Jan 25, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

We're going to skip straight to the BFD today, because it's a real stunner. But if you're looking for something else of interest, check out Kim Hart and Dave McCabe's piece on The Plot to Kill Net Neutrality. Remember that people can sign up for Pro Rata by going here, and you can email me feedback or tips by either hitting reply to this message, or by using http://axios.com/tips.

The BFD: Cisco takes out AppDynamics

At noon local time in Los Angeles yesterday, top executives from AppDynamics were meeting with prospective IPO investors. This came just hours after the company had bumped up its proposed offering range, which would have given it a fully-diluted value of $2.2 billion on the high end. And, like with most every other meeting, this one had gone well. In fact, word is that the AppDynamics IPO was oversubscribed after its first day on the road.

Then the execs packed up and hopped a previously-unscheduled flight back to San Francisco. Several hours later, AppDynamics announced that it would be acquired by Cisco for $3.7 billion in cash. At the time of the announcement, several AppDynamics employees were already in New York, prepping for Thursday morning's listing festivities.

Sources say that AppDynamics and Cisco had held several occasional discussions over the past couple of years, but that takeover talks only really intensified in recent weeks. Other companies like Splunk also kicked the M&A tires, although Cisco's was the only official offer.

• ROI math: AppDynamics had raised over $330 million in VC funding, most recently at a $1.9 billion valuation in late 2015. Shareholders include Greylock (20.8% stake), Lightspeed Venture Partners (20.8%), IVP (8.3%), Kleiner Perkins (7.1%), General Atlantic (5%), Altimeter Capital Management, Adage Capital Management, ClearBridge, Industry Ventures, Goldman Sachs and Cross Creek Advisors.

• Why it's the BFD: AppDynamics was expected to not only be the year's first tech IPO, but also a bellwether for the slew of enterprise software companies that are prepping their own 2017 offerings.

• Reporter's notebook: I had an interview scheduled with AppDynamics CEO David Whadwani for Thursday morning, right after the company was to begin trading. Then it was put on hold, via an email earlier this week. I should have known something was up...

• Still no: Despite the AppDynamics pull-out, I still believe the upcoming Snapchat IPO will neither encourage nor discourage other tech companies to go public. I've gone into greater depth here.

One quote that didn't make that piece came from Jay Hoag, the co-founder of Technology Crossover Ventures (and pre-IPO backers of both Netflix and Facebook): "Saying that Snapchat will have huge implications for other tech IPOs is like saying that every NFL team is looking for 6th round draft picks with limited athletic ability, just because it worked for the Patriots and Tom Brady. Some things just are unique and don't translate more broadly."

Venture Capital Deals

• Ring, a Santa Monica, Calif-based maker of video-equipped doorbells, has raised $109 million in new VC funding. New investors DFJ Growth, Goldman Sachs Investment Partners and Qualcomm Ventures were joined by Richard Branson, True Ventures, American Family Insurance and Shea Ventures. http://bit.ly/2kikB1Y

• SentinelOne, a Palo Alto, Calif.-based provider of endpoint security solutions, has raised $70 million in Series C funding. Redpoint Ventures led the round, and was joined by Sound Ventures and return backers Third Point Ventures, Data Collective, Granite Hill Capital Partners, Westly Group and SineWave Ventures. http://tcrn.ch/2kikS4X

• Divergent 3D, a Los Angeles-based development and licensing company focused on the automotive sector, has raised $23 million in Series A funding led by Horizons Ventures. www.divergent3d.com

• Button, a New York-based affiliate network for mobile apps, has raised $20 million in Serie B funding. Norwest Venture Partners led the round, and was joined by return backers Redpoint Ventures, DCM and Greycroft Partners. http://bit.ly/2jYYqAh

• Connect Biopharmaceuticals, a Chinese developer of immune modulators for the treatment of autoimmune diseases and cancer, has raised $20 million in Series A funding. Qiming Venture Partners led the round, and was joined by Northern Light Venture Capital, Lapam Capital and Cowin Venture Capital. www.connectbiopharm.com

• LiquiGlide, a Cambridge, Mass.-based developer of slippery coatings for the industrial and food manufacturing markets, has raised $16 million in new VC funding. Backers include Structure Capital, Valia Investments, Struck Capital and Pilot Grove. http://tcrn.ch/2jsQe87

• Sourcepoint, a New York-based content compensation platform for digital publishers, has raised $16 million in Series B funding. Northzone Ventures led the round, and was joined by return backers Spark Capital, Foundry Group, Accel Partners and Greycroft Partners. http://bit.ly/2jpqdcf

• TripActions, a Mountain View, Calif.-based provider of business travel solutions, has raised $14.6 million in Series A funding. Zeev Ventures led the round, and was joined by Lightspeed Venture Partners. http://bit.ly/2jYpHDn

• Redox, a Madison, Wis.-based integration platform for digital healthcare applications, has raised $9 million in Series B funding. RRE Ventures led the round, and was joined by return backers .406 Ventures, HealthX Ventures and Flybridge Capital Partners. http://bit.ly/2jwzLjr

• Dalia, a Berlin-based developer of real-time market and opinion data via a network of smartphone users, has raised $7 million in Series A funding. Balderton Capital led the round, and was joined by return backers Wellington Partners and IBB-Bet. www.daliasearch.com

• Vioguard, a Bothell, Wash.-based developer of ultraviolet disinfection solutions, has raised $5 million in Series A funding from Imagen Capital Partners. www.vioguard.com

• Prattle, a St. Louis-based provider of sentiment data solutions for research analysts and traders, has raised $3.3 million in seed funding. GCM Grosvenor led the round, and was joined by Correlation Ventures, NEA and Plug and Play Ventures. http://read.bi/2jYLeLD

• Cybellum, a Tel Aviv-based cybersecurity startup focused on "zero-day attacks," has raised $2.5 million in seed funding led by Blumberg Capital. http://bit.ly/2jmoVyQ

• Community Elf, a Pittsburgh-based developer of social content marketing solutions, has raised $2 million in Series A funding led by Topanga Partners. http://bit.ly/2jR1R9Y

• Voodoo Manufacturing, a -based 3D printing manufacturing startup, has raised $1.4 million in new VC funding led by KPCB Edge. http://tcrn.ch/2jmJkDV

Private Equity Deals

• Argentum Medical, a Geneva, Ill.-based maker of wound care products, has secured an undisclosed amount of growth equity funding from Shore Capital Partners. www.silverlon.com

• Bain Capital has dropped out of the bidding for bankrupt sports equipment maker Performance Spots Group, clearing the way for approval of a $575 million stalking horse bid from Sagard Capital Partners and Fairfax Financial (TSX: FFH), according to The Globe and Mail. https://tgam.ca/2kmvlzt

• Golden Gate Capital has agreed to acquire Bob Evans Restaurants from Bob Evans Farms (Nasdaq: BOBE) for $565 million. http://on.wsj.com/2jOQP59

• Ontario Municipal Employees Retirement System is in advanced talks to invest $1 billion in support of Fairfax Financial's (TSX: FFH) pending $5 billion acquisition of Swiss insurer Allied World Assurance Co. (NYSE: AWH), according to Bloomberg. http://bloom.bg/2keNrAa

• Solera Holdings, a Westlake, Texas-based portfolio company of Vista Equity Partners, has acquired Digidentity, a Dutch provider of online identity authentication and security solutions. No financial terms were disclosed. Solera already was a minority shareholder in the company, via a small 2010 investment. www.digidentity.eu

More M&A

• James Packer has hired UBS to find a buyer for his approximately 8% stake in Ten Network (ASX: TEN), per The Australian. http://bit.ly/2jYVe7C

• Rio Tinto (ASX: RIO) has agreed to sell Australian thermal coal unit Coal & Allied Industries to Chinese government-owned Yancoal Australia for A$2.45 billion in cash. http://reut.rs/2jRjfvg

Fundraising

• AMP Ltd. (ASX: AMP), an Australian wealth management firm, has shuttered its venture capital unit. http://reut.rs/2k31kEf

• Ardian, a France-based alternative investment firm with around $60 billion in AUM, is considering the formation of a social impact fund, according to Dow Jones. http://bit.ly/2kszcqD

• The Blackstone Group has closed its seventh private equity secondaries fund with $7.5 billion in capital commitments. It's a major step up in size from the firm's sixth secondaries fund, which closed on $4.4 billion in 2014. www.blackstone.com

• Cerberus Capital Management has closed its fourth global opportunistic real estate fund with $1.8 billion in capital commitments. Hodes Weill Securities served as placement agent.

• Genstar Capital Partners is raising its eighth private equity fund, per SEC filings. No target was disclosed. The firm currently is investing out of a $2 billion seventh fund that closed in mid-2015. www.genstasrcap.com

• PWP Growth Equity is raising upwards of $750 million for its second fund, per a regulatory filing. http://bit.ly/2jwJ4j6

It's Personnel

• Bradford Berenson is joining TPG Capital as general counsel. He currently is with General Electric as VP and senior counsel for litigation and legal policy.

• Andrew Ceresney, former director of enforcement for the SEC, is rejoining law firm Debvoise & Plimpton as co-chair of the firm's litigation department. http://nyti.ms/2kiy75F

• Ryan Roberts has joined Pritzker Group Private Capital as an investment partner and co-head of the firm's services team. He previously was with Madison Dearborn Partners. www.pritzkergroup.com

• Andy Tse has joined Baird Capital as a partner focused on deal opportunities in Asia. He previously was a managing director with AIF Capital. www.bairdcapital.com

• TSG Consumer Partners has promoted both Dan Costello and Michael Layman to managing directors. www.tsgconsumer.com

• Ted Wang has joined Cowboy Ventures as a partner. He previously was a partner with law firm Fenwick & West, where he will remain of counsel. http://bit.ly/2jZ9T2q

Final Numbers: U.S. Corporate Venture Capital
Dan Primack