Apr 6, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Some quick notes to kick off your Thursday, as the PC laptop screen keeps turning a maddening shade of blue...

Top of the Morning

Earlier this week we detailed the pathetic paucity of women decision-makers at U.S. venture capital firm, which stands at just 7%. That data was calculated by examining hundreds of VC firms that had raised funds of at least $100 million over the past five years, prompting many readers to suggest that we also take a look at smaller funds. Apparently there is an anecdote-fueled theory that women decision-makers would be more prevalent at <$100 million funds.

So we looked. And the numbers are virtually identical.

PitchBook sent us over a list of 168 U.S.-based VC firms that raised funds sized at between $15 million and $99 million between 2012 and 2016 (it actually sent us a few more, but we removed any dupes with the prior list). Then we again went to the firm websites, and sometimes needed to use SEC docs for supplemental information. Within that sample we found just 20 women decision-makers, which worked out to 6.89% of the total. It is possible that the percentage would be strong in sub-$15 million funds, but that was a rabbit hole we opted not to dive into.

Big move: The California Public Employees' Retirement System yesterday announced that private equity chief Real Desrochers is stepping down, effective this Friday, in order to join an unidentified "overseas investment bank." Three notes:

  • The CalPERS board was only notified of this move yesterday afternoon, and less than an hour before a press release was disseminated.
  • CalPERS is not yet launching a formal search process. A system spokesman told me: "They are going evaluate the position as they discuss the role of PE. The role of PE will be discussed at our Board meeting the week of April 17." It is important to note that board approval is not actually needed for this search, suggesting that Desrochers' departure could result in CalPERS outsourcing more of its PE investing activities. Sarah Corr, a Desrochers deputy, will serve as interim head.
  • Desrochers leaves CalPERS with a mixed history. He came in amidst scandal, and seemed to help clean things up. On the other hand, he held such a hard line on fees that pensioners sometimes lost out on strong-performing partnerships, in a 'penny wise, pound foolish' sort of way.

Passive aggressive fix: We recently noted that Matt Cutts, acting head of the U.S. Digital Service, didn't actually mention the Kushner-led White House Office of American Innovation when asked for a comment about its creation. So they sent over a follow-up statement which says: "USDS is excited about the Presidential Memorandum announcing the Office of American Innovation (OAI), whose objective aligns with our efforts to deliver better services to the American people through technology and design."

The BFD

Seven & I Holdings (Tokyo: 3382), the operator of 7-Eleven, has agreed to acquire most of Sunoco's (NYSE: SUN) U.S. gas stations and convenience stores for around $3.3 billion. That works out to an EBITDA multiple of around 10x.

  • Why it's the BFD: This is the biggest land grab in 7-Eleven's Slurpee-filled history, giving it an additional 1,108 shops in Texas and the Eastern U.S. (out of Sunoco's 1,300 total U.S. locations). It's also reflective of broader Japanese interest in buying U.S. targets, with such cross-border M&A so far this year nearly doubling activity over the same period in 2016.
  • Bottom line: "Seven & I is building up its chain in the U.S. while President Ryuichi Isaka is paring back some businesses in Japan as part of broad restructuring in which it sold unprofitable department stores and aims to squeeze more profit from its convenience stores." ― Bloomberg
Venture Capital Deals

• Valens, an Israeli chipmaker focused on the automotive space, has raised $60 million in new VC funding. Israel Growth Partners led the round, and was joined by Delphi, Samsung Catalyst Fund, Goldman Sachs and MediaTek. http://bit.ly/2o64rwt

• Trov, a San Francisco-based on-demand consumer insurance platform, has raised $45 million in Series D funding. Muninch Re/HSB Ventures led the round, and was joined by return backers Oak HC/FT, Guidewire, Suncorp and Anthemis. Also participating was Japanese insurer Sompo Japan Nipponkoa. www.trov.com

• Dapulse, an Israel-based team management and productivity SaaS tool, has raised $25 million in Series B funding. Insight Venture Partners led the round, and was joined by return backers Genesis Partners and Entrée Capital. http://bit.ly/2oGN32v

• Syscloud, a Chinese cloud exchange network service provider, has raised $21 million in Series A funding led by Chenhui Venture Partners. http://bit.ly/2p4ulye

• Laidian, a Chinese mobile device charger sharing startup, has raised $20 million in Series A funding co-led by SIG and Redpoint China. http://bit.ly/2oM2O5r

• Portworx, a Los Altos, Calif.-based provider of container data service for DevOps, has raised $20 million in Series B funding. Sapphire Ventures led the round, and was joined by GE Ventures and return backer Mayfield. http://bit.ly/2p4rDsC

• SlashNext, a Pleasanton, Calif.-based provider of cybersecurity protection against socially-engineered attacks, has raised $9 million in Series A funding co-led by Norwest Venture Partners and Wing Venture Capital. http://bit.ly/2o5rojX

• Triptease, a London-based SaaS platform to help hotels increase direct bookings, has raised $9 million in Series B funding. BGF Ventures led the round, and was joined by return backers Notion Capital and Episode 1 Ventures. http://tcrn.ch/2obMsFs

• Platterz, a Toronto-based corporate catering startup, has raised $6.7 million in seed funding from AltaIR Capital, Globalive Capital and individual angels like Oren Zeev. http://bit.ly/2oEwaWJ

• Dojo Madness, a Berlin-based e-sports coaching startup, has raised $6 million in new VC funding. Raine Ventures led the round, and was joined by K Cube Ventures and return backers DN Capital and March Capital. http://tcrn.ch/2oMnpGP

• Azitra, a Farmington, Conn.-based developer of microbiome-based skin disease treatments, has raised $2.9 million in Series A funding led by Bios Partners. http://bit.ly/2ncJEss

Private Equity Deals

• Armor, a Dallas-based cloud security company majority-owned by The Stephens Group, has raised $89 million in equity funding led by ST Telemedia. http://tcrn.ch/2nEcAEO

• Harbour Group has acquired ILP, as Sanford, Fla.-based manufacturer of energy efficient LED lighting fixtures, from Pfingsten Partners. No financial terms were disclosed. http://bit.ly/2nHchJr

• Learnlight, a UK-based provider of blended language and skills training, has raised an undisclosed amount of growth equity funding from Beech Tree Private Equity. www.learnlight.com

• Mizzen+Main, a Dallas-based menswear brand, has secured an undisclosed amount of growth equity funding from L Catterton. http://bit.ly/2nH7jMW

• Monroe Truck Equipment, a Monroe, Wis.-based acquisition platform sponsored by Industrial Opportunity Partners, has acquired the assets of Towmaster, a Litchfield, Mich.-based manufacturer of utility and industrial trailers and of and snow/ice removal equipment for trucks. http://bit.ly/2odbgwO

• Renovo Capital has acquired Global HR Research, a Fort Myers, Fla.-based provider of pre-hire intelligence and employee onboarding solutions, from Patriot National (NYSE: PN) for upwards of $30 million (including $20m upfront). http://bit.ly/2ocY3nB

• Seek Ltd. (ASX: SEK), an Australian online classifieds company, has agreed to acquire the 25% stake it doesn't already own in Chinese subsidiary Zhaopin (NYSE: ZPIN) $18.20 per share. Also participating on the buyside would be private equity firms Hillhouse Capital and an FountainVest Partners, while sellers would include James Packer.

Public Offerings

• Elevate Credit, a Fort Worth, Texas-based provider of online credit solutions to non-prime consumers, has changed its IPO terms to 12.4 million shares being offered at $6.50 per share. It previously filed to offer 7.7 million shares at between $12 and $14 per share. The company originally planned to go public in early 2016, offering 3.6 million shares at between $20 and $22, but postponed that offering. It plans to trade on the NYSE under ticker symbol ELVT, with UBS listed as left lead underwriter. It reports a $22 million net loss on $580 million in revenue for 2016. Shareholders include Sequoia Capital (27.2% pre-IPO stake) and Technology Crossover Ventures (22.2%). www.elevate.com

Liquidity Events

• BNP Paribas has acquired Compte Nickel, a French provider of payment account banking services. Reports are that the deal could have valued Compte Nickel at more than €200 million, while it raised over $10 million in VC funding from firms like Partech International. http://lemde.fr/2n6r7xF

• CMC Capital Partners and FountainVest Partners has sold their combined 5.9% equity stake in IMAX China Holding (HK: 1970) to an unidentified "international investment bank" at HK$39.72 per share. http://bit.ly/2nfnO7o

• Qatar Investment Authority has sold around a 2.5% stake in Banco Santander Brazil for $737 million, via a restricted stock offering. http://reut.rs/2oEDbqi

More M&A

• Boyner Holding, a Turkish retailer, is seeking to sell up to a 60% stake in its online fashion site Morhipo.com at an enterprise value of around $160 million, per Reuters. http://reut.rs/2o0OpCy

• Cardinal Health (NYSE: CAH) is in talks to acquire the medical supply unit of Medtronic (NYSE: MDT) for nearly $6 billion, according to Reuters. http://reut.rs/2o4YKPr

• F-Secure, a listed Finnish cybersecurity company, has acquired Mac security app Little Flocker for an undisclosed amount. http://tcrn.ch/2oEo9B6

• MGM has agreed to acquire the stake it doesn't already own in pay-TV network Epix, via a buyout of partners Viacom (Nasdaq: VIAB) and Lions Gate Entertainment (NYSE: LGF). http://on.wsj.com/2odbtjJ

• PacWest Bancorp (Nasdaq: PACW) has agreed to acquire Los Angeles-based CU Bancorp (Nasdaq: CUNB) for around $705 million in cash and stock. http://reut.rs/2oEzC3G

Fundraising

• Committed Advisors of Paris has closed its third private equity secondaries fund with €1.025 billion in capital commitments. www.committedadvisors.com

• Erik Torenberg (ex-Product Hunt) and Ben Casnocha (ex-chief of staff to Reid Hoffman) are raising a $50 million VC fund, according to TechCrunch. http://tcrn.ch/2p32rCH

It's Personnel

• Ram Gupta, former president and CEO of Cast Iron Systems (acquired by IBM), has joined Nexus Venture Partners. http://bit.ly/2nNGU0O

• David Lynn, former chief counsel to the SEC's division of corporate finance, has joined law firm Jenner & Block as a Washington, D.C.-based partner. www.jenner.com

• Kenneth McRay and Glynell Bradley have joined Crescent Capital Group as SVPs of investor relations. McRay previously was with Pinebridge Investments, while Bradley was at Goldman Sachs. www.crescentcap.com

Final Numbers
Dan Primack