The sky is gray, the Nobel Prize is now being given for future deeds and this afternoon I’m participating in a VC-sponsored scavenger hunt through Boston. In other words, it’s time for some Friday Feedback:
First up are a couple of comments on Monday’s column, which discussed Simmons Bedding and the future of dividend recaps. Aaron writes: “No way are private equity investors ‘chastened’ by what they’ve done to companies like Simmons. In fact, they’re probably emboldened by it. Imagine making money on a deal in which everyone else lost. You’re likely to think you’re the smartest guy in the room, and to keep doing what you’re doing.”
Tyler: “Lenders should not allow dividend recaps in the first place, and in normal debt markets, they do not outside of special, low-risk circumstances. I was a lender in my previous life and it was ! a classic no-no red flag. That said, the problem is when the investors suck the life out of the company trying to serve its capital structure. It reflects very poorly on the PE industry because it leads to great pain at the local level that ends up being largely the fault of poor financing decisions made by the board. Good company-bad capital structure can quickly morph into bad company-bad capital structure as the company is bled dry in a futile attempt to save the remaining equity.”
*** Last Friday, I asked you what the verbal shorthand would be for 2010. Not sure what this means, but it generated more email replies than anything else I’ve written in at least a month. First, I erred in writing that we’re conditioned to need two syllables, as evidenced by “oh-seven,” “two thousand” or “ninety-nine.” Second, your consensus reply was that we’ll use “oh-ten.”
*** Next up are some emails on the ever-expanding pay-to-play scandal. More specifically,! some pro/con on my coverage of it. Jared: “I love peHUB Wire, but I beg of you to stop writing about the New York pension fund stuff. We get it: They were corrupt and are being punished. Let’s move on to more important issues to investors.” Chris dissents: “Don’t pay attention to those readers who are tired of the pension fund kickback discussion. It’s a much more important story than how much Twitter is worth on paper.”
I’ll side with Chris, and therefore add a couple new developments:
(1) A bill was introduced yesterday in New York that would effectively codify the pension system changes made recently by Cuomo and DiNapoli (bans on placement agents, political contributions, etc.). It also would transition the system from a single fiduciary to a board structure. I applauded the bill in a blog post, but subsequently spoke to State Senator Brian Foley, a bill co-sponsor. He said that the placement agent ban, etc. had broad legislative support, but that the board change was a much tougher slog. He’s even been asked (already) about splitting the bill, although he’s not there yet. Hope he sticks to those guns, because the fiduciary change is the bill’s best feature, and the reason I support it (despite my general distain for placement agent bans).
(2) Expect CalPERS to soon release a bunch of new placement agent-related d! ocs (particularly about ARVCO). Also, I’ve learned that the placement agent list CalPERS sent to me last month was woefully incomplete. CalPERS said yesterday that the list was never intended to be comprehensive, but such a caveat was never conveyed until now.
*** Paul asks about the peHUB Shindig in Dallas: “I asked to be put on the waiting list. When will I fine out of I got a ticket?” The answer is Monday, Paul. We’re just waiting to see if our sponsors use their entire allocation of comp tickets or not. Gonna be a crowded house.
*** Have a great weekend, and we’ll talk again on Monday (unless you’re luckier than me, and have Columbus Day off). Go Sox…
Top Three
Sterling Partners and CPP Pension Plan have agreed to acquire Canadian logistics services provider Livingston International Income Fund (TSX: LIV), for approximately C$225.3 million. Livingston unitholders would receive C$8 per unit, representing a 20% premium over Wednesday’s closing price. Sterling would hold a 60% stake following the transaction, with CPP holding the remainder.
Dailymotion SA, a Paris-based video sharing website, has raised €15 million in third-round funding. The deal was first disclosed by company CEO Cedric Tournay in an interview with Capital.fe. DailyMotion previously raised $43.5 million from Advent Venture Partners, AGF Private Equity, Atlas Venture and Partech International. www.dailymotion.com
Birds Eye Foods Inc., a Rochester, N.Y.-based maker of packaged food products, has filed for a $350 million IPO. J.P. Morgan is serving as lead underwriter. The company reported around $935 million in revenue for the year ending June 30, 2009. Vestar Capital Partners acquired Birds Eye in 2005. www.birdseye.com
VC Deals
Troux Technologies Inc., an Austin, Texas-based provider of IT governance software, has raised $10 million in sixth-round funding. Return backers include Austin Ventures and Greylock Partners. The company had previously raised around $41 million.
Amie Street Inc., a New York-based digital music retailer, has raised $3.88 million in Series B funding, according to a regulatory filing. Deep Fork Capital was joined by undisclosed investors. Amie Street previously raised capital from Amazon.com. www.amiestreet.com
ALung Technologies Inc., a Pittsburgh-based developer of artificial lung devices for the treatment of acute and chronic respiratory disorders, has raised $2.5 million in new VC funding. No investor information was disclosed.
Buyouts Deals
Argos Soditic has acquired a majority stake in Misapor, a Surava, Switzerland-based maker of foam glass granulate for the European construction market. The deal was structured as a management buyout.
Capital Partners Inc. has sponsored a recapitalization of AMES Inc., a Wilmington, N.C.-based provider of maintenance project and workforce management solutions to the U.S. commercial nuclear power industry.No financial terms were disclosed. Cobblestone Harris Williams advised AMES on the transaction.
PE-Backed IPOs
Dollarama Inc., a Canadian discount retailer owned by Bain Capital, has set its IPO terms to 17.14 million shares being offered at C$17.50 per share. It plans to price next week on the Toronto Stock Exchange.
PE-Backed M&A
ConvergEx, a New York-based provider of global agency brokerage and investment technology solutions, has agreed to acquire the assets of Cogent Consulting LLC, a software development firm specializing in advanced commission management. No financial terms were disclosed. ConvergExwas formed in 2006 by GTCR Golder-Rauner, which combined Eze Castle Software and the institutional brokerage business of Bank of New York.
Human Resources
Akhil Awasthi has joined Tata Capital as managing partner of its new private equity fund. He previously was a partner with Baring Private Equity Partners India. www.tatacapital.com
Saverio Costa has joined Pantheon Ventures as a New York-based principal focused on client services. He previously was with placement agent Benedetto Gartland & Company.
Gareth Davies has joined Greenhill & Co. as a London-based managing director, in the firm’s financing advisory and restructuring practice. He previously was with Close Brothers Corporate Finance.
Tim Harned has joined America’s Growth Capital as a Boston-based partner in the firm’s investment banking group. He previously was head of media and technology I-banking at Capstone Partners.
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