BRB
Answer and solution: Term Sheet readers are aware that the private equity industry is increasingly facing an inventory problem – viable targets are too expensive, activist shareholders are forcing companies to do PE-style cost-cutting while they’re public, and corporate buyers have so much cash they can afford to pay high premiums. The data shows private equity buyers on the sidelines.
Today a new Bain & Co. report says the same: Buyout firms’ share of M&A deals is at its lowest since 2009, with just 4.2% of deals coming from buyout shops last year. (The peak was 7.9% in 2006.)
That’s why I expect to see more buyout firms snapping up companies planning to go public, a la KKR’s December acquisition of Optiv Security, which had filed to go public the month prior.
“Private equity gets stung”: That’s how one tax lawyer describes how Paul Ryan’s tax plan will affect the buyout industry. The end of interest deductions on loans promises to pit Wall Street against the private equity industry, which has not been promised the same special treatment as banks.
Funds: Yesterday I saw a secondary share solicitation that confirmed Friday’s report on Roku’s new fundraise: The company anticipates a first quarter valuation of $1.5 billion post-money. As we noted last week, Roku is raising around $200 million, though the total funding could go higher depending on the amount of secondary stock sold in the transaction. (The seller was asking for a 37% discount, which is just one data point but in line with the discount on a number of startup secondary transactions I’ve recently seen.)
Uber’s second bad week: The company’s SVP of engineering Amit Singhal has left the company after sexual harassment allegations from his prior job at Google came to light.
1099 Problems: HomeHero, an L.A.-based home care startup with $23 million in funding from Social Capital, Science and Graham Holdings, announced it will end its distributed workforce model of caretakers in peoples’ homes, citing the 2015 regulatory decision that required its 1099 workers to become full-time employees as the major reason. Instead, it will focus on “promoting health and wellness in the home.” This item has been corrected to note the regulatory decision happened in 2015.
Nope: Last week I made fun of the tendency of dealmakers to use romantic metaphors to describe M&A transactions. Which is generally fine, until you wind up with cringe-worth comments like Warren Buffett’s on Kraft and Heinz from yesterday. When a lady says no, she means no, Warren.
BRB: Tonight I'm heading on vacation for a few weeks. YEP, this means I will miss the biggest tech IPO of the year. Don't worry, I've pre-written at least 52 possible versions of what could happen and contracted a ghost-tweeter to shoot off some snarky jokes on my behalf.
My Fortune colleagues will be providing guest columns in this space and Laura Entis, who has been doing a fantastic job putting together these deal listings each morning, will continue to handle that. You can send your news to her or to our general inbox, and you should also follow her on Twitter here.
THE LATEST FROM FORTUNE...
• Fortune’s Most Powerful Women OnStage podcast features Stephanie McMahon, Chief Brand Officer of WWE (World Wrestling Entertainment).
• Tesla sued for discrimination.
• Cisco CEO: Not worried about Trump policies disrupting trade.
• GE CEO: Same.
• Snap’s year-long lock-up period for some investors.
…AND ELSEWHERE
Most asset managers are bored at work. The would-be tech paradise in Kansas. Jailtime for drone-flying. Paul Tudor Jones lowers fees. Martin Shkreli, his lawyer, and lots of accusations. JPMorgan doesn’t need lawyers anymore.
VENTURE DEALS
• Ola, a Bengaluru-based cab-hailing startup, raised $330 million in funding, according to the Business Standard. The round, which was led by SoftBank (TSE:9984), values the company at $3.5 billion, down from the $5 billion valuation when it last raised money in 2015. Read more.
• ResearchGate, a Berlin social network for scientists and researchers, raised $52.6 million in funding. Investors include Wellcome Trust, Goldman Sachs Investment Partners, Four Rivers Group, Ashton Kutcher, Bill Gates, Benchmark, and Founders Fund.
• PebblePost, a New York personalized online mailing platform, raised $15 million in Series B funding. RRE Ventures led the round, and was joined by Greycroft, Tribeca Venture Partners, and angel investors.
• Dealflo, a London provider of end-to-end financial agreement automation services, raised £10 million ($12.4 million) in funding. Holtzbrinck Ventures led the round, and was joined by Notion Capital and Frog Capital.
• Belong, an Indian predictive hiring platform provider, raised $10 million in Series B funding. Sequoia Capital India led the round, and was joined by Matrix Partners India.
• Fortscale Security, a San Francisco provider of user entity behavior analytics for security, raised $7 million in funding. Evolution Equity Partners and Valor Capital Group led the round, with participation from Intel Capital, Blumberg Capital, Swarth, CME ventures, and UST Global.
• Workfit, a Menlo Park, Calif.-based developer of enterprise voice assistant software, raised $5.5 million in seed funding. Investors include Battery Ventures, Greycroft Partners, and Salesforce Ventures.
• L’Addition, a French fintech company that helps restaurants bill their clients, raised €5 million ($5.3 million) in funding from Galia Gestion and CM CIC Capital Privé, according to Tech.eu. Read more.
• Flo Live Limited, a London-based IoT company, raised $4.2 million in a Series A funding. ARIE Capital and Golden Sunflower Capital led the round.
• LeoLabs, a Menlo Park, Calif. provider of commercial satellite tracking services, raised $4 million in funding. Investors include SRI International, Horizons Ventures, and Airbus Ventures.
• Dubset Media, a New York platform for the legal distribution of music, raised $4 million in Series A funding. Cue Ball Capital led the round.
• Motimatic, a San Francisco online advertising platform that delivers motivational content to college students, raised $3.4 million in Series A funding. University Ventures and New Markets Venture Partners led the round.
• PartySlate, a Chicago digital platform for event planning professionals, raised $1.6 million in funding. Hyde Park Venture Partners led the round, and was joined by Hyde Park Angels, InvestHER Ventures, WaveMaker Partners, Jump Investors, and Halogen Ventures. Read more.
• D's Naturals, a Cincinnati-based healthy snacking startup, raised an undisclosed amount in funding from 2x Consumer Products Growth Partners and 301 Inc, General Mills’ (NYSE:GIS) venture arm. Read more at Fortune.
PRIVATE EQUITY DEALS
• Sycamore Partners confirmed it has acquired The Limited's intellectual property and ecommerce site. Financial terms weren’t announced, but Reuters valued the deal at $26.8 million. The Limited, a New Albany, Ohio-based women's retailer, filed for bankruptcy in January.
• Dospuntos, backed by Värde Partners, acquired Vía Célere, a Spanish development and construction company, for €90 million ($94.4 million).
• Branford Castle Partners acquired Surface Preparation Technologies, a Mechanicsburg, Pa.-based provider of surface preparation services. Financial terms weren’t disclosed.
• Flexpoint Ford invested in SouthEast Eye Specialists, a Knoxville, Tenn. provider of medical and surgical eye care, and Center for Facial Rejuvenation, a Chattanooga, Tenn. provider of facial medical aesthetics.
• Generation Growth Capital acquired BestMark, a Minneapolis provider of customer experience measurement services and analytics. Financial terms weren’t disclosed.
• Banker’s Toolbox, an Austin, Texas provider of software for community banks and credit unions backed by Accel-KKR, acquired Integra Systems, a provider of customer due diligence and OFAC scanning services. Financial terms weren’t disclosed.
OTHER DEALS
• Aramco agreed to buy a $7 billion equity stake in Petronas (KLSE:PETGAS), a Malaysian gas infrastructure and utilities company, according to Reuters. Read more.
• OneWeb, an Arlington, Va.-based satellite company backed by SoftBank (TSE:9984), has agreed to merge with Intelsat SA (NYSE:I), a Luxembourg-based satellite operator laden with about $15 billion in debt. Read more at Fortune.
• BCBG Max Azria Group, a Vernon, Calif.-based designer of women’s clothing and accessories, is preparing to file for bankruptcy, according to Reuters. Read more.
• Barnes & Noble Education (NYSE:BNED) acquired MBS Textbook Exchange, a Columbia, Mo. wholesale distributor of textbooks, for $174.2 million in cash.
IPOS
• Alteryx, a Irvine, Calif. data analytics software company, filed to raise up to $75 million in an IPO. The company, whose shareholders include Insight Venture Partners, Sapphire Ventures, and Toba Capital, plans to trade on the New York Stock Exchange under the ticker symbol “AYX.”
EXITS
• Providence Equity Partners is selling its 3.3 percent stake in Idea Cellular (NSEI:IDEA) for north of $190 million, according to Reuters. Read more.
• Mozilla acquired Read It Later, the San Francisco startup behind the popular app Pocket, which raised $14.5 million from investors including GV, Foundation Capital, and Axel Springer Digital Ventures. Financial terms weren’t disclosed. Read more at Fortune.
• Kohlberg & Company agreed to acquire Pexco, an Alpharetta, Ga.-based specialty plastics manufacturer, from Odyssey Investment Partners. Financial terms weren’t disclosed.
• Advent agreed to purchase Leonard Green & Partners’ stake in CCC Information Services, a Chicago SaaS provider to the automotive, insurance, and collision repair industries.
• Bloq, a Chicago enterprise software developer, acquired Skry, a blockchain analytics company that’s raised $1.1 million in VC funding.
FIRMS + FUNDS
• Venture Investment Associates, a Peapack, N.J.-based private equity fund of funds manager, raised a combined $230 million for two new funds. [This item has been updated to include the correct amount of money raised by Venture Investment Associates]
• Arle Capital Partners, a London-based private equity firm, is shutting down, according to Financial News. Read more.
PEOPLE
• Harvest Global Investments has made a series of hires, adding Ruiqi Wang as an executive director, Yuki Nishio as a vice president, Sirinda Flik as a regional business development manager, Angela Wang as a vice president, business development, and Joyce Lui as a vice president for marketing and business development.
• Eric Toone and David Danielson have joined Breakthrough Energy Ventures as executive managing director and managing director for science, respectively.
• KarpReilly promoted Andrew Keating to partner, Rich Reuter to vice president, and Drew Skolnik to senior associate.
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