Some notes to kick off your Wednesday, which also is E’s first day of kindergarten. To put it in Term Sheet language, things at the home office have been several multiples above the Fed’s recommended guidance for chaos…
• M&A math: Boston Consulting Group this week released a new M&A report that suggests traders have shifted their attitudes toward the buy-side of M&A transactions. Specifically, it shows that the stocks of public acquirers climbed 0.5% in the seven days after announcing an acquisition. From the report:
“Capital markets have long greeted acquisition announcements with skepticism–and with good reason. Research, including our own, has consistently shown that most deals destroy value. But… markets in recent years have behaved differently than in the past and started bidding up shares of acquiring companies.”
Part of the explanation relates to cheap financing, but BCG also argues that acquirers have become much better at most-merger integrations.
• Today in Theranos: Our favorite beleaguered biotech apparently requested emergency clearance of a new blood test for Zika virus, but then pulled the application after “federal regulators found that the company didn’t include proper patient safeguards in a study.” Read more here.
• Thinking aloud: There was a Reuters report yesterday that the SEC is now looking into co-investment deals often struck between private equity firms and some of their largest LPs. Like with the accelerated management fee situation, this seems to be more about missing boilerplate on LP agreements than anything else. The existence of preferential co-investment deals for large LPs is no secret. In fact, it’s been loudly touted as a way to cut down on the big club deals that LPs objected to before the financial crisis. All of which makes me wonder…
If PE firms already are paying penalties to the SEC over accelerated management fee disclosures, and soon might do the same for co-investments, do they just pass the bills on to their fund formation lawyers? Seems like there is more than a bit of shared blame.
• Correction: Yesterday I noted that Uber CEO Travis Kalanick doesn’t have technical control of his company’s board of directors, but a source close to the situation now tells me that Kalanick does now have super voting rights. Apologies for the error.
• Motley VC: Morgan Housel has spent the past nine years as an investment columnist with The Motley Fool, while also writing for such publications as The Wall Street Journal. Now he’ll be plying his trade as a partner with Collaborative Fund, a seed-stage venture capital firm whose portfolio companies include Blue Bottle Coffee, Reddit and Thumbtack.
Housel is not making the leap from journalist to investor, as have others like Mike Moritz, M.G. Siegler and Om Malik. Instead, his role at Collaborative Fund will be to produce content like blog posts and podcasts and to share his economic insights with fund investors, portfolio companies and the broader public.
Yesterday I spent some time on the phone with Housel, and you can read the Q&A by going here.
THE BIG DEAL
• Genesys, a Daly City, Calif.-based provider of omnichannel customer experience and contact center solutions, has agreed to acquire Interactive Intelligence Group Inc. (Nasdaq: ININ), an Indianapolis-based provider of on-premise solutions for customer engagement, communications and collaboration. The deal is valued at approximately $1.4 billion in cash, or $60.50 per share (36% premium to the July 28 price, after which media reports emerged about IIG exploring strategic alternatives).
Permira and Technology Crossover Ventures hold a majority stake in Genesys, although they sold a minority position to Hellman & Friedman back in June for around $900 million. Read more.
VENTURE CAPITAL DEALS
• Compass, a New York-based online real estate buying, selling and renting platform, has raised $75 million in Series D funding. Wellington Management Co. led the round, and was joined by return backers IVP, Thrive Capital, Founders Fund and .406 Ventures. The company has now raised a total of $210 million. www.compass.com
• Velocity, a digital hospitality app, has raised $22.5 million in new VC funding led by DIG Investments. Read more.
• Mavrx, a San Francisco-based developer of aerial imagery technologies, has secured $12.42 million of a $17.08 million Series A round, according to a regulatory filing. Backers include Eclipse Ventures. •
• Cozy, a Portland, Ore.-based platform for interactions between property managers and renters, has raised $8.5 million in Series B funding. American Family Ventures led the round, and was joined by return backers like Social Capital and General Catalyst Partners. Read more.
• DailyPay, a New York-based startup that helps enable employees and contractors to receive daily payments, has raised $5 million in Series A funding. RPM Ventures led the round, and was joined by Draper Frontier and Inspiration Ventures. www.trydailypay.com
• Revuze, an Israeli startup that applies AI to both brand and product management, has raised $4 million in strategic seed funding. Backers include Nielsen, The NPD Group and TIC Group. www.revuze.it
• Tank Utility, a Boston-based provider of remote monitoring services for truck-delivered fuels, has raised $2.2 million in seed funding. Energy Foundry and Blue Fog Capital co-led the round, and were joined by Generac Power Systems, Bolt and individual angels. www.tankutility.com
• Cloud Technology Partners, a Boston-based provider of cloud application and infrastructure solutions for enterprise customers, has raised an undisclosed amount of Series C funding. Return backers include Rackspace, State Street Bank and Pritzker Group Venture Capital. www.cloudtp.com
• RxAdvance, a Southborough, Mass.-based pharmacy benefits management company, has raised an undisclosed amount of Series A funding from Oscar Salazar (Uber co-founder) and Walter Jin (Three Fields Capital). www.rxadvance.com
PRIVATE EQUITY DEALS
• The Blackstone Group is considering a takeover offer for German landlord OfficeFirst, which holds around €3.2 billion worth of commercial properties, according to Bloomberg. Read more.
• Clavis Capital Partners has made an investment in Alliance Tank Service LLC, a Cushing, Okla.-based provider of above-ground storage tank products for the agriculture, asphalt, industrial and petroleum industries. No financial terms were disclosed. www.alliancetankservice.com
• Clayton, Dubilier & Rice has agreed to acquire Drive DeVilbiss Healthcare, a Port Washington, N.Y.-based maker of medical devices like wheelchairs and respiratory equipment. Sellers include Ferrer Freeman & Co. No financial terms were disclosed, except that CD&R has obtained committed financing from Barclays, JPMorgan Chase, Citigroup, Capital One, National Association and HSBC Securities. www.drivemedical.com
• Equistone Partners Europe has acquired a majority stake in Roth Group, a Swiss provider of domestic and industrial fire protection productions, insulation and coatings. The seller was Ufenau Capital Partners. No financial terms were disclosed. www.rothgruppe.ch
• Investcorp is in talks to acquire a minority equity stake in Saudi healthcare analysis company Al Borg Medical Laboratories, according to Bloomberg. The deal could value Al Borg north of $270 million. Read more.
• Meridian General Capital has acquired PowderCoat Services, an Anaheim, Calif.-based production powder coater. No financial terms were disclosed. www.powdercoatservices.com
• There is no IPO news this morning.
• Quantum Energy Partners is considering a sale process for Jagged Peak Energy LLC, a Texas-based oil and gas E&P company, according to the WSJ. An outright could be valued at more than $2 billion, while Quantum also may persue an IPO. Read more.
• Vista Equity Partners is exploring a sale of Aptean Inc., an Alpharetta, Ga.-based enterprise software company it purchased out of bankruptcy in 2012 for around $250 million, according to Reuters. The deal could be valued at more than $1 billion (including debt), with Morgan Stanley managing the process. Read more.
• Freightos, a Hong Kong-based online freight marketplace, has acquired Spain-based WebCargoNet. No financial terms were disclosed, although TechCrunch reports that it’s “in the seven figure Euro range and is a mixture of cash and stock.” Freightos has raised over $20 million in VC funding from firms like Aleph Venture Capital, Annox Capital, Israel Cleantech Ventures MSR Capital and Sadara Ventures. Read more.
• JX Holdings Inc. (Tokyo: 5020), a Japanese oil refiner, has agreed to acquire smaller rival TonenGeneral Sekiyu KK (Tokyo: 5012) for approximately $3.4 billion. Read more.
• Potash Corp. (TSX: POT) confirmed a Bloomberg report that it is in advanced merger talks with fellow Canadian fertilizer company Agrium (TSX: AGU). The combined company could be valued at around $28 billion. Read more.
• Pusher, a London-based provider of cloud software that lets developers add real-time functionality to websites and apps, has raised $2.5 million in venture debt funding from SaaS Capital. Read more.
• Sony Pictures Networks has agreed to acquire the sports broadcasting business of India’s Zee Entertainment Enterprises Ltd. for $385 million. Read more.
• xMatters, a San Ramon, Calif.-based enterprise communications platform sponsored by JMI Equity, has secured $42 million in long-term debt financing from Golub Capital. www.xmatters.com
FIRMS & FUNDS
• CBPE Capital, a UK-based middle market private equity firm, has closed its ninth fund with £459 million in capital commitments. www.cbpecapital.com
• CITIC Capital of Hong Kong is targeting $250 million for its third Japan-focused private equity fund, according to Private Equity International. Read more. www.citiccapital.com
• Drive Capital has raised $300 million for its second Midwest-focused VC fund. www.drivecapital.com
• Unigestion has held a €177 million first close on its fourth private equity secondaries fund, according to Dow Jones. The total fund target is €300 million. www.unigestion.com
MOVING IN, ON & UP
• Paul Bramley has joined Pillarstone, the European credit platform affiliate of KKR, as chief operating officer. He previously was a partner and COO for British hedge fund Sand Grove Capital Management. www.kkr.com
• Marisa Lizak has joined Ethika Investments, a real estate private equity firm, as director of capital markets. She previously was an SVP and head of underwriting at Starwood Property Trust. www.ethikainvestments.com
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