Greetings from New York City, where I’m in town for some meetings. Feels kind of wrong being here on Patriot’s Day, but the first person I mentioned that to this morning stared at me blankly (think he assumed it was some sort of football thing). Anyway, onto the business of business:
*** Consensus from last week’s Buyouts West event was that an “avalanche” of private equity deals are coming down the mountain. Sellers enticed by rising valuations, buyers enabled by loosening credit, etc.
Let’s assume that the prognosticators are correct. The next question should be: Do new deals indicate a belief that the economic and market recoveries are sustainable? Or is this just the latest instance of PE firms buying cyclically instead of counter-cyclically (the latter, of course, being where the best returns are derived)? And, if so, how will firms guard against a c! oming downturn/double-dip, etc? Or will the relative lack of 2006-2008 LBO collapses be used as a justification for emphasizing offense over defense.
No answers here, just a bunch of questions…
*** The Quadrangle Group probably doesn’t believe it right now, but this whole pay-to-play thing could have been much, much worse. Imagine if President Obama hadn’t asked Steve Rattner to become his car czar, or if Rattner had declined. Under that scenario, he would have spent the past 14 months as an active Quadrangle partner and the firm’s most visible face – as opposed to a former partner whose separation helps bolster the cleanliness rep of remaining staff.
I know Quadrangle and many of its investors felt blind-sided by Rattner’s move to DC – he’d previously said that he’d only leave if Hillary Clinton were elected – but, in retrospect, they caught a break.
*** Quiz Time: Can you name the VC firm whose limited partners recently attempted to enact a “no-fault” divorce?
*** For years, the majority of private equity firms have no lobbying representation in Washington, D.C. Hundreds of billions of dollars under management, but nothing more than one-off cajoling of legislators when it comes to issues of taxation, regulation, registration, etc.
I raised this oddity during a Buyouts West panel last week in San Francisco, to which Vector Capital’s Alex Slusky said that things were about to change. A reporter from Buyouts magazine followed up, and learned that the Private Equity Council has agreed to open up its membership to smaller firms. Buyouts magazine subscribers can read more here.
Top Three
NXP, a Dutch semiconductor company, has filed for a $1.15 billion IPO. Philips Electronics sold an 80% stake in the company four years ago to a buyout consortium that included KKR, Bain Capital, AlpInvest, Apax Partners and Silver Lake Partners.
Groupon, a group buying site, confirmed press reports that it has raised $135 million in new funding. Those reports also pegged the valuation at around $1.2 billion, although valuation is not mentioned in the Groupon press release. Digital Sky Technologies led the round, and was joined by Battery Ventures. The company previously raised a $30 million round at a $250 million valuation, from Accel Partners and New Enterprise Associates.
BlackArrow, a New York-based provider of ad-management systems for viewer-controlled video platforms, has raised $20 million in Series C funding. NDS Group led the round, and was joined by return backers Cisco Systems, Comcast Interactive Capital, Intel Capital, Mayfield Fund and Polaris Venture Partners. The company previously raised $38 million.
VC Deals
Knewton, a New York-based online education company, has raised $12.5 million in third-round funding. FirstMark Capital led the round, and was joined by return backers Accel Partners, Bessemer Venture Partners, First Round Capital and Reid Hoffman.
Talend, a Palo Alto, Calif.-based provider of open source data integration software, has raised $8 million in Series D funding. Return backers included Balderton Capital and AGF Private Equity. Talend previously raised $20 million.
Tynt Multimedia, a Calgary-based provider of hosted solutions for online publishers, social networks and online communities, has raised US$8 million in Series B funding. Panorama Capital led the round, and was joined by Greycroft, Metamorphic Ventures, iNovia Capital, Disruptive Ventures, Newport Coast Investments, W Media Ventures, Joe Apprendi (Collective Media), Allen Morgan (Mayfield), Erik Matlick (Madison Logic), and Yen Lee (Uptake.com).
GreenWizard Inc., a Charlseton, S.C.-based provider of an online system that helps architects, engineers and contractors to build greener structures, has raised $1.15 million in Series A funding led by Zygote Ventures.
Buyouts Deals
Apax Partners, BC Partners and Providence Equity Partners reportedly are among the bidders for corporate investigations company Kroll, which is being auctioned off by Marsh & McLennan Cos.
The Blackstone Group reportedly is considering a bid for German department store Kaulhof, which is owned by Metro group.
GMR Group, an Indian infrastructure and energy conglomerate, reportedly is looking to raise $100 million in new private equity funding for its power group. The unlisted unit recently ra! ised $200 million from Temasek Holdings.
PE-Backed IPOs
Amyris Biotechnologies Inc., an Emeryville, Calif.-based synthetic biology company that developers renewable hydrocarbon biofuels, has filed for a $100 million IPO. It plans to trade under ticker symbol AMRS, with Goldman Sachs, J.P. Morgan and Morgan Stanley serving as co-lead underwriters. The company reports $64 million in 2009 revenue, compared to $14 million in 2008. Amyris has raised over $240 million in VC funding, from Kleiner Perkins (15.4% pre-IPO stake), Kohsla Ventures (15.4%), TPG Biotech (12.1%), Advanced Equities (6.7%),Temasek Holdings, DAG Ventures, Votorantim Novos Negocios, Grupo Cornélio Brennand, Naxos UK, The Westly Group and Stratus Group. www.amyrisbiotech.com
Molycorp Inc., a Greenwood Village, Colo.-based rare earth mining company, has filed for a $350 million IPO. It plans to trade on the NYSE under ticker symbol MCP, with J.P. Morgan and Morgan Stanley ! serving as co-lead underwriters. The company was created in 2008 when Chevron Mining sold its Mountain Pass operations to an acquisition company formed by Pegasus Partners, Goldman Sachs, Traxys North America and Carint Group. www.molycorp.com
Tangoe Inc., an Orange, Conn.-based provider of communications lifecycle management software and services, has filed for a $75 million IPO. It plans to trade on the Nasdaq under ticker symbol TNGO, with Deutsche Bank Securities and Thomas Weisel Partners serving as co-lead underwriters. The company reports 2009 revenue of nearly $56 million, compared to $37.5 million in 2008. Its net loss fell to $2.55 million in 2009. Tangoe has raised over $18 million in VC funding. Shareholders include Edison Venture Funds (21.5% pre-IPO stake), Sevin Rosen Funds (16.8%), Investor Growth Capital (12.4%) and North Atlantic Capital (9.9%). www.tangoe.com
PE-Backed M&A
Lineage Power Holdings Inc., a portfolio company of Gores Group, has completed its acquisition of PECO II Inc. (Nasdaq: PIII), a Galion, Ohio-based provider of engineering and on-site installation services related to communications power systems and power distribution equipment. The deal was valued at around $16.7 million, with PECO stockholders receiving $5.86 per share.
Summit Materials, an acquisition platform in the building materials market, has acquired Cornejo & Sons, a Wichita,! Kansas-based producer of and and gravel, asphalt and ready-mix concrete. No financial terms were disclosed. Summit was formed last fall by The Blackstone Group, Silverhawk Capital Partners and former BHP Billiton CEO Charles Goodyear. It has up to $780 million in capital commitments.
PE Exits
Hearst Corp. is nearing a $375 million deal to buy digital marketing company iCrossing, according to the WSJ. iCrossing shareholders include Goldman Sachs and Oak Investment Partners.
Firms & Funds
CapitalSource has acquired the assets of SBA lender MainStreet Lender LLC, for $100 million.
Tsing Capital, a Chinese cleantech venture capital firm, is targeting $250 million for its fourth fund, according to VentureWire. www.tsingcapital.com
Human Resources
Alejandro Reynoso del Valle has joined the Mexican operating unit of Evercore Partners as a senior managing director. He previously was a managing director and CIO for Latin America at Barclays Global Investors.
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