Yesterday we discussed how the timing of Jet.com’s acquisition by Wal-Mart could have negative tax implications for Jet.com’s venture capital investors. Three other Jet.com acquisition notes:
1. We’ve learned from multiple sources that the effective cash sale price works out to $9 per Jet.com share. That’s a nifty premium on the $4.9879 per share Series B-1 price (that was the deal that closed 11/24/15), and means a huge payday for Jet.com co-founder and CEO Marc Lore. Sources say that Lore currently holds more than 50 million shares, of which he’ll sell around 20% up-front, with the rest continuing to vest (per his agreement to take over all of Wal-Mart’s ecommerce operations, in addition to continuing to lead Jet). Moreover, Lore is theoretically in line to receive around two-thirds of the $300 million in potential stock earn-outs that are on top of the $3 billion cash sale price.
2. What that $9 per share price also means is that Eric Martin is in line for around $900,000 (pre-tax), not $20 million. Who is Eric Martin? He’s the bath installation guy who last year won a Jet.com contest about who could get the most new users to sign up for the service (he spent around $18k on ads). The prize was 100,000 shares — which some news reports suggested could be valued at upwards of $20 million. I’m thinking that Martin will still be okay with his 50x return on investment…
3. Much like with the Unilever/Dollar Shave Club situation from last month, discussions between Jet.com and Wal-Mart were about a strategic investment before they were about an acquisition. In fact, a minority equity deal was still being bandied about just days before that sale papers were signed (perhaps as part of a Series C round, which was planned for Q4). You also may recall that Wal-Mart had offered to buy Lore’s last company, Quidsi, for around $600 million — but Lore stuck with an agreement to sell to Amazon (which had engaged in very questionable competitive practices against the upstart). “The Quidsi executives stuck with Amazon, largely out of fear,” wrote author Brad Stone, in his 2013 book, The Everything Store. Wal-Mart also had expressed interest in participating in Jet’s Series A round, but it didn’t come to fruition.
No comment from Lore, Jet or Wal-Mart.
• Done deal: JDA Software, a provider of supply chain and retail management software, this morning announced a $570 million refinancing agreement with The Blackstone Group and existing majority owner New Mountain Capital. This appears to mean that JDA is no longer in talks to be acquired by Honeywell (for a reported $3 billion), although JDA CEO Bal Dail declined to comment on Honeywell during a call this morning. He did say that the deal will cut JDA’s annual interest payments by around $70 million per year.
• Recommended reading: Rothenberg Ventures, a small VC group focused primarily on AR/VR startups, appears to be imploding. TechCrunch has the details, including talk of employee departures, profligate spending and an apparent SEC investigation. Here you go.
• Have a great weekend!
THE BIG DEAL
• Apollo Global Management has formed a supply chain partnership with Nike Inc. (NYSE: NKE). The deal involves Apollo forming a new logistics platform that has acquired two companies ― apparel maker New Holland and embellishment/logistics business ArtFx ― for an undisclosed amount. Nike is not providing capital as part of the arrangement. Read more.
VENTURE CAPITAL DEALS
• Ecobee, a Toronto-based smart thermostat maker, has raised $35 million in new VC funding from the Amazon Alexa Fund, Thomvest and Relay Ventures. www.ecobee.com
• CellSavers, an on-demand mobile repair platform, has raised $15 million in Series A funding. Carmel Ventures led the round, and was joined by seed backer Sequoia Capital. www.cellsavers.com
• Heap, a San Francisco-based analytics infrastructure startup, has raised $11 million in Series A funding. NEA led the round, and was joined by Menlo Ventures and return backers SV Angel, Initialized Capital and Pear. www.heapanalytics.com
• Dexter, a New York-based bot building platform, has raised $2.3 million in seed funding. Rakuten Ventures led the round, and was joined by Social Starts and Betaworks. www.rundexter.com
• NVBots, a Boston-based developer of automated 3D printing solutions, has raised an undisclosed amount of Series A funding led by Woodman Asset Management. www.nvbots.com
• DevMynd, a Chicago-based digital innovation consulting firm, has raised an undisclosed amount of Series A funding from Motorola Solutions Venture Capital. www.devmynd.com
PRIVATE EQUITY DEALS
• AGI Holdings, a portfolio company of J.F. Lehman & Co., has acquired Aircraft Appliances and Equipment Ltd., a Canada-based provider of filtration systems, marine valves and tachometer generators to national defense departments. No financial terms were disclosed. www.jflpartners.com
• Arsenal Capital Partners has led a recapitalization of WIRB-Copernicus Group, a Princeton, N.J.-based provider of regulatory and ethical review services for human clinical research. No financial terms were disclosed for the deal, which also included an equity investment from MSD Capital. www.wgcclinical.com
• The Blackstone Group and New Mountain Capital have agreed to recapitalize JDA Software Group, a Scottsdale, Ariz.-based provider of supply chain and retail management software, via a $570 million equity investment. New Mountain is the company’s existing owner, and the deal comes as an alternative to a reported $3 billion purchase offer from Honeywell International (NYSE: HON). www.jda.com
• Gryphon Investors has acquired Smile Brands Group Inc., an Irvine, Calif.-based provider of support services to dental practices. Sellers include Welsh Carson Anderson & Stowe. No financial terms were disclosed. www.smilebrands.com
• LFM Capital has invested in Vektek LLC, a St. Joseph, Mo.-based maker of hydraulic clamps and related products used to secure parts during the metal cutting process associated with computer numeric control machining. No financial terms were disclosed. www.vektek.com
• TA Associates has acquired a minority stake in TCNS Clothing Co., a New Delhi-based branded women’s apparel platform. The deal is valued at $140 million. www.ta.com
• Vista Equity Partners has agreed to acquire a majority stake in Granicus, a Denver-based provider of government efficiency and transparency software, from K1 Investment Management. No financial terms were disclosed. www.granicus.com
• No IPO news today (which is becoming the default message in this space).
• Rakuten (Tokyo: 4755) has acquired the assets of Bitnet, a San Francisco-based bitcoin wallet startup. No financial terms were disclosed. Bitnet had raised in a $14.5 million Series A round in 2014 from Highland Capital Partners and Rakuten. Read more.
FIRMS & FUNDS
• Bridgeport Capital has acquired the private equity business of Australia-based Hawkesbridge Private Equity, in which it already held a majority interest. Hawkesbridge’s real estate investment business will remain independent. Read more.
• Darwin Ventures is raising upwards of $100 million for its fourth VC fund-of-funds, according to a regulatory filing. www.darwinvc.com
• Pejman Mar Ventures has rebranded as Pear, and closed on $75 million for its second seed-stage VC fund. Read more.
MOVING IN, ON & UP
• Prem Mohan Raj has joined British private equity firm NorthEdge Capital as chief financial officer. He previously was CFO for LivingBridge. www.northedgecapital.com
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