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Term Sheet — Friday, September 23

Random Ramblings

Yahoo yesterday confirmed that information from at least 500 million user accounts was stolen in 2014, by what it is calling a “state-sponsored actor.” This could create a problem for the company’s recent agreement to be acquired by Verizon for $4.8 billion.

The Verizon-Yahoo merger documents include fairly standard material breach language, and the whole thing is governed by a state, which basically means that Verizon cannot bail on the deal because of changes in external factors like global political conditions. It also cannot terminate because Yahoo misses financial projections (either internal or external).

Verizon could, however, claim a material breach for something like this data hack, by arguing that the event has caused irreparable harm to Yahoo in terms of customer trust and usage. Moreover, the NY Times reports that remediation for such a hack could ultimately cost more than the $4.8 billion Verizon is paying for Yahoo.

Nonetheless, it’s crazy tough sledding to get Delaware to accept a MAC argument, particularly given that evidence of reduced usage and related revenue declines, for example, would not be immediately available for quite some time. Theoretically possible, but Verizon would be more likely to use the threat of court action to renegotiate its original agreement.

A larger problem, however, relates to what Yahoo knew and when it knew it.

Verizon claims Yahoo only informed it of the breach within the past two days (i.e., not before the merger agreement was signed). But the the first possible public report of this breach came out one week after the merger sub was signed, with Yahoo saying it was “aware” of the claims.

That means, in order to have not breached its warranties and representations to Verizon, Yahoo either: (a) Must have first learned of the 500 million account hack after July 23 (merger sub signed), but before August 1 (first public hack report); or (b) This is a different hack.

On that last point, Yahoo is currently playing coy.

In a statement, Verizon only would say that it “will evaluate as the investigation continues.”

• Answer Key: Yesterday we asked you to name the “unicorn” that just held a closing dinner for its latest mega-funding, even though the entire deal isn’t entirely closed? The answer was Airbnb, and you can find more info below in the Big Deal section.

• Scam update: Dozens more of you write in yesterday to say that you were contacted as part of the VC/recruiting scam we reported on yesterday. It’s also worth noting that the Australian freelancer who was contracted to write the resume blog post we cited (via online marketplace UpWork) now tells me that the job was offered by “Muneeb Ashfraf.” That’s the same person who paid for Sienna Ventures and Asenqua Ventures press releases, and who was identified in the WHOIS directory for one of the “recruiting firm” websites. Still unclear, however, if it’s a pseudonym.

• Gametime: We have three “sponsored” spots available for our charity softball game, which takes place this coming Monday afternoon at Fenway Park in Boston. Two are being generously donated by Golub Capital, and one is from an anonymous donor.

To win a spot, we are holding a caption contest to this photo:

stumpf

If you cannot see the image, I’ve also posted it via Twitter. Simply tweet your caption with the hashtag #TermSheet, and I’ll pick the winners by tomorrow morning.

• Have a great weekend!

THE BIG DEAL

• Airbnb has raised $555 million in new equity funding at a $30 billion valuation, co-led by Google Capital and Technology Crossover Ventures (neither of which received board seats). Most other investors in the round are new to the company.

Airbnb continues to fundraise, with plans to raise upwards of $850 million via this round. The company also has completed a secondary offering that generated liquidity for early shareholders (mostly employees). Read more.

VENTURE CAPITAL DEALS

• Linio, an ecommerce marketplace for Latin America, has raised $55 million in new VC funding. Backers include LIV Capital, Northgate Capital and Kinnevik. Read more.

• Gfycat, a user-generated content platform, has raised $10 million in seed funding. Alsop Louie Partners led the round, and was joined by Pear Ventures, StartX Fund andYou and Mr. Jones. Read more.

• Anodot, an Israel-based business incident detection and analytics startup, has raised $8 million in new VC funding. Aleph Venture Capital led the round, and was joined by Disruptive Technologies. www.anodot.com

• Aceable, an Austin, Texas-based mobile app for driver’s ed, has raised $4 million in Series A funding co-led by Floodgate and Silverton Partners. Read more.

• Cyclica, a Toronto-based in silo drug discovery company, has raised C$2.4 million in Series A1 funding. GreenSky led the round, and was joined by the China Canada Angel Alliance. www.cyclicarx.com

• Collaborative Solutions, a Reston, Va.-based “business transformation consultancy,” has secured an undisclosed amount of growth equity funding from WestView Capital Partners. www.collaborativesolutions.com

PRIVATE EQUITY DEALS

• Accruent, an Austin, Texas-based provider of real estate, facilities and asset management software, has acquired Verisae Inc., a Minneapolis-based provider of IoT cloud software that that connect facilities and assets to maintenance and service networks. No financial terms were disclosed. Accruent is a portfolio company of Genstar Capital, while Verisae had been backed by Marlin Equity Partners. www.accruent.com

• Advent International is the leading bidder for Morpho, the biometric security unit of Safran SA (Paris: SAF), with an offer of around $2.7 billion, according to Bloomberg. Rival bidders include Gemalto NV and unidentified buyout firms. Read more.

• Cinven has short-listed four private equity firms in the auction for portfolio company SLV, a German maker of technical lighting products that could be valued at between €750 million and €850 million, according to Reuters. The suitors are: Ardian, 3i Group, Lone Star Funds and Triton Private Equity. Read more.

• Hilco Vision, a Plainville, Mass.-based eye care solutions company owned by Blue Point Capital Partners, has acquired Dutch companies Optiplus and Proteye. No financial terms were disclosed for either deal. www.hilco.com

• Housatonic Partners has acquired Accurate Monitoring LLC, a Fairfield, N.J.-based provider of intraoperative neurophysiological monitoring services to hospitals and surgical groups. No financial terms were disclosed. www.accuratemonitoring.com

• J.C. Flowers & Co. has agreed to acquire a control stake in ELMC Group LLC, a New York-based underwriter of medical stop-loss insurance, for an undisclosed amount. In conjunction with the deal, ELMC will acquire IOA Re Inc. of East Norriton, Penn. www.elmcgroup.com

• Millstein & Co. has acquired Huntington Foam, a Jeanette, Penn.-based maker of custom shape-molded foam and packaging solutions. No financial terms were disclosed. www.huntingtonfoam.com

• Shanhai Capital has agreed to acquire Analogix Semiconductor Inc., a Santa Clara, Calif.-based maker of semiconductors for digital multimedia market, for over $500 million. Analogix had raised around $90 million in VC funding from firms like Woodside Fund, DCM Ventures, Globespan Capital Partners, JAIC America, Yet2Ventures, Samsung Venture Investment and Western Technology Investment. Read more.

IPOs

• AC Immune SA, a Swiss biopharma company focused on developing treatments for neurodegenerative diseases associated with protein misfolding, raised $66 million in its IPO. The company priced 6 million shares at $11 per share (low end of $11-$13 range), for an initial market cap of around $609 million. It will trade on the Nasdaq under ticker symbol ACIU, while Credit Suisse, Jefferies and Leerink Partners served as underwriters. Shareholders include Dievini Hopp BioTech (37.7% pre-IPO stake). www.acimmune.com

• Apptio, a Bellevue, Wash.-based provider of cloud-based technology business management software, raised $96 million in its IPO. The company priced 6 million shares at $16 per share (above $13-$15 range), for an initial market cap of approximately $597 million. It will trade on the Nasdaq under ticker symbol APTI, while Goldman Sachs was listed as left lead underwriter. Apptio reports a $14.9 million net loss on nearly $76 million in revenue for the first half of 2016, compared to an $18.4 million net loss on $62 million in revenue for the year-earlier period. It has raised around $136 million in total VC funding from firms like Greylock Partners (16.5% pre-IPO stake), Madrona Venture Group (16.6%), Shasta Ventures (9.5%), Janus Capital, Hillman Co., T. Rowe Price Group and Andreessen Horowitz. www.apptio.com

• Coupa Software Inc., a San Mateo, Calif.-based corporate spend management platform, has set its IPO terms to 6.7 million shares being offered at between $14 and $16 per share. It would have an initial market cap of approximately $711 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol COUP, with Morgan Stanley serving as left lead underwriter. Apptio 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. It 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

• Lufax, a Chinese online lender most recently valued at $18.5 billion by VCs, is in talks with four banks ― CITIC Securities, J.P. Morgan, Citigroup and Morgan Stanley ― about leading its Hong Kong IPO, according to Reuters. Read more.

• Valvoline Inc., a Lexington, Ky.-based branded automotive lubricant company being spun out by Ashland Inc. (NYSE: ASH), raised $660 million in its IPO. The company priced 30 million shares at $22 per share ($20-$23 range), for an initial market cap of approximately $4.4 billion. It will trade on the NYSE under ticker symbol VVV, while BofA Merrill Lynch, Citigroup and Morgan Stanley served as underwriters. Valvoline reports $133 million of net income on $936 million in revenue for the six months ending March 31, 2016, compared to $90.5 million of net income on $973 million in revenue for the year-earlier period. www.valvoline.com

EXITS

• Bain Capital is considering a sale process for Consolidated Container Co., an Atlanta-based packaging company that could be valued at more than $1.5 billion, according to Bloomberg. Read more.

• GCT Global Container Terminals Inc., a North American marine container terminal operator owned by Ontario Teachers’ Pension Plan, has hired Macquarie and CIBC to review strategic options that could include a sale of the business, according to Reuters. The company reportedly could be worth more than $4 billion. Read more.

• Hill-Rom (NYSE: HRC) has acquired Tridien Medical, a Coral Springs, Fla.-based maker of patient positioning and other medical devices, from Compass Diversified Holdings for an undisclosed amount. www.tridien.com

OTHER DEALS

• Apple (Nasdaq: AAPL) has acquired India-based machining learning startup Tuplejump for an undisclosed amount. Read more.

• Cisco Systems, IBM and Forcepoint (owned by Vista Equity Partners and Raytheon) all are considering bids for Imperva (NYSE: IMPV), a Redwood Shores, Calif.-based online security company currently valued at around $1.4 billion. Read more.

• Cogobuy Group (HK: 400), an e-commerce service platform for the Chinese electronics manufacturing industry, in says that it has raised $260 million in new equity funding from Lindeman Asia Investment, China’s National Council for Social Security Fund and China Reinsurance Corp. The deal is in exchange for a stake of at least 10%. Read more.

• Dalian Wanda Group Co. is in talks to collaborate on movie projects with Sony Corp.’s film unit, Bloomberg. Read more.

• Shanghai Electric Power Co. is the leading bidder for a control stake in $2.4 billion Pakistani utility K-Electric Ltd., according to Bloomberg. Read more.

FIRMS & FUNDS

 Signia Venture Partners has closed its second early-stage tech VC fund with $85 million in capital commitments. Read more.

MOVING IN, ON & UP

• Grupo BTG Pactual SA has named Renato Mazzola as managing director for private equity investments, replacing Marcelo Hallack, according to Reuters. Mazzola currently serves as the Brazilian investment bank’s head of proprietary infrastructure investing. Read more.

• Sarah Hodges has joined Boston-based VC firm Pillar Companies as a partner. She is the co-founder of Intelligent.ly, and also has spent several years as an advisor to Flybridge Capital Partners. www.pillar.vc

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