of Optimal Blue, a Plano, Texas-based provider of loan program eligibility and pricing solutions, and has committed to invest up to $350 million (including possible add-on acquisitions). Sellers include Serent Capital. www.optimalblue.com

• Marlin Equity Partners has acquired Teradata Marketing Applications, a provider of marketing operations and execution software, from Teradata Corp. (NYSE: TDC). No financial terms were disclosed. www.marlinequity.com

• Norvestor Group has agreed to acquire Eneas Group, a provider of corporate energy services to small and medium sized enterprises in the Nordic region, from Palamon Capital Partners for approximately EUR 80 million. www.eneasenergy.com

• Olympus Partners has acquired AmSpec Holding Corp., a Cranbury, N.J.-based provider of testing, inspection and certification services for petroleum traders and refiners. No financial terms were disclosed. Sellers include Incline Equity Partners. www.amspecllc.com

• Partners Group is leading a buyout of Foncia, a French provider of residential property services, from Bridgepoint and Eurazeo. No financial terms were disclosed. Other members of the buying consortium include Caisse de dépôt et placement du Québec and CIC Capital Corp. No financial terms were disclosed. Foncia reports EUR 700 million in 2015 revenue and a management portfolio of more than 1.8 million properties. www.foncia.com

• Royal Adhesives & Sealants LLC, a South Bend, Ind.-based portfolio company of American Securities, has acquired Bacon Adhesives, an Irvine, Calif.-based maker of electrically and thermally-conductive adhesives. No financial terms were disclosed. www.royaladhesives.com

• Thoma Bravo has agreed to acquire Trader Corp., a Canadian provider of auto dealer advertising solutions, from Apax Partners for approximately C$1.575 billion (including debt). www.thomabravo.com

• Transport Holdings LLC, a Pittsburgh-based portfolio company of Revelstoke Capital Partners, has acquired Jones Motor Group, a Limerick, Penn.-based provider of asset-light transportation solutions like carrier and hot shot trucking services. No financial terms were disclosed. www.jonesmotor.com

IPOs

• AdvancePierre Foods Holdings, a Blue Ash, Ohio-based maker of ready-to-eat sandwiches and related products for retail and foodservice customers, has set its IPO terms to 18.6 million shares being offered at between $20 and $23 per share. It would have an initial market cap of around $1.69 billion, were it to price in the middle of its range. AdvancePierre reports $46 million of net income on $1.6 billion in revenue for 2015, and is owned by Oaktree Capital Management. It plans to trade on the NYSE under ticker symbol APFH, with Barclays listed as left-lead underwriter. www.advancepierre.com

• FOTV Media Networks, a Beverly Hills, Calif.-based provider of live TV streaming services, has filed for an IPO of 3.75 million shares being offered at $8 per share. It plans to trade on the Nasdaq under ticker symbol FOTV, with Bonmark Capital Partners and Network 1 Financial Securities serving as co-lead underwriters. The company reports a $6 million net loss on $3.5 million in revenue for Q1 2016. www.fotv.filmon.com

• Kinsale Capital Group, a Richmond, Va.-based specialty insurer focused on the excess and surplus lines market, has filed for a $100 million IPO. It plans to trade on the Nasdaq under ticker symbol KNSL, with J.P. Morgan and William Blair serving as lead underwriters. The company reports $5.3 million of net income on around $33 million in revenue for Q1 2016. Shareholders include Moelis Capital Partners.

• YETI Holdings Inc., an Austin, Texas-based outdoor and recreation products maker owned by Cortec Group, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol YETI, with BofA Merrill Lynch and Morgan Stanley serving as co-lead underwriters. The company reports a $38 million net loss on $191 million in revenue for Q1 2016. www.cortecgroup.com

EXITS

• 3i Group has hired Jefferies Group to find a buyer for OneMed Group, a Finland-based medical supplies distributor, according to Bloomberg. A sale could be worth upwards of EUR 500 million. Read more.

• 3i Group has sold its minority equity stake in GEKA, a German maker of cosmetic brushes, to Sulzer Ltd. (Swiss: SUN) for EUR 102 million (overall deal valued at EUR 260 million). Read more.

• L Catterton has hired Rothschild & Co. and Morgan Stanley to explore options for Ferrara, an Oakbrook Terrace, Ill.-based candy maker, according to Bloomberg. The company reportedly could be valued at around $2 billion in an IPO or sale (including $1 billion in debt). Read more.

• Permira has agreed to sell Intelligrated, a Mason, Ohio-based provider of fulfillment solutions, to Honeywell (NYSE: HON) for $1.5 billion in cash. Losing bidders reportedly include Toyota Industries Corp. (Tokyo: 6201). Permira had acquired the company in 2012 for approximately $500 million. www.intelligrated.com

OTHER DEALS

• China International Capital Corp. (HK: 3908) is in merger talks with China Investment Securities, according to Bloomberg. The combined companies would have around $28 billion in assets. Read more.

• Deutsche Telekom (DB: DTE) is preparing to sell thousands of mobile towers in Germany for upwards of EUR 5 billion, according to Reuters. Goldman Sachs and Morgan Stanley are managing the process. Read more.

• National Bank of Abu Dhabi and First Gulf Bank have won board approval for a merger that will create a Middle Eastern bank with $175 billion in assets under management. Read more.

• Voith has agreed to sell its 25.1% stake in German robot maker Kuka (DB: KU2) to China’s Midea for approximately EUR 1.2 billion. Read more.

FIRMS & FUNDS

• HQ Capital (f.k.a. Auda), a German private equity firm focused on small and mid-sized companies, has closed its seventh fund with $375 million in capital commitments. www.hqcapital.com

• Monsanto and Microsoft announced a joint partnership to invest in Brazilian agricultural technology startups. Read more.

• Via Venture Partners, a VC and private equity firm focused on Nordic tech companies, has raised around $150 million for its third fund. Limited partners include Danish pension funds PFA and ATP. www.viaventurepartners.com

MOVING IN, ON & UP

• Marc Bolland, former CEO of retailer Marks & Spencer, has agreed to join The Blackstone Group as head of European private equity portfolio operations. Read more.

• Richard Boyle has joined VC firm Canaan Partners as a partner. He previously was chairman and CEO of LoopNet, before it was acquired in 2012 for around $900 million by CoStar Group (Nasdaq: CSGP). www.canaan.com

• Michael Gilbert has joined PJT Partners as a managing director, according to his LinkedIn profile. He previously was with Credit Suisse as an investment banker focused on media deals. www.pjtpartners.com

• The Indiana Pubic Retirement System has promoted Scott Davis from deputy chief investment officer to CIO, and private equity director Bo Ramsey to deputy CIO. The moves follow last fall’s departure of CIO David Cooper, who left to join the Perdue Research Foundation. Read more.

Steven Whitaker has joined European private equity firm Equistone Partners as chief operating officer. He previously was COO with Vision Capital. www.equistonepe.com

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