Page 1 of 5

From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.com

Subject:

Term Sheet - - Wednesday, Sept. 29

Date:

29-09-2010 13:57:32
Message

Fortune Finance

Street Sweep

Term Sheet

Economics

Tech

Wall Street

Washington

The Term Sheet by Dan Primack

Wednesday -- September 29, 2010

Email Dan | Follow Dan on Twitter | Subscribe

Random Ramblings
A bunch of notes to kick off your Wednesday...
*** Just thinking aloud: There has been lots of VC market consternation over the lack of IPOs and meager performance
benchmarks. Could part of the correlation be owed to cleantech investments?
Here's what I mean: Lots of VC firms jumped into cleantech beginning in 2006 and 2007. Big bets on companies that were years away
from profitability (even in best-case scenarios). The bet wasn't so much on the technologies, as it was that the public markets would fall in
love with the "idea" of cleantech, much as they had fallen in love with dotcoms a decade earlier. Potential over profits.
Then the macro-economic crash occurred, and the capital markets shut for everyone (the deserving and the not). Many VCs were
suddenly left to support cap-intensive companies they had never planned to support, thus damaging portfolio values. Imagine, for
example, if 1998-vintage VC funds hadn't been able to access the capital markets -- and instead were required to hold onto their dotcoms
for a few more years. The public market emperors would have eventually recognized the lack of clothes, and gone to a department store.
Same thing with cleantech.
*** Speaking of cleantech IPOs: Biofuels company Amyris yesterday closed its first day of trading at $16.50 per share, a 3% bump from
its underwhelming IPO price. Better to be up than down, but the price remains far below the $25.26 per share price from the company's
Series B-1 round ($60m+). It's also lower than the $24.88 per share from the Series B round, $17.56 per share price from the Series C-1
round and the $18.75 per share price from the Series D round.
Key was to somehow participate only in the Series A ($2.17) or Series C ($12.46) rounds. Except that no one did.

file:///C:/Users/srinivas/AppData/Local/Temp/tmp.tmp

16-12-2015

Page 2 of 5

*** News #1: Private Equity Insider today reports that final bids are in for a secondary sale of around $300 million in KKR fund stakes.
Cogent Partners is managing the process, but the seller is undisclosed. I had heard that KKR itself had itself been considering a similar
sort of offering, but do not know if this is one in the same. Hope to have more info on this later today at the website.
*** News #2: WSJ today reports that former NY state comptroller Alan Hevesi may be nearing a guilty plea in the pay-to-play scandal. As
you might guess, I'll have a lot more to say about this soon (much of which will be giving kudos to Andrew Cuomo).
*** Personnel scoop: Matt Newton has stepped down as a partner with Columbia Capital, after 14 years with the Virginia-based venture
capital firm. His new gig is vice chairman of M&A at Pittshburgh-based Tristar Investors, a Columbia Capital portfolio company
that acquires ground leases underlying wireless communication sites.
Newton remains a partner on several Columbia Capital funds, including a $441 million fifth fund that closed earlier this year (it had held a
first close in late 2008, when still seeking $650 million plus a $100 million co-invest). All board seats, however, have been transferred over
to remaining Columbia staffers.
*** Listi-cle: Fortune.com today released its list of the 50 most powerful women in business. Notable names for the Term Sheet crowd
include Susan Wagner, vice chair of Blackrock (#26), and Mary Callahan Erdoes, CEo of asset management at JPMorgan Chase.

5 things you should read @Fortune.com

Pre-Marketing, including the "idiotic" notion of a new normal, career lessons from Wall Street II, the dangers of "trust network
sclerosis," startups from the heart and Bill Ackman meets Mark Zuckerberg's challenge.
The 50 most powwerful women in business
Scott Woolley: It's time to stop cheering "super wi-fi"
Colin Barr: The case against gold
M&A lesson: AOL values distribution more than creation

The Big Deal

GNC, a Pittsburgh-based nutritional products retailer, has filed for a $350 million IPO. Goldman Sachs and J.P. Morgan are serving as colead underwriters. Ares Management and Ontario Teachers Pension Plan acquired GNC in 2007 from Apollo Management. Apollo
had tried taking the company public in 2006, but later withdrew the offering.
This is a big deal because it seems to be a brand-name example of when secondary buyouts can work out for everyone. Apollo originally
paid $750 million to buy GNC in 2003, before unloading it for $1.65 billion.
We don't yet know what GNC is looking for as a public market cap, but do know that both company revenue and net income have been
steadily climbing since Ares and Ontario took over. For example, GNC reported a $51.1 gain on $920 million in revenue for the first six
months of 2010, compared to $37.4 million on $872 million for the same period in 2009. www.gnc.com

VC Deals

PVT Solar, a Berkeley, Calif.-based developer of solar thermal technology that captures heat from existing photovoltaic panels, has raised
$13.7 million in Series B funding. Sigma Partners led the round, and was joined by return backers Khosla Ventures and Energy &
Environment Investment (Japan). www.pvtsolar.com
Enbala Power Networks (f.k.a. Sempa Power), a Toronto-based developer of smart-grid technology, has raised $8 million in new VC
funding. EnerTech Capital, Chrysalix Energy Venture Capital and Export Development Canada were joined by return backers XPV Capital
and The Walsingham Fund. www.embala.com
Andera, a Providence, R.I.-based provider of customer acquisition solutions to financial institutions, has raised $7.5 million from Edison
Ventures. www.andera.com
Rypple, a Canadian provider of provider of social software for workplace feedback, has raised $7 million in new VC funding. Bridgescale
Partners led the round, and was joined by Edgestone Capital Ventures, Extreme Venture Partners, Peter Thiel, Seymour Schulich, Roger

file:///C:/Users/srinivas/AppData/Local/Temp/tmp.tmp

16-12-2015

Page 3 of 5

Martin and Joe Sigelman. The company previously had raised $6 million. www.rypple.com
Horizon Discovery, a UK-based translational genomics and personalized medicine company, has raised 6.25 million in Series C funding
led by DFJ Esprit. www.horizondiscovery.com
Phreesia Inc., a New York-based provider of a free patient-intake solution for the physician waiting room, has closed its Series D round
with a total of $20 million. It had announced a $16 million first close earlier this year. VantagePoint Venture Partners provided the new
tranche. Earlier backers included Ascension Health Ventures, BlueCross BlueShield Venture Partners, Sandbox Industries, Polaris
Venture Partners, HLM Venture Partners and Long River Ventures. The company previously raised around $25 million.
www.phreesia.com
Koofers Inc., a Reston, Va.-based social learning company for college students,, has raised $5 million in Series A funding. Revolution
LLC and QED Investors were joined by seed backers Altos Ventures and New Atlantic Ventures. www.koofers.com
SenSage, a San Francisco-based provider of security information and event management systems, has raised $3.5 million in new VC
funding. Return backers include Sierra Ventures, Canaan Partners, FTV Capital and Mitsui Ventures. The company also secured $2.75
million in venture debt from MMV Financial. www.sensage.com
GEO Semiconductor Inc., a Santa Clara, Calif.-based developer of programmable video and geometry pixel processor IC solutions, has
raised $2 million in venture equity and debt funding. Montage Capital and Harris & Harris Group led the debt tranche. www.geosemi.com
Correction: Harvest Automation has raised $5.3 million in total VC funding. Yesterday's issue incorrectly put the figure at $45.3 million.

Private Equity Deals

BV Investment Partners has sponsored a recapitalization of PetroSkills, a Tulsa, Okla.-based provider of competency-based training
and information solutions for energy companies. No financial terms were disclosed. BV Investment Partners (f.k.a. Boston Ventures) will
have a controlling interest. www.bvip.com
The Carlyle Group has acquired French budget hotel chain B&B Hotels from Eurazeo, for 480 million. Eurazeo had announced over
the summer that it was in exclusive talks with Carlyle. www.carlyle.com
The Carlyle Group next week is expected to receive regulatory approval for the $1.14 billion sale of its Taiwan cable TV unit to the Tsai
family (controlling shareholder of Taiwan Mobile), according to Reuters. www.carlyle.com
Nordic Capital has bid $787 million to acquire Swedish engineering firm Munters (ST: MTRS), and received an endorsement from the
Munters board. The offer represents a 7% premium to an existing bid from Alfa Laval (ST: ALFA). www.nordiccapital.com
Prospect Medical Holdings (Nasdaq: PZZ) said that its 40-day "go-shop" period has ended, without an alternate takeover proposal to a
$205 million bid from Leonard Green & Partners. www.prospectmedicalholdings.com
Sparkle Roll, a Chinese retailer and distributor of luxury goods, has raised around $42 million from Morgan Stanley Private Equity Asia.
The deal gives Morgan Stanley a 10.6% stake in Sparkle Roll.

PE-backed IPOs
Cornerstone OnDemand Inc., a Santa Monica, Calif.-based provider of talent management software and services, has filed for a $115
million IPO. Goldman Sachs and Barclays Capital are serving as co-lead underwriters. The company reports just over $20 million in
revenue for the first six months of 2010 ($9.2m net loss), compared to nearly $14 million in revenue for the same period in 2009 ($3.1m
net loss). The company has raised around $45 million in VC funding, from Bessemer Venture Partners (21.7% pre-IPO stake), Meritech
Capital Partners (15%) and Bay Partners (14.3%). www.cornerstoneondemand.com

Exits

CA Technologies (Nasdaq: CA) has agreed to buy Hyperformix, an Austin, Texas-based provider of capacity management software. No
financial terms were disclosed. Hyperformix has raised nearly $30 million in private funding from firms like M/C Venture Partners and

file:///C:/Users/srinivas/AppData/Local/Temp/tmp.tmp

16-12-2015

Page 4 of 5

Morgan Stanley Venture Partners. www.ca.com

Conduit Capital Partners has sold its 7% indirect interest in Edegel, Peru's largest electric power company, to existing Edegel
shareholder Inkia Energy. The deal was valued at $50 million. www.conduitcap.com

Other Deals
Sanofi-Aventis reportedly is considering an increase to its $18.5 billion bid for Genzyme. A Bloomberg report says that the rise could be
around $1 or $2 per share to the existing $69 per share offer. www.genzyme.com

Firms & Funds

Aetos Capital is planning to raise $1 billion for its fourth real estate fund, according to Reuters. The vehicle would focus on acquiring
office buildings and condominiums in China and Japan. It already has secured around $250 million. www.aetoscapital.com
Crosslink Capital has closed its sixth fund with $200 million in capital commitments. The San Francisco-based firm focuses on venture
capital and growth equity investments in the IT and energy technology sectors. www.crosslinkcapital.com
GreenOak Real Estate is planning to raise $500 million for its debut fund, according to Reuters. The Japan-focused firm was recently
launched by three former Morgan Stanley bankers: John Carrafiell, Sonny Kalsi and Fred Schmidt.

Moving In, Up and On

Erik Sebusch has joined venture firm CMEA Capital as a partner. He previously was with UPS Investments, where he managed
alternative investment funds. www.cmeacapital.com
John Brunjes and Genna Garver have joined law firm Greenberg Traurig LLP as a shareholder and of counsel, respectively. Both
previously were with Bracewell & Giuliani, and focus on private investment funds. www.gtlaw.com
Tom Greco has been named CEO of Hilco Appraisal Services, a unit of Hilco Trading LLC. He previously was president and CEO of
GE Corporate Finance Bank in London. www.hilcoappraisal.com
Hakan Goker has joined Aescap Venture, a Dutch venture firm focused on European medical companies, as a principal. He previously
was with Atlas Venture. www.aescap.com

Subscribe to Fortune Magazine | Advertising Info

Fortune is on Facebook. Sign up to connect.

For real-time analysis from the best in business, follow @fortunemagazine

Email Administrator
One CNN Center
Atlanta, Georgia 30303

This message has been sent to you because you are currently subscribed to The Term Sheet.
To unsubscribe, click here

file:///C:/Users/srinivas/AppData/Local/Temp/tmp.tmp

16-12-2015

Page 5 of 5

PRIVACY POLICY
Please read our Privacy Policy, or copy and paste this link into your browser:
http://money.cnn.com/services/privacy/

file:///C:/Users/srinivas/AppData/Local/Temp/tmp.tmp

16-12-2015