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Term Sheet — Monday, April 3


Hello. Just about every beat at Fortune is enjoying some deal-making action at the moment, so this morning’s Term Sheet is a team effort…

Big Apparel M&A: VF Corp. is a company built on acquisitions. But the apparel giant hasn’t done a big, transformational deal since 2010, and with lower-than-projected revenue growth over the last three years, investors are getting antsy. My colleague Phil Wahba spoke with VF Corp. CEO Steve Rendle about the deal drought. Here’s an excerpt:

• Why hasn’t VF landed a big deal like the Timberland purchase since 2010?

Steve Rendle: We’ve been looking. We’ve looked at a lot of brands on a monthly basis in the last 2-3 years. What’s prevented us from acting is really the valuation of those companies at those times. We’ve not been able to put together a deal that matches our financial criteria, that brings a brand in that matches where we see value, and where our management discipline can be applied to drive growth. It still remains our #1 strategic choice around reshaping our portfolio to be able to compete.

• What are your criteria for a deal?

SR: We look for a brand we believe has potential to achieve $1 billion in [annual] revenue. That opens up the lens to smaller brands. Then it comes back to: Is it a strong band that just needs greater management discipline? (Read the rest of the interview here.)

Big IT M&A Whiplash: Last week, a report that Oracle was interested in acquiring Accenture turned heads in the IT world. At first, Oracle declined to comment, but by Saturday, that “no comment” turned into a full-on denial: “The Accenture rumor is completely untrue. Never even considered it,” a spokeswoman told my colleague Barb Darrow.

Companies do lie from time to time, but in general it’s pretty rare for a spokesperson to be that frank about a deal that has even the slightest chance of happening. Either way, Barb as a full run-down of all the pros (Oracle is behind rivals on services a la Accenture) and cons (expensive, conflicts for Accenture, and why not just partner?) of this (likely dead, but maybe not) deal, right here.

Big Dairy M&A: Danone has agreed to pay $10.4 billion for WhiteWave, an organic milk company, but my colleague Beth Kowitt notes that some analysts expect a rival bidder to jump in. The already-steep price tag solidifies the fact that “natural and organic” is mainstream.

“We’ve got to stop calling it the natural food industry,” says Errol Schweizer, a former Whole Foods executive who is now an industry adviser, tells Beth. “It’s just the food industry now.” Read the rest here.

Big Ecommerce M&A: A few years ago, I happened to be in India during a major shopping season, and the advertising competition between local e-commerce leaders Flipkart, Snapdeal, and Amazon was unavoidably intense. The ubiquitous billboards and the giant ads taking over the front page of every major newspaper felt unsustainable. I kept wondering how long they could they keep up that level of spending? The answer, for Amazon, is probably however long it takes.

For the two startups, though, the answer might be 1.5 years. On the heels of Flipkart’s reported down round, the Times of India reports that SoftBank, an investor in Snapdeal, is discussing a possible merger between its portfolio company and Flipkart. (Snapkart? Flipdeal? Dealkart? Flipsnap?) The deal would reportedly involve a significant new investment from SoftBank, possibly from the Vision Fund. It would also allow Tiger Global to cash out of its share in Flipkart. However, it could all be someone’s fantasy: Flipkart denied the report.

Big Cloud IPO: As warned in Friday’s Term Sheet, Cloudera, a data analytics startup, filed its S-1 on Friday afternoon. My colleague Jonathan Vanian as a full analysis of what’s in there, but the key takeaways, via Jonathan, are:

• Revenue: Cloudera recorded $261 million in sales for its most recent fiscal year while also losing $187 million during the same time period.

• Investors: Cloudera is closely affiliated with Intel, which owns 22% of the company, and partnered with the semiconductor giant on several big technology projects. Accel Partners was Cloudera’s first investor and owns 16.3% of the company, followed by Greylock Partners, which owns 12.5% of Cloudera’s shares prior to the IPO.

• Comps: Cloudera competes with Hortonworks, which is also trying to make a business around open source technology. Hortonworks went public in late 2014 with its shares trading at nearly $28 during its height in April 2015. However, Hortonworks’ shares have dropped over 60% to $9.90 on Friday as the company has struggled to be profitable, Jonathan writes.

PS. This tweet from Jason M. Lemkin is pretty spot-on for our times: “Cloudera goes from utterly insane losses to super high losses before the IPO. Still, should crush it.” This works with just about any IPO-ready unicorn – just fill in the name of your favorite!

New Unicorn: In Friday’s Term Sheet, we also reported on fact that stock trading app Robinhood is very close to closing a new round of funding at a valuation of at least $1 billion. By the end of the day, TechCrunch sleuthed out the lead bidder. DST Global, the investment arm of Yuri Milner, is backing the deal, according to TC. The story also reports that the deal values the company at $1.3 billion.

Breaking up: Last week Term Sheet also wrote about Wiley Cerilli, the entrepreneur that divested Jared Kushner’s investment in his company. He’s not the only New York City founder dealing with political rifts with an investor. The Ringer has a noteworthy story on Tracy Heller, founder of e-commerce site Brooklyn Born, and a dispute with her investors over some Instagram photos of the women’s march. (The investors objected to them.) Deal documents don’t usually contain clauses about political Instagram posts, so Heller was entitled to keep their money despite her investors’ frustrations. She gave it back anyway, or at least, the 82% of it that her company hadn’t spent.

Still More Scandal: The Uber bombshells show no signs of slowing. The New York Times’ latest outlines a technology used by the company to manipulate drivers: “Even as Uber talks up its determination to treat drivers more humanely, it is engaged in an extraordinary behind-the-scenes experiment in behavioral science to manipulate them in the service of its corporate growth.”




•  This week’s episode of Fortune Unfiltered features Kay Koplovitz, founder of USA Network.

•  A powerful story of an entrepreneur’s life after an accident that paralyzed him.

•  Once-booming gun industry now recalibrating under Trump.


The latest piece of millennial-trolling. Scoring how “woke” Lyft is. Amazon is dead serious about drove delivery. Instagram killed the retail store. Snapchat had the only good April Fool’s day joke. The political power of workers. Two great stories about jobs in the heartland: One about race, and one about that Carrier plant. The top acquirers of AI startups. Under Trump, banks could get the urge to merge (too bad bank mergers don’t often work out very well).


• Nitro, a San Francisco-based provider of document and workflow management software, raised $15 million in Series C funding. Battery Ventures led the round, and was joined by Regal Funds Management and Alium Capital.

• Verde Beef Processing, an Ethiopian beef producer, raised $7.4 million in funding from Norfund.

• Stripe, a San Francisco online payments provider, raised $5 million in funding, according to an SEC filing. The company, which was last valued at $9 billion, has raised north of $440 million from backers including Sequoia Capital and Thrive Capital.

• Cortexica, a London provider of cloud-based image recognition software, raised £2 million ($2.1 million) from Touchstone Innovations.

• Farmstand, a London-based sustainable, fast-casual food company, raised £1 million ($1.3 million) in venture funding. Quadia led the round.

• Wag, a San Francisco-based on-demand dog walking service, raised an undisclosed amount in funding from General Catalyst and Sherpa Capital, according to TechCrunch. Read more.


• SpyBiotech, an Oxford, U.K. biotech startup developing a method to superglue antigens to viruses and other particles to make vaccines, raised $5 million from GV and Oxford Sciences Innovation, according to TechCrunch. Read more.


• Alex Apparel Group, a New York City designer of women’s apparel designer backed by Atlantic Street Capital, acquired SL Fashions Group, a New York City designer of day and eveningwear dresses.

• Vector Capital agreed to acquire a majority stake in Experian’s (LSE:EXPN) cross-channel marketing business in a deal that values the unit at $400 million.

• HealthcareSource HR, a Woburn, Mass.-based developer of talent management software backed by Francisco Partners, acquired Centricity Contingent Staffing from GE’s (NYSE:GE) healthcare IT division. Financial terms weren’t disclosed.

• Great Hill Partners invested in Reflexis, a Dedham, Mass. provider of retail workforce management software.

• Apax Partners agreed to acquire Syneron Candela, a non-surgical aesthetic device company, for approximately $397 million.

• Nutrabolt, a Bryan, Texas-based nutrition and dietary supplements company owned by MidOcean Partners, acquired Scivation, a Burlington, N.C. nutritional supplements maker. Financial terms were disclosed.

• CircusTrix Holdings, a Provo, Utah operator of indoor recreation parks backed by Palladium Equity Partners, acquired Rockin’ Jump Holdings, a Pleasanton, Calif. Operator of trampoline park.

• Pine Brook agreed to Triumph Capital Advisors, a Dallas-based investment management firm. Financial terms weren’t disclosed.

• Pretium, a Chesterfield, Mo. plastic bottle and container manufacturer backed by Genstar Capital, acquired Patrick Products, a packaging and container manufacturer for the janitorial, automotive, and household chemical market sectors.

• MHI Holdings, a Norfolk, Va. provider of marine repair services backed by Stellex Capital Management, acquired Seaward Marine Services, a provider of underwater hull cleaning and ship husbandry services, and Accurate Marine Environmental, a provider of marine and industrial tank and bilge cleaning services, environmental remediation, and disposal services. Financial terms weren’t disclosed.

• Lone Star agreed to acquire a 75% stake in Novo Banco, a Lisbon-based state-owned bank, according to Reuters. Per the agreement, Lone Star will place €750 million ($800 million) in capital into the bank, plus an additional €250 million ($267 million) within three years. Read more.

• CVC Capital Partners is close to reaching an agreement to buy a 25% stake in CLH SA, a Madrid-based oil pipeline operator, from Ardian for about €1.5 billion ($1.6 billion) including debt, according to Bloomberg. Read more.

• New Mountain Capital agreed to acquire TRC Companies (NYSE: TRR) for about $554.6 million in cash. At $17.55 per share, New Mountain Capital’s offer represents a 47% premium to the company’s closing price Thursday.

• Cornell Capital agreed to acquire World Kitchen, a Rosemont, Ill.-based kitchen and cooking appliance manufacturer. Terms weren’t disclosed.

• TZP Growth Partners recapitalized Advocate Solutions, a Columbus, Ohio provider of strategic advisory, project and risk management services to state and local governments.


• Toshiba Corp. (Tokyo: 6502)’s semiconductor unit has received a $17.9 billion bid from Broadcom (Nasdaq: AVGO) and Silver Lake, but Apple, Alphabet and Amazon have also placed bids, according to Reuters. Read more.

• Astellas Pharma (TSE:4503) agreed to acquire Ogeda SA, a Belgium-based clinical-stage drug discovery company, for €800 ($853 million).


• Cloudera, a Palo Alto, Calif.-based data analytics startup, filed to go public. The company, which has raised more than $1 billion from backers including Accel Partners, Greylock Partners, Meritech Capital Partners, Ignition Partners, and GV, plans to trade on the NYSE under the symbol CLDR. Read more at Fortune.

Ronco Brands, an Austin, Texas-based kitchen appliance maker whose devices include the Veg-O-Matic and the Pocket Fisherman, has filed for a $30 million IPO, according to the Wall Street Journal. Read more.

• Carvana, a Phoenix-based online marketplace for buying used vehicles, filed for an initial public offering. The company, which has raised $460 million in funding from unnamed investors, plans to trade on the NYSE under the ticker symbol CVNA. Read more at Fortune.

• Frontier Airlines, a Denver, Colo.-based low-cost airline carrier owned by Indigo Partners, has filed for an IPO.

• Emerald Exposition, a San Juan Capistrano, Calif.-based B2B trade show operator owned by Onex Partners, has filed for an IPO. It plans to trade on the NYSE under ticker symbol EEX.


• Cowen Group (Nasdaq:COWN) agreed to acquire Convergex Group, a New York City-based provider of brokerage and trading-related services for institutional investors, from shareholders including GTCR for $116 million in stock and cash.

• Alinda Capital sold Reliance Home Comfort, a Richmond Hill, Canada-based provider of water heaters, furnaces, and air conditioners, for C$2.8 billion ($2.1 billion) to Victor Li, a member of one of Asia’s wealthiest families, per Reuters.  Alinda Capital purchased Reliance Home in 2007. Read more.

• Essar Global Limited agreed to sell the parent company of Aegis, a global outsourcer, to Capital Square Partners. Financial terms weren’t disclosed, but media reports value the deal at between $275 million and $300 million. Read more.


• AlpInvest PartnersThe Carlyle Group’s (Nasdaq:CG) dedicated primary fund, raised $6.5 billion for AlpInvest Secondaries Program VI (ASP VI).

• Bayou City Energy, a Houston-based private equity firm, raised $310 million for its second fund, Bayou City Energy II.

• Banyan Capital, a Beijing-based venture firm, raised $50 million for its third fund, according to an SEC filing.


• IVP promoted Roseanne Wincek to principal.

• Tom Goila joined Comvest Partners as a managing director. Previously, he was a director at Goldman Sachs (NYSE:GS).

• May Samali joined the Urban Innovation Fund as an associate. May previously served as a director with Urban Ventures accelerator Tumml.


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Term Sheet is produced by Laura Entis. Submit deal items here