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From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.com

Subject:

Term Sheet -- Thursday, December 16

Date:

16-12-2010 14:58:29
Message

Fortune Finance Street Sweep Term Sheet Economics Tech Wall Street Washington

The Term Sheet by Dan Primack

Thursday-- December 16, 2010
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Random Ramblings
Yesterday I had lunch at Henriettas Table in Harvard Square, which is beginning to resemble a upscale
Bucks of Woodside (i.e., lots of local VC diners). For a suburbanite like me particularly one who was
running late there are two easy choices for parking: An overpriced garage in the basement of the Charles
Hotel, or a concrete-encased set of meters right across the street.
These meters are risky, because the only exit leads to a one-way street in the wrong direction. But I saw an
empty spot, so pulled in with a minor surge of miserly exhilaration. And then devastation: It was a ZipCar
spot.
Two immediate thoughts: (1) Screw you ZipCar, and (2) I should make some calls about the company,
given that it had just announced $21 million in new VC funding. Seemed to be a possible sign of weakness,
which would lead back to schadenfreude over point number one.
As many of you know, ZipCar is a VC-backed car-sharing company currently in registration for a $75 million
IPO. Its most recent financials show a $10.4 million loss on $79 million in revenue for the first six months of
2010, compared to a $4.6 million loss on $57 million in revenue during the year-earlier period.
Not the worst trajectory for an IPO candidate, given that most of the extra expenses seemed to be for
expansion. Plus, public markets often go gaga over an unusual sector plays with at least a few potential

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acquirers (privately-held Enterprise Rent-a-Car continues to be my odds-on favorite, since I think Hertz
could run into some FTC issues).
But why that new $21 million, which was provided by new investors Meritech Capital Partners ($20m) and
Pinnacle Ventures ($1m)? First, its a Series G round, which often seems to stand for glitch. Second,
none of the companys existing backers Greylock, Benchmark Capital, Revolution, Smedvig Capital
participated.
Not surprisingly, leading cleantech blogger Katie Fehrenbacher was among those who wondered if
ZipCars highly anticipated IPO is on the rocks.
After speaking with some folks familiar with the situation (yes, there was some selection bias at play), my
understanding is that things actually are much healthier than they would otherwise appear.
ZipCar did indeed plan to have gone public by now, but put things on hold after running into unexpected UK
anti-trust troubles with its planned acquisition of British car-sharing company Streetcar. Regulators finally
gave the green light late last month, and ZipCar has once again revved up the IPO engines with plans to
float early in Q1 2011. The $21 million is being viewed as a sort of bridge financing.
Im still troubled by the lack of participation by existing investors, although Revolutions Steve Case has just
hopped on the ZipCar board. Plus, word is that Meritech had tried to participate in earlier ZipCar rounds,
but couldnt get in. It typically invests up to $25 million in its portfolio companies, and probably doesnt
expect to be tapped again.
Maybe folks are trying to snow me on this one, but I honestly dont think so. And, if Im wrong, at least it will
be easier to park in Cambridge.

5 things to read @Fortune.com

Pre-Marketing, including why the WSJ distrusts companies that pay down debt, a new UBS dress
code for retail bankers, Stephen Colbert goads Goldman Sachs, building a better VC syndicate and
why China is no longer the largest U.S. creditor.

Shawn Tully: How to navigate the bond rout

Andy Serwer: Why Warren Buffett is everywhere
Scott Woolley: What it means to be a libertarian in the digital age
Mina Kimes: Who are the feds really after? TCW or Gundlach?

The Big Deal

Micro-messaging service Twitter has raised $200 million in new VC funding, at a post-money valuation of
$3.7 billion. Kleiner Perkins Caufield & Byers led the round, and was joined by return backers like
Benchmark Capital, Institutional Venture Partners, Insight Venture Partners and Spark Capital. Early
investor Union Square Ventures did not participate, due to fund size restrictions (it also didnt do the last
round).
This is a big deal for several reasons, including that its the years second-largest venture capital
investment (just behind a $300m infusion for Better Place). For a full run-down of the deal, take a look at
this post on the Term sheet blog.

VC Deals

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Sungevity Inc., an Oakland, Calif.-based online sales company for residential solar service, has raised
$15 million in Series C funding. Brightpath Capital Partners and Oaklandimpact were joined by return
backers Greener Capital and Firelake Capital. The company has now raised more than $25 million.
www.sungevity.com
SpotXchange, a Denver-based online video advertising network, has raised $12 million in VC funding from
H.I.G. Growth Partners. www.spotxchange.com
PE International AG, a German provider of sustainability management software and consulting services,
has raised 8 million in VC funding from Siemens Venture Capital and GIMV. www.pe-international.com
Chip Path Design Systems, a Cupertino, Calif.-based developer of architectural design tools for
semiconductor development, has raised $3 million in Series A funding. Backers include Scientific Ventures,
Lanza techVentures and Xilinx Corp. www.chippath.com

Private Equity Deals

Actis is nearing an agreement to invest around $125 million into SuperMax Corp., an Indian maker of
razor blades, according to The Business Standard. The deal would be for a minority position of between
25% and 30%. www.act.is
Applied Global Technologies Inc., a Rockledge, Fla.-based provider of services to the video
conferencing market, has raised an undisclosed amount of private equity funding from Rock Hill Capital
Group. www.appliedglobal.com
Centre Partners has completed its $980 million purchase of San Diego-based Bumble Bee Foods from
Lion Capital. www.centrepartners.com
Leonard Green & Partners has completed its $8.50 per share acquisition of Prospect Medical Holdings,
which has simultaneously de-listed from the Nasdaq. Prospect operates five community-based hospitals in
the greater Los Angeles area. www.prospectmedicalholdings.com
iSigma Capital has agreed to acquire Japanese juice-maker Gold-Pak from Phoenix Capital for $57.3
million. www.i-sigma-capital.co.jp
KKR has invested an undisclosed amount in VATS Liquor Store, the largest nationwide liquor store chain
operator in China. No financial terms were disclosed. www.kkr.com
Madison Parker Capital has invested an undisclosed amount in Klone Lab, an Amesbury, Mass.-based
licensing and product marketing company for the performance sport, action sport, and outdoor industry.
www.klonemfg.com
The Riverside Co. has acquired Sunrise Windows Ltd., a Temperance, Mich.based maker of vinyl
windows and sliding doors, from FdG Associates. No financial terms were disclosed. BB&T Capital
Markets advised Sunrise Windows on the deal. www.sunrisewindows.com
Sun Capital Partners has acquired Harrys Fresh Foods, a producer of home-style refrigerated and
packaged foods for the retail and foodservice market. No financial terms were disclosed. The seller was
Basic American Foods Inc. www.suncappart.com

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Venio LLC, a portfolio company of DFW Capital Partners, has acquired the Keane Organization, a New
York-based provider of provider of unclaimed property communications, compliance and consulting
services. The deal included $40 million in senior debt and $23 million in mezz debt and equity co-invest
from Maranon Capital. www.keaneco.com
Vogo Fund, a South Korean private equity firm, said that it is looking to acquire a control stake in Woori
Finance Holdings. The 57% position being offered by the South Korean government is estimated to be
worth more than $6 billion.

PE-backed IPOs
3i Group is preparing to take portfolio company Norma public in the middle of 2011, according to a
Reuters interview with 3i executive Ulf von Haacke. Norma is a German maker of vehicle clamps, and was
acquired by 3i for 200 million in 2006. www.3i.com

Exits
The Riverside Company has sold GTI Diagnostics to Gen-Probe Inc. (Nasdaq: GPRO), for $53 million
in cash. GTI provides is a specialty diagnostics company focused on the transplantation, blood bank and
specialty coagulation markets.

Other Deals
Eaton Corp. (NYSE:ETN) has agreed to acquire the Tuthill Coupling Group, maker of pneumatic and
hydraulic quick coupling solutions, from Tuthill Corp. No financial terms were disclosed. www.eaton.com
United Bankshares Inc has agreed to acquire West Virginia-based Centra Financial Holdings Inc. for
approximately $186.9 million.

Firms & Funds

Lexington Partners has agreed to acquire a 470 million portfolio of LP interests in 33 private equity funds
from Lloyds Banking Group PLC. No financial terms were disclosed for the deal, which is expected to
close next quarter. www.lexpartners.com
Mubadala Development Group , a state-owned investment firm in Abu Dhabi, has agreed to invest an
additional $500 million into The Carlyle Group. Mubadala previously invested $1.35 billion for a 7.5% stake,
although no word on how large a position it will hold following the latest transaction. www.carlyle.com
VantagePoint Venture Partners is seeking to raise upwards of $1.5 billion for a late-stage greentech fund,
according to Greentech Media. www.vpvp.com

Moving In, Up and On

Dave Allen has joined NXT Capital, a Chicago-based commercial finance company, as a managing
director in charge of NXTs cash flow lending activities in the healthcare sector. He previously was cofounder of Freeport Financial. NXT also has hired former Freeport pro Joe Gambino as a vice president.
www.nxtcapital.com

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