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From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.com

Subject:

Term Sheet -- Monday, October 11

Date:

11-10-2010 13:52:31
Message

Fortune Finance Street Sweep Term Sheet Economics Tech Wall Street Washington

The Term Sheet by Dan Primack

Monday -- October 11, 2010
Email Dan | Follow Dan on Twitter | Subscribe

Monday Mouth-Off
The sun is shining, the Dow just passed 11k and some of you are home celebrating the most famous man
to ever get lost. In other words, it's time for some Monday Mouth-Off.
First up are some replies to Friday's column, which concerned direct secondary pools aimed at specific
companies like Twitter and Facebook.
L writes: "The companies themselves benefit too from having these pools be the bigger buyers of shares
on secondary market. As you know, many of the companies you mentioned are uncomfortably close to
500 shareholder threshold that may force them to do more public reporting. Some have tried to restrict
secondary buyers to those who have an existing position to deal with this issue. But either way they'd all
prefer secondary buying was concentrated in large quasi-institutional pools rather than diffuse retail
investors."
Nick: "I could understand investing in Twitter through Chris Sacca, because he should have some inside
information on Twitter's revenue, plans, etc. But there is no way I'd buy stock in Twitter or Facebook or
anything else through a fund manager who admits to knowing nothing more than what he reads in the
Journal or on TechCrunch."
Paul: "Please stop using the term 'super-angel' to describe seed-stage investors who take third-party

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capital. Call them VCs, because that's what they are."

*** David on Henry Kravis' $100 million donation to the Columbia Business School: "Not even a snarky
comment about how this is an example of the rich getting richer? The contrast with Zuckerberg's $100
million donation to Newark public schoolkids is staggering."
*** Will on Genzyme: "I accept your thesis that private equity firms would have to overpay for a company
like Genzyme, because they can't offer the same R&D synergies as a big pharma like Sanofi. But let's play
it out a few steps: Might it not be worth overpaying for Genzyme, and using it as the basis of an investment
platform? I don't just mean adding onto Genzyme, but also taking smaller parts of Genzyme and spinning
them out to make more targeted acquisitions? Many private equity firms create savings by shared services
throughout portfolios, but there always has to be that first investment or two before there even is a
portfolio."
*** Carol: "Who will be filling in for you when you're out on paternity leave?" My pinch-hitter will be Katie
Benner, who has been writing for Fortune's magazine and website since 2006. She's smart, able and (most
importantly) willing. I'm asking that if you have a PR list for news releases or other alerts, please add Katie
at bennerfortune@gmail.com. Thanks.

5 things you should read @Fortune.com

Pre-Marketing, including Silicon Valley's disruption deficit disorder, the return of British buyouts, big

pharma's wicked problem and why to beware of "free public wifi."

Actual hostility: Genzyme said, Sanofi said

Mina Kimes: A $6 trillion investing opportunity

A venture capitalist's confession: Why I blog

What the bee investigator didn't tell The New York TImes

The Big Deal

Bain Capital has agreed to acquire The Gymboree Corp. (Nasdaq: GYMB). The deal is valued at $1.8
billion, or $65.40 per share (57.4% premium to share price before reports of a possible deal). Credit Suisse
and Morgan Stanley have committed leveraged financing. www.gymboree.com

VC Deals

GC Aesthetics Ltd., a Dublin, Ireland-based maker of medical devices for the global aesthetics industry,
has raised $30 million in private equity funding from Montreux Equity Partners. www.gcaesthetics.com
TriReme Medical, a Pleasanton, Calif.-based developer of catheters and stents for the treatment of
vascular disease, has raised $17 million in Series D funduing. Bio*One Capital led the round, and was
joined by return baclers Three Arch Partners and Adams Street Partners.
ALung Technologies Inc., a Pittsburgh-based developer of artificial lung devices for the treatment of
respiratory failur, has raised $14 million in Series A funding. Eagle Ventures led the round, and was joined
by Birchmere Ventures. www.alung.com
Light Blue Optics, a UK-based developer of miniature projection systems, has raised $13 million in new
VC funding. DFJ Esprit led the round, and was joined by Christie Digital Systems Canada, WhiteGold
Fund Management and return backers investors Robert Bosch Venture Capital GmbH, Earlybird Venture

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Capital, Capital-E and NESTA. www.lightblueoptics.com

Skyline Financial Corp., a Los Angeles-based direct mortgage lender, has raised $8.2 million in Series B
funding. GRP Partners led the round, and was joined by Chaparal Investments and Dallas Capital
Management. www.skylinefinancialcorp.com
NitroSecurity Inc., a Portsmouth, N.H.-based, has raised $6 million in Series B funding. Return backers
include Brookline Venture Partners, First Analysis and NewSpring Ventures. The company also acquired
LogMatrix, a Marlborough, Mass.-based provider of risk-based assessment and correlation technologies,
for an undisclosed amount. LogMatrix had raised around $20 million from firms like Advent International,
Blue Rock Capital and Hudson Venture Partners. www.nitrosecurity.com
MedicAnimal.com, a European online animal pharmacy, has raised 5 million in VC funding led by Iris
Capital. www.medicanimal.com
ReCellular, a Dexter, Mich.-based collector and recycler of personal electronics, has raised an undisclosed
amount of VC funding from Beringea. www.ReCellular.com
AdKeeper, a New York-based online ad startup launched by About.com founder Scott Kurnit, has raised
an undisclosed amount of VC funding. Backers include True Ventures, DCM, Spark Capital, First Round
Capital, New York times Co., Betaworks and Lerer Ventures. www.adkeeper.com
AnovaStorm, an Austin, Texas-based provider of web deployment solutions, has raised $2 million in
Series A funding led by CAG Investments. www.anovastorm.com

Private Equity Deals

The Blackstone Group is among those interested in acquiring Egg, the online lender being sold by
Citigroup, according to The Financial Times. Barclays also is reported to be interested. Egg could go for up
to 350 million, compared to the 575 million Citi paid to acquire Egg in 2007. www.citi.com
Baring Private Equity Asia has offered to acquire Harbin Electric Inc. (Nasdaq: HRBN), a Chinese
maker of electric motors. The $24 per share deal would value Harbin Electric at approximately $745 million.
Baring is partnering on the deal with Harbin chairman and CEO Tianfu Yang, who owns 31.1% of the
company's common stock. www.harbinelectric.com
Extended Stay Inc. has emerged from Chapter 11 bankruptcy protection. The discount hotel chain was
acquired for $3.93 billion by The Blackstone Group, Centerbridge Partners and Paulson & Co.
www.extendedstayhotels.com
Focus Brands, a portfolio company of Roark Capital, has agreed to acquire Auntie Anne's, a Lancaster,
Penn.-based franchisor of a hand-rolled soft pretzel stores. No financial terms were disclosed.
www.focusbrands.com
Torch Hill Investment Partners has acquired Jameson LLC, a Clover, S.C.-based provider of ruggedized
military expeditionary lighting systems, from Carousel Capital. No financial terms were disclosed.
www.jamesonllc.com

PE-backed IPOs

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Le Gaga Holdings Ltd., a Chinese grower of in-greenhouse vegetables, has filed for a $100 million IPO. It
plans to trade on the Nasdaq under ticker symbol GAGA, with BoA Merrill Lynch and UBS serving as colead underwriters. The company reports around $41 million in revenue for the year ending March 31, 2010.
Shareholders include Sequoia Capital China (18.9% pre-IPO stake), SIG China Investments (7.44%) and
Walden International (5.48%).

Exits
Linsalata Capital Partners is looking to sell Transtar, an Ohio auto transmission parts distributor that
could be worth upwards of $700 million, according to Reuters. Harris Williams & Co. is managing the
process. www.transtar1.com

Other Deals
CNOOC Ltd., China's largest offshore oil company, has agreed to acquire a $1.1 billion stake in a U.S.
share oil and gas field from Chesapeake Energy Corp. (NYSE: CHK).

Firms & Funds

Alsop Louie Partners has closed its second fund with $98.6 million in capital commitments, as first
reported by peHUB. The firm also has added three partners: Joe Addiego (former In-Q-Tel partner), Bill
Coleman (co-ffounder of BEA Systems) and Jim Whims (former TechFund Capital partner). www.alsoplouie.com
Apollo Global Management is raising $525 million for a fund that would invest in life insurance
settlements. In related news, the WSJ reports that Apollo has expressed interest in a portfolio of life
insurance policies held by Belgium's KBC Bank.
Barclays Capital has raised its sixth European infrastructure fund with 645 million in capital
commitments. www.barclayscapital.com
Spence Clunie is launching a 1 billion fund for distressed infrastructure companies and assets, according
to eFinancialNews. The effort is called Ancala Partners. Clunie previously was with Macquarie Group and,
before that, ran acquisition finance for Dresdner Kleinwort Wasserstein.

Moving In, Up and On

Jeremy Nielson has joined Scalar Partners to launch a new LP advisory practice. He previously was the
first managing director of the State of Utah's private equity program. www.scalarpartners.com

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