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From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.net

Subject:

Term Sheet -- Thursday, January 3

Date:

03-01-2013 15:15:59
Message

Term Sheet Private Equity Venture Capital Banking Tech Hedge

Term Sheet by Dan Primack

Thursday -- January 3, 2013
Email Dan | Follow Dan on Twitter | Subscribe | Send an anonymous tip

Random Ramblings
When writing yesterday about VC-backed IPO data for 2012, I made a point to break down the numbers
without Facebook. As if to say: Heres what the market really looked like, without that giant outlier.
But, upon reflection, it was a mistake. When it comes to venture capital, and VC-backed exits, its the
outliers that matter most. Or, to use a sports metaphor, venture capitalists get paid to hit for power rather
than for average.
Think about Kleiner Perkins Caufield & Byers. LPs have told me that if you remove its 1999 investment in
Google, the fund is relatively pedestrian (the relativity is to a strong vintage year). But that deal helped
make KPCB IX one of the best-performing VC funds of all time, and cemented Kleiner Perkins as one of
the most desirable partners for early-stage tech entrepreneurs and institutional investors alike. The big win
mattered. The less successful investments were forgotten.
Remember, venture capital risk isn't that a particular portfolio company could fail. It's that 20 portfolio
companies could fail, or that 10 could fail and the other 10 would return cost or come out just barely in the
black.
Facebook was the outlier reward. It shouldn't be removed from an IPO analysis because it skews the
results. Instead, it should be highlighted because the skew is what matters most.
*** There seemed to be a lot of Silicon Valley hand-wringing yesterday over the Avis-Zipcar deal, with
some suggesting that this will lead to the needless destruction of a successful tech disruptor. Lets leave
aside, for a moment, that Zipcar isnt really a tech company. Or that its not based in Silicon Valley. Or that

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its profits are nothing to write home about.

Instead, lets focus on what really seems to be the underlying issue: Zipcar can no longer be cool if owned
by a staid incumbent like Avis.
Look, I understand that acquisitions often dont work. Sometimes its because of culture clashes.
Sometimes its the result of a big fish in a small pond being transformed into a small fish in a big pond (and
the resource allocations that come along with it or dont). Sometimes the expected synergies just dont
come to fruition.
But bashing the deal based on coolness is absurd. People ultimately use most products or services
because of usefulness, effectiveness, etc. Cool may get a certain demographic in the door, but its not why
they stay. Moreover, cool disappears over time. Dont believe me? Just check out this list of music albums
that turn 20 this year. I remember feeling quite cool blasting my In Utero cassette in 1993. Would I still?
Probably not and it has nothing to do with selling out...
*** Two final Avis-Zipcar notes:
1. There were some tech blog suggestions yesterday that the deal could face legal challenges, based on a
press release issued by a class action plaintiffs attorney. For context, that same law firm issued three
similar press releases on Monday alone. M&A ambulance chasers.
2. Also read an assertion that this sale was about greedy VCs. Some of the investors have been in for ten
years, and actually would have done better by selling shares in the IPO (which almost no one did). Great
return for the VCs, but hardly some quick flip.
*** Deal data: Global M&A totaled $2.6 trillion in 2012, according to Thomson Reuters. This actually
represents a 2% increase over 2011, and was bolstered by spinoffs and divestitures (47% of the
total).Global buyside private equity totaled $321.4 billion, which was basically flat over 2011 levels.
*** Drop a dime: Just a reminder that you can send me anonymous tips by using this link. So if you know
some deal, fundraising or personnel scoop that you're willing to (secretly) share, you know I want to hear
it...

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Dan Primack: VCs to score big on Zipcar sale
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John Birger: What I learned aboard Shell's grounded Alaskan oil rig

The Big Deal

CVC Capital Partners has agreed to acquire Cerved Group SpA, a Milan, Italy-based corporate
intelligence and rating agency, from Bain Capital and Clessidra. The deal is valued at approximately 1.1

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billion (including debt). Other suitors had included BC Partners and Permira. www.cerved.com

VC Deals
Leap Motion, a San Francisco-based provider of motion-control software and hardware, has raised $30
million in new VC funding from return backers Founders Fund and Highland Capital Partners.
www.leapmotion.com
Pluralsight, a Layton, Utah-based provider of online education for software developers, has raised $27.5
million from Insight Venture Partners. This represents the first round of outside capital for Pluralsight,
which was founded in 2004. www.pluralsight.com
Crescendo Bioscience, a South San Francisco, Calif.-based developer of quantitative blood tests for
rheumatoid arthritis and other auto-immune diseases, has raised $28 million in Series D funding. Skyline
Ventures and Safeguard Scientifics co-led the round, and were joined by return backers Mohr Davidow
Ventures, Kleiner Perkins Caufield & Byers and Aeris Capital. Ferghana Partners served as placement
agent. www.CrescendoBio.com
BuzzFeed, a New York-based social publisher, has raised $19.3 million in Series D funding. New
Enterprise Associates led the round, and was joined by return backers RRE Ventures, Hearst Interactive,
Softbank Capital and Lerer Ventures. Also participating as new investors were Buddy Media co-founders
Michael and Kass Lazerow. www.buzzfeed.com
eZono AG, a German developer of portable tablet ultrasound systems, has raised $10 million in VC
funding led by MVM Life Science Partners. www.ezono.com
Heart Metabolics Ltd., a London-based developer of drugs for the treatment of heart failure symptoms in
patients with hypertrophic cardiomyopathy, has raised $4 million in its first tranche of Series A funding.
Backers include the Trans Tasman Commercialisation Fund (Australia) and AshHill Investments
(Kentucky). www.heartmetabolics.com
Remitly, a Seattle-based provider of online money transfer solutions, has raised $2.6 million in new VC
funding. Trilogy Equity Partners led the round, and was joined by Bezos Expeditions and
TomorrowVentures. www.remitly.com

Private Equity Deals

All Systems Holding LLC, a Pittsburgh-based provider of managed staffing and technical outsourcing
solutions, has raised an undisclosed amount of private equity funding from MidOcean Partners.
www.systemoneservices.com
Broder Bros Co., a distributor of imprintable apparel, has acquired Imprints Wholesale, a Denver-based
wholesale clothing distributor in the Rocky Mountain region. No financial terms were disclosed. Broder
Bros. is a portfolio company of Littlejohn & Co. www.broderbros.com
Community Intervention Services Inc., a portfolio company of H.I.G. Capital, has acquired Access
Family Services Inc., a Charlotte, N.C.-based provider of outpatient behavioral health services. No
financial terms were disclosed. www.accessfamilyhealth.com
Confie Seguros, a personal insurance company focused on Hispanic consumers, has acquired three

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Florida insurance brokerages: Second City Insurance (Holiday, FL), Insurance of Lauderdale Lakes
(Lauderhill, FL) and Harmony Insurance (Kissimmee, FL). No financial terms were disclosed. Confie
Seguros was recently acquired by ABRY Partners. www.confieseguros.com
Fortegra Financial Corp. (NYSE: FRF) has acquired a majority stake in ProtectCELL, a provider of
wireless device protection plans and mobile services. No financial terms were disclosed. Quarton Partners
advised ProtectCELL on the deal. Fortegra is controlled by Summit Partners.
www.protectcelladvantage.com
Freeman Spogli & Co. and the Pohlad family have acquired MicroStar Logistics, a Greenwood Village,
Colo.-based provider of keg management services to the U.S. craft beer industry, from Trilantic Capital
Partners. No financial terms were disclosed for the deal, which included participation by company
management. www.microstarkegs.com
iQor, a provider of customer interaction and outsourcing solutions, has acquired the CCT Group, a
provider of contact center outsourcing solutions, from Headland Capital Partners. No financial terms were
disclosed. IQor is a portfolio company of Huntsman Gay Global Capital. www.iqor.com
Nimes Capital has acquired Pacific Island Restaurants Inc. from Brentwood Associates for an
undisclosed amount. PIR is the sole franchisee of Pizza Hut and Taco Bell throughout Hawaii, Guam and
Saipan. www.nimescapital.com
Press Ganey Associates, a South Bend, Ind.-based portfolio company of Vestar Capital Partners, has
acquired Morehead Associates Inc., a Charlottebased provider of employee and physician engagement
surveys and other HR solutions for healthcare systems and hospitals. No financial terms were disclosed.
Brookwood Associates managed the process. www.moreheadassociates.com
Sentinel Capital Partners has acquired Hospice Advantage, a Bay City, Mich.-based hospice
organization. No financial terms were disclosed. www.hospiceadvantage.net
Sun Capital Partners has acquired a majority stake in Paragon Print and Packaging, a British provider
of packaging and outsourced services to the private label fresh and chilled food market. No financial terms
were disclosed. www.suncappart.com
Sneaker Villa Inc., a Philadelphiabased footwear and apparel retailer, has raised an undisclosed amount
of private equity funding from Goode Partners. Peter J. Solomon Co. advised Sneaker Villa on the deal.
www.ruvilla.com
SRS Software LLC, a Montvale, N.J.based provider of electronic health record technology and services,
has raised an undisclosed amount of private equity funding from Thoma Bravo. www.srssoft.com
Summit Park has acquired NSi Industries, a Huntersville, N.C.based maker of time switches, insulated
connectors, and other electrical products. No financial terms were disclosed. www.nsiindustries.com
Teachers' Private Capital has completed its previously-announced acquisition of Plano Molding Co., a
Plano, Ill.-based supplier of outdoor sports storage systems. No financial terms were disclosed. Sellers
include Tinicum Capital Partners. Harris Williams & Co. managed the process. www.planomolding.com
Tech Air, a Danbury, Conn.-based distributor of gases and related welding supplies, has acquired Esquire

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Gas Products Co., a provider of dry ice and liquid carbon dioxide. No financial terms were disclosed. Tech
Air is a portfolio company of CI Capital Partners. www.techair.com
Trinity Hunt Partners has acquired a majority stake in Lakeview Health Systems, a Jacksonville, Fla.based substance abuse treatment company. No financial terms were disclosed. www.lakeviewhealth.com
Wellspring Capital Management has acquired National Seating & Mobility Inc., a Nashville, Tenn.
based provider of rehab technology solutions for individuals with permanent or long-term mobility loss, from
Ridgemont Equity Partners. No financial terms were disclosed. Edgeview Partners managed the process.
www.wellspringcapital.com
KPS Capital Partners has completed a recapitalization for portfolio company WWRD Holdings Ltd., a
maker of luxury home and lifestyle products sold under such brands as Waterford and Wedgwood. The
two-party transaction included WWRD raising a $167.5 million round of financing ($117.5m revolving credit
facility/$50m term loan), of which $50 million was used for a shareholder dividend. www.wwrd.com
Trinity Hunt Partners has completed a recapitalization for portfolio company Eating Recovery Center, a
Denverbased center for eating disorders. No financial terms were disclosed.
www.eatingrecoverycenter.com

PE-backed IPOs
No PE-backed IPO news this morning.

Exits
Alta Communications has sold Boston-based mobile data and research firm Yankee Group to The 451
Group for an undisclosed amount. www.the451group.com
Al Jazeera has agreed to acquire cable television network Current TV from shareholders like Al Gore,
Blumberg Capital and Yucaipa Cos. No financial terms were disclosed, but the deal is reported to be worth
between $400 million and $500 million.
Goode Partners has agreed to sell womens fashion boutique chain Intermix to Gap Inc. (NYSE: GPS) for
approximately $130 million, according to the WSJ. www.intermixonline.com
Navis Capital Partners and Rabo Capital have told Thai duck processor Bangkok Ranch to a
consortium led by company co-founders Joseph Suchaovanich and Gertjan Tomassen for approximately
$188 million.

Other Deals
Aker Solution, a listed Norwegian oil services company, has agreed to acquire Separation Specialists
Inc., a Shafter, Calif.-based provider of products for oil and water separation. No financial terms were
disclosed. www.separationspecialists.com
Hormel Foods Corp. (NYSE: HRL) has agreed to buy the Skippy peanut butter brand from Unilever PLC
(LSE: ULVR) for $700 million. www.hormel.com
Microsoft Corp. (Nasdaq: MSFT) has acquired id8 Group R2 Studios Inc., a home media and

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automation technology startup formed by former Sling Media CEO Blake Krikorian, according to Dow
Jones. No financial terms were disclosed. www.microsoft.com
NCR Corp. (NYSE: NCR) has acquired uGenius Technology Inc., a Sandy, Utah-based provider of video
banking software. No financial terms were disclosed. www.ugenius.com

Firms & Funds

Battery Ventures is planning to begin raising its tenth fund with a $650 million target, according to
VentureWire. www.battery.com
Clearlake Capital Group has closed its third fund with more than $785 million in capital commitments. The
Santa Monica, Calif.-based private equity firm focused on companies undergoing complex financial,
operational, or structural change. www.clearlakecapital.com

Moving In, Up and On

Andy Anderson has joined Blackstreet Capital as vice president of portfolio finance. He previously was
senior controller with Ann's House of Nuts. www.blackstreetcapital.com
Charlesbank Capital Partners has promoted Kevin Brown to chief financial officer. He previously was
the private equity firms senior VP of finance and accounting. www.charlesbank.com
Bill Rhodes has joined Linden Capital Partners, a Chicago-based private equity firm focused on the
healthcare sector, as an operating partner. He previously was senior VP of corporate strategy and
development with Becton, Dickinson & Co. (NYSE: BDX). www.lindenllc.com
Berkshire Partners has promoted three professionals to managing directors: Kenneth Briong, Matthew
Janchar and Greg Pappas. www.berkshirepartners.com

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