Some very quick notes, as there was way more deal news than usual for a Friday…
• Hmmmmm: In discussing the Dell-EMC merger financing earlier this week, I wrote: “Also important was that Michael Dell was contributing a whole lot of equity, thus better enabling the crossover rating and making this sort of structure unlikely to be repeated for a more traditional leveraged buyout.”
Part of the subtext here was that today’s private equity firms are loathe to club up, both because of resulting management confusion (remember SunGard?) and because LPs don’t like the layered exposure and varied fees when several of their GPs do the same deal (again, remember SunGard?). Sure there is some extra equity cheese from LP co-investors, but the continued hibernation of club deals is a big reason why the stock market boom hasn’t been matched by a series of mega-LBOs.
So it’s perhaps notable that today’s private equity deals section includes a possible $2.5 billion transaction that includes a four-firm private equity consortium (hoping to buy CenturyLink’s data centers business). It doesn’t necessarily mean anything beyond several firms believing that this is an unusual, one-off opportunity. And this is no mega-deal. Still, worth keeping an eye on…
• New firm alert: The Yard Ventures has launched as a venture capital firm focused on startups founded by Harvard University alumni (albeit without any formal relationship to the school). It also seeks to be funded by Harvard alums ($25k-$100k per investor), taking upwards of 99 each year (per its website).
TYV is led by co-founder Michael Madden, who previously was a managing director with Square 1 Bank. He is joined by fellow co-founder Michael Collins (CEO of Launch Angels, ex-TA Associates), vice president Erin Kutner McCafferty (former senior investment officer with the Massachusetts pension system) and New York-based “regional partner” Jason Klein (On Grid Ventures). Advisors include Weston Presidio co-founder Michael Cronin.
• Answer Key: Yesterday I asked you to name the CEO of a VC-backed e-commerce company (valued in the hundreds of millions of dollars) who was just booted as CEO? The correct answer is Deepak Agarwal, founder and CEO of Choxi.com (f.k.a. Nomorerack).
In short, it’s a gigantic mess. And if you need proof, almost everyone I called associated with the company directed me to the company’s general counsel. Seems that many vendors haven’t been paid for months — including the company’s outsourced customer service team, which is probably why no one picks up the phone on its customer service line — and the Internet is littered with user complaints about missing orders.
That lawyer, Cliff Schneider, confirmed that Agarwal — who has a fairly shady history — is no longer CEO, but he would not say if Agarwal remained on the board of directors. Schneider also says the company is now being managed by a group of individuals with a “good background in restructuring,” and that the company has “received a loan from current investors.”
Schneider wouldn’t identify either the new managers nor the investors, although lead outside back Oak Investment Partners (yes, this was an Ifty Ahemed deal) says that it did not participate and is no longer on the board. The attorney also wouldn’t confirm Agarwal’s past statements about the company’s profitability nor would he identify any current board members, simply saying that “private companies don’t need to discuss those things.”
Perhaps, but there’s also an argument that companies in the midst of such financial and management tumult should be transparent with their customers, from whom they keep collecting credit cards.
Emails to Agarwal were not returned, and his work voicemail is too full to accept new messages. Same goes for listed CFO Brian Sullivan.
• Personal note: I’ve heard that gaining wisdom is the best part of getting older. But, for me, it’s been getting to spend more time with my best friend. Happy 15th anniversary J… See you tonight.
• Have a great weekend… Go Pats!
THE BIG DEAL
• Roark Capital Group has agreed to acquire a majority stake in Jimmy John’s Sandwiches, a Champagne, Ill.-based fast-casual chain with more than 2,500 locations (mostly franchised) and $2 billion in system-wide sales. No financial terms were disclosed.
Sellers would include private equity firm Weston Presidio, which holds a 30% stake in the business. The remaining 70% is held by chain founder Jimmy John Liataud, who would remain company chairman. Read more.
VENTURE CAPITAL DEALS
• Didi Chuxing, the Chinese ride-hailing giant, has raised around $120 million in new funding from Taiwan’s Foxconn. Read more.
• BYJU, an Indian ed-tech startup, has raised $50 million in new VC funding at a reported $500 million valuation. The Chan Zuckerberg Initiative and Sequoia Capital co-led the round, and were joined by Sofina, Lightspeed Venture Partners and Times Internet Ltd. Read more.
• Chrono Therapeutics, a Hayward, Calif.-based digital drug therapy startup that is initially focusing on smoking cessation, has raised $47.6 million in Series B funding. Kaiser Permanente Ventures led the round, and was joined by Endeavour Vision, Xeraya Capital Labuan Ltd, Asahi Kasei, Emergent Medical Partners, Hikma Ventures, Cota Capital and Mission Bay Capital. www.chronothera.com
• Blackstorm, an app didstribution startup, has raised $33.5 million in new VC funding. Backers include Rakuten, Highland Capital Partners, Alsop Louie and individual angels. Read more.
• SessionM, a Boston-based mobile marketing automation and loyalty platform, has raised $35 million in growth equity funding. General Atlantic led the round, and was joined by Salesforce Ventures and return backers Causeway Media Partners, Charles River Ventures, Highland Capital Partners and Kleiner Perkins Caufield & Byers. www.sessionm.com
• Signifyd, a San Jose, Calif.-based provider of fraud protection for e-commerce businesses, has raised $19 million in third-round funding from TriplePoint Capital, American Express Ventures and return backer Menlo Ventures. Existing shareholders include Allegis Capital, IA Ventures and QED Investors. www.signifyd.com
• Vivasure Medical, an Ireland-based developer of bioabsorbable technology for percutaneous vessel closure, has raised $16.2 million in Series C funding. Life Sciences Partners led the round, and was joined by Evonik Venture Capital, Panakès Partners and return backer Fountain Healthcare Partners. www.vivasuremedical.com
• SmartAsset, a New York-based, has raised $12 million in Series B funding. IA Capital Group led the round, and was joined by TTV Capital, Contour Ventures, Javelin Venture Partners, New York Life, Transamerica Ventures and Fitz Gate Ventures. www.smartasset.com
• IDbyDNA, a San Francisco-based developer of metagenomic approaches for infectious disease identification, has raised $9 million in Series A funding. Artis Ventures led the round, and was joined by ARUP Laboratories. www.idbydna.com
• Away, a New York-based luggage startup, has raised $8.5 million in Series A funding. Global Founders Capital led the round, and was joined by Barry Sternlicht and return backers Forerunner Ventures, Accel Partners and Comcast Ventures. www.awayluggage.com
• Proov.io, a platform that connects enterprises to independent software vendors, has raised $7 million in Series A funding from Mangrove Capital Partners and OurCrowd. The company has offices in San Francisco and Israel. www.proov.io
• Shippo, a San Francisco-based provider of enterprise shipping services, has raised $7 million in Series A funding. Union Square Ventures led the round, and was joined by SoftTech VC and Version One Ventures. www.goshippo.com
• LiveStories, a Seattle-based data hub for government, has raised $3 million in seed funding. True Ventures led the round, and was joined by Founders’ Co-op, Social Leverage, Urban.us, the Knight Foundation. www.livestories.com
• Fluent City, a New York-based provider of foreign language and culture classes, has raised $2.5 million in new VC funding. Backers include Learn Capital, New Ground Ventures and 1776 Ventures. www.fluentcity.com
• Connected2Fiber, a Hopkinton, Mass.-based market participation SaaS platform for the telecom network industry, has raised $1.2 million in seed funding led by Nauta Capital. www.connected2fiber.com
PRIVATE EQUITY DEALS
• Bridge Growth Partners has acquired Finalsite, an East Hartford, Conn.-based learning and communications SaaS platform for K-12 and higher education institutions, from Spectrum Equity Management. No financial terms were disclosed. www.finalsite.com
• CenturyLink Inc. (NYSE: CTL) is in talks to sell its data centers business to a private equity consortium made up of GTCR, Charlesbank Capital Partners, Berkshire Partners and Stonepeak Infrastructure Partners, according to Reuters. BC Partners also has reported interest in the deal, which could garner around $2.5 billion. Read more.
• Fulcrum Equity Partners and Level Capital Partners have acquired CarePlus Medical Corp., an Athena, Ga.-based provider of outsourced anesthesia management and healthcare provider recruitment services to ambulatory surgery centers. No financial terms were disclosed. www.careplusmp.com
• Lone Star Funds is in talks to acquire American Bath Group, a Savannah, Tenn.-based maker of acrylic showers and tubs, from Sterling Group, according to Bloomberg. The deal could be valued at around $600 million. Read more.
• Oak Hill Capital Partners has completed its previously-announced acquisition of a majority stake in FirstLightFiber, a provider of fiber-optic bandwidth infrastructure services in New York and northern New England, from Riverside Partners (which retained a minority position). No financial terms were disclosed. www.firstlight.net
• Salt Creek Capital has acquired Pacific Paper, a Rancho Cucamonga, Calif.-based provider of paperboard sheets to the packaging and commercial printing industry. No financial terms were disclosed. www.pacificpaper.com
• White Deer Energy has acquired RockPile Energy Services LLC, a Denver-based provider of proppant transportation and chemical optimization services to oil and gas exploration and production companies primarily in the Williston and Permian Basins, from Triangle Petroleum Corp. (NYSE: TPLM). No financial terms were disclosed. www.rockpileenergy.com
• Coupa Software Inc., a San Mateo, Calif.-based corporate spend management platform, has filed for a $75 million IPO. It plans to trade on the Nasdaq under ticker symbol COUP, with Morgan Stanley serving as left lead underwriter. The company reports a $24 million net loss on around $60 million in revenue for the first half of 2016, compared to a $25 million net loss on $34.5 million in revenue for the year-earlier period. The company has raised over $160 million In VC funding from firms like Mohr Davidow Ventures (16.3% pre-IPO stake), Battery Ventures (16.2%), El Dorado Ventures (13.9%), BlueRun Ventures (12.7%), Crosslink Ventures (11.1%), ICONIQ (5.1%), Rally Ventures and T. Rowe Price. www.coupa.com
• Obalon Therapeutics Inc., a Carlsbad, Calif.-based developer of a balloon-based weight loss device, has filed for a $75 million IPO. It plans to trade on the Nasdaq under ticker symbol OBLN, with UBS listed as left lead underwriter. The company has raised over $75 million in VC funding from firms like Domain Associates (34.6% pre-IPO stake), InterWest Partners (21%), Bader Sultan & Bros. (8.8%), Opaki Venture Capital (7.7%), Axon Ventures, Mirae Asset Venture Investment, NeoPlux Co. and Striker Asia Opportunities Fund. www.obalon.com
• No exit news this morning.
• Bayer AG has retained JPMorgan to explore a sale of its dermatology business, which could be valued north of €1 billion, according to Bloomberg. The move comes as Bayer continues to pursue an acquisition of Monsanto Corp. (NYSE: MON). Read more.
• Enterprise Products Partners LP (NYSE: EPD) has ended its pursuit of a merger with rival pipeline operator Williams Cos. (NYSE: WMB). Read more.
• Glassdoor Inc., a Mill Valley, Calif.-based jobs and workplace review site, has acquired Brazilian peer Love Mondays for an undisclosed amount. Glassdoor has raised over $200 million in VC funding, from firms like Benchmark, Sutter Hill Ventures, T. Rowe Price, Battery Ventures, Google Capital, DAG Ventures and Tiger Global. www.glassdoor.com
FIRMS & FUNDS
• Nordic Capital is pre-marketing its next flagship buyout fund with a €3.5 billion target, according to Bloomberg. Read more.
MOVING IN, ON & UP
• Frederick Chung has joined Adams Street Partners as a principal on the firm’s private credit team. He previously was with Goldman Sachs. Also joining the group as an associate is Thomas Petty (ex-Morgan Stanley) and analysts Michael Allen (JPMorgan) and Emily Shiau (Alvarez & Marsal). www.adamsstreetpartners.com
• HCAP Partners (f.k.a. Huntington Capital) has promoted Nicolas Lopez to principal. He joined the private equity firm in 2013 from the corporate development group of Best Buy. www.hcapllc.com
• Brett Krause, former China president for J.P. Morgan Chase, is joining early-stage venture capital firm PurpleSky Capital. Read more.
• Whit Matthews has joined Aberdeen Asset Management as a senior investment manager. He previously was an investment director with SL Capital Partners. Aberdeen also promoted John Dickie to co-head of U.S. private equity. Both men are based in Boston. www.aberdeen-asset.com
• Scott J.R. Smith has joined Piper Jaffray as a Charlotte-based managing director of in the firm’s financial sponsors group. He previously was with Lazard. www.pjc.com
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