Greetings from New York City, where I’m in town for a few days of meetings and random events. Some quick notes to kick off your Tuesday…
• Deal data: Global M&A totaled $2.4 trillion over the first nine months of 2016, marking a 22% dip from the same period in 2015, according to Thomson Reuters. Included in this was a 32% decrease in U.S. deal-making activity, and a 27.62% decline in private equity-backed deals.
The only bright spot was that the negative trendline decelerated slightly in Q3. Global M&A and private equity deals both were down from Q2, but off “only” 20.1% and 26% from Q3 2015.
Actually, that’s not quite true. Another positive arguably was for bankers, who have seen M&A fees fall just 7% in 2016, despite the aforementioned 22% deal decrease. Apparently Wall Street not only can decouple itself from Main Street, but also from Wall Street…
• Personnel scoop: Scott Jacobson has quietly stepped down as a private equity portfolio manager with the California Public Employees’ Retirement System (CalPERS), in order to lead private investments for Lockheed Martin Investment Management Co. (the $30+ billion) employee pension system of Lockheed Martin). He had joined CalPERS in 2010, and most recently led the group responsible for underwriting new investments.
• Political point: As a quick follow-up to our recent carried interest conversation… Yes, both major presidential candidates are promising to change the tax treatment of carried interest. But it’s worth remembering that Barack Obama promised to do the same, and he didn’t pull it off after eight years in office. My basic point is that Paul Ryan’s feelings on this arguably will have more impact than those of either Hillary Clinton or Donald Trump.
• Video flashback: One of today’s private equity deals is that PE-backed ThreeSixty Group is buying the iconic FAO Schwarz brand assets from PE-backed Toys “R” Us.
I interviewed Toys “R” Us CEO Dave Brandon (ex-Domino’s CEO, ex-AD at U Mich) during Fortune Brainstorm Tech over the summer, and you can watch the full interview by going here.
• Both things can be true: We seem to be learning two things about the anemic 2016 IPO market (just 74 U.S. listings so far).
First, VC-backed tech issues (e.g., Nutanix, Twilio, etc.). have actually performed pretty well, which would seem to put the lie to unicorn CEOs who say they can’t go public due to uncertain market conditions. Overall, however, IPO aftermarket performance has been pretty lousy. Renaissance Capital’s float-weighted index of U.S. IPO performance shows just a 1.1% return so far this year, which comes in well below the 5.7% return from the S&P 500.
THE BIG DEAL
• Salesforce (NYSE: CRM) has agreed to acquire Krux, a San Francisco-based platform for tracking digital signatures across devices, for upwards of $700 million in cash ($340m) and stock. Krux had raised over $48 million in VC funding (most recently at a $136 million post-money valuation in 2014), from firms like Accel Partners, IDG Ventures, Sapphire Ventures, Temasek, Time Warner Investments and Visionairre Ventures. Read more.
VENTURE CAPITAL DEALS
•Apttus, a San Mateo, Calif.-based provider of quote-to-cash solutions, has raised $88 million in Series D funding. GII led the round, and was joined by K1, ICONIQ Capital and KIA.
• GoEuro, a Berlin-based travel platform for trains, buses and flights across Europe, has raised $70 million in new equity funding co-led by Silver Lake Kraftwerk and Kleiner Perkins Caufield & Byers. www.goeuro.com
• Rover.com, a Seattle-based network of pet sitters and dog walkers, has raised $40 million in Series E funding. Foundry Group and Menlo Ventures were joined by fellow return backer Madrona Venture Group. www.rover.com
• Social Tables, a Washington, D.C.-based provider of web-based SaaS solutions for hospitality professionals, has raised $13 million in Series B funding. QuestMark Partners led the round, and was joined by return backers Bessemer Venture Partners, Thayer Capital, Fortify Ventures and Middleland Capital. www.socialtables.com
• Eatigo, a discount restaurant booking service for Southeast Asia, has raised $10 million in equity funding from TripAdvisor (Nasdaq: TRIP). Read more.
• Grana, a Hong Kong-based online fashion retailer, has raised $10 million in Series A funding. Alibaba led the round, and was joined by return backers Golden Gate Ventures and MindWorks Ventures. Read more.
• Restless Bandit, an automated resume sorting startup, has raised $8 million in Series A funding from GGV Capital and Toba Capital. Read more.
• Source(d), a Spanish startup that leverages AI for matching developers with jobs, has raised $6 million in Series A funding from firms like Otium Venture and Sunstone Capital. Read more.
• Anchore, a software container security startup, has raised $5 million in seed funding, according to Fortune. Backers include Doug Carlisle (Menlo Ventures) and Andreas von Blottnitz (ex-Citrix). Read more.
• Tannico, a Milan-based wine retailer, has raised €3.8 million in Series A funding led by Italian venture firm P101. Read more.
• Roomex, a Dublin, Ireland-based hotel booking platform for business travelers, has raised €3.5 million in Series A funding led by Frontline Ventures. www.roomex.com
• Slice Labs Inc., a New York-based on-demand insurance platform for the on-demand market, has raised an undisclosed amount of new funding from Munich Re / HSB Ventures. The company previously announced $3.9 million in seed funding co-led by Horizons Ventures and XL Innovate. www.slice.is
• Stripe, a San Francisco-based online payments platform that has raised nearly $300 million in venture capital, has secured an undisclosed amount of new funding from Sumitomo Mitsui Card Co. www.stripe.com
PRIVATE EQUITY DEALS
• Airxcel Inc., a Wichita, Kan.-based portfolio company of One Rock Capital Partners, has acquired Dicor Corp., an Elkhart, Ind.-based maker of specialty parts and accessories for the recreational vehicle aftermarket and OEM sectors. No financial terms were disclosed. www.airxcel.com
• Apax Partners has acquired a 50.1% stake in the global respiratory solutions business of Becton, Dickinson & Co. (NYSE: BDX), which has estimated annual revenue north of $800 million. The deal will result in the launch of a new company called Vyaire Medical. www.vyaire.com
• Aptos Inc., a Canada-based provider of retail technology solutions, has acquired BT Expedite, the exclusive reseller of Aptos solutions in Europe. No financial terms were disclosed. Aptos is a portfolio company of Apax Partners. www.aptos.com
• Baring Asia has acquired Cath Kidston, a British fashion label, from TA Associates. No financial terms were disclosed. Baring Asia previously acquired a majority stake in Cath Kidston in 2014 from TA, which paid around £100 million for the company in 2010. Read more.
• Dos Rios Partners has sponsored a recapitalization of PRO EM Party & Event Rentals, a Phoenix-based event management and rental company. No financial terms were disclosed. www.proem.org
• MBK Partners and TPG Capital have agreed to acquire the telecom unit of Wharf Holdings Ltd. (HK: 4) for around $1.22 billion, according to Reuters. Read more.
• Naspers Ltd. is expected to receive two private equity bids for Polish online auction site Allegro, which could be worth around $3 billion (including debt), according to Bloomberg. One group is comprised of CVC Capital Partners and General Atlantic, while another includes Cinven, Permira and Mid Europa Partners. Read more.
• Winchester Electronics Corp., a Norwalk, Conn.-based portfolio company of Snow Phipps Group, has acquired Tekna Seal LLC, a Minneapolis-based maker of hermetic connectors for the medical, military and aerospace end markets, from ARC Group Worldwide (Nasdaq: ARCW). No financial terms were disclosed. www.winchesterelectronics.com
• Toys ‘R’ Us, a toy retailer owned by Bain Capital and KKR, has sold the assets of its FAO Schwarz brand to ThreeSixty Group, a portfolio company of AEA Investors, according to Fortune. Read more.
• True Capital has agreed to acquire a majority stake in The Cotswold Co., a UK-based online furniture retailer, from Blackbird Retail Partners. No financial terms were disclosed. www.cotswoldco.com
• Azure Power Global, an India-based solar power company, has cut the number of shares being offered in its IPO from 6.8 million to 3.4 million, but maintaining its $21-$23 price range. The company also has agreed to a private placement that will see it sell $75 million shares to Caisse de dépôt et placement du Québec at the lesser of $22 per share or the IPO price. It plans to trade on the NYSE under ticker symbol AZRE, with Barclays serving as lead underwriter. Shareholders include Helion Venture Partners and International Finance Corp. www.azurepower.com
• Baroque Japan, a Japanese women’s apparel retailer owned by CDH Investments and Chinese women’s show retailer Belle International, is planning to raise around $307 million via an IPO in Tokyo. Read more.
• Mammoth Energy Services Inc., an Oklahoma City-based oilfield services company, has set its IPO terms to 7.75 million shares being offered at between $15 and $18 per share. It would have an initial market cap of around $619 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol TUSK, with Credit Suisse serving as left lead underwriter. The company is a subsidiary of Mammoth Energy Partners LP, and reports a $29.5 million net loss on around $47 million in revenue for the first six months of 2016. www.mammothenergypartners.com
• Samsung Biologics, a South Korean contract manufacturer for pharma companies, could raise up to $2 billion in its IPO. Read more.
• AEA Investors is seeking a buyer for Niacet, a Niagra Falls, N.Y.-based supplier of chemicals for the food and drug industries, according to Bloomberg. The deal could be valued at more than $350 million. Read more.
• Criteo (Nasdaq: CRTO) has agreed to acquire HookLogic, a New York-based advertising exchange for brands. No financial terms were disclosed. HookLogic has raised nearly $40 million in VC funding from firms like LUMA Capital Partners, Bain Capital Ventures, Mousse Partners, Fung Capital USA and Intel Capital. www.criteo.com
• The Halifax Group has sold Golden State Overnight, a provider of overnight delivery services in California, Nevada, Arizona, and New Mexico, to General Logistics Systems, a unit of Royal Mail PLC. The deal was done at a $90 million enterprise value. www.gso.com
• Shore Capital Partners has sold ClearPath Diagnostics, a Syracuse, N.Y.-based provider of lab diagnostic services, to LabCorp (NYSE: LH). No financial terms were disclosed. www.clearpathdiagnostics.com
• Summit Partners has agreed to sell Grand Design Recreational Vehicle Co., a Middlebury, Ind.-based maker of RVs, to Winnebago Industries Inc. (NYSE: WGO), for approximately $500 million in cash and stock. www.granddesignrv.com
• Concordia International Corp. (TSX: CXR), a Canadian drugmaker, is “discussing alternatives to a leveraged buyout that include divesting a minority stake to a private equity firm,” according to Reuters. Read more.
• LVMH has agreed to acquire an 80% stake in German luggage maker Rimowa for €640 million euros. Read more.
FIRMS & FUNDS
• 500 Durians, the Southeast Asia-focused affiliate of seed investment firm 500 Startups, has raised $50 million for its latest fund. Read more.
• The Riverside Company has closed its first growth lending fund, Riverside Acceleration Capital, with $50 million in capital commitments. www.riversidecompany.com
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