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From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.com

Subject:

Term Sheet - - Monday, October 4

Date:

04-10-2010 13:42:42
Message

Fortune Finance

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The Term Sheet by Dan Primack

Monday -- October 4, 2010

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Monday Mouth-Off
The sky is gray, the beloved BoSox are buried and Sanofi has gotten all hostile with Genzyme. In other words, it's time for some Monday
Mouth-Off.
This is the first feedback column since we launched The Term Sheet last month, so a quick primer for the uninitiated: What follows is a
sampling of reader emails - not always in their entirety - sent in response to past missives. Commenters are identified only by first names.
You can always join in by hitting reply (yes, I get those), or by pinging dan_primack@fortune.com. Ok, let's get on with it...
Most of the mail concerned last Monday's column about a "geopolitical risk" fund that is (literally) banking on an Israeli military strike
against Iran.
Zach leads us off: "If Israel attacks Iran, it has nothing to do with military "aggression." Iran has publicly stated its intent to wipe Israel off
the map, not desire but intent. Israel will be acting in self-defense. If Europe had listened to Churchill in 1936 and done the same when
Hitler announced his intent to invade Poland, 30 million lives would have been saved. I don't mind you being a liberal politically, but don't
be oblivious of facts in favor or pacifism. If a person tells you he is going to kill you and you hit him first, is that aggression? The only thing
that has enabled Israel to survive as a country is the willingness to strike when an attack was coming versus waiting for it to arrive. The
people in those countries only respect strength and Israel has had to demonstrate it to stop them from constantly attacking."
Matt: "It's just two strokes shy of a spy novel plot (turned Movie script). More of a redux on the military-industrial complex 'benefitting' from
a war, and thus acting covertly to stimulate a provocative event that would ensure them high profits due to a war... all the while suggesting
to outsiders that they are merely 'bystanders' profiting from an open market I don't blame the guy putting together the hedge fund. He's
just working within the rules. I'm suggesting that the rule-makers are out of touch and sadly unable to understand what's going on."
Larry: "This may be just a trial balloon, but it got popped when you exposed it to the light of public scrutiny."

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Ronald: "You are a disgusting SOB! It's sad that you cannot contain your excitement and greed at the thought of making money at the
expense of death and destruction." Ummm Ronald: You do recognize the distinction between reporters and their subjects, right?
*** Eric: "Regarding Amyris and other IPOs, how about a revisit as the 6-month lockup period approaches." That's fair Eric. Will do. In fact,
I may begin building a regularly-posted spreadsheet of such things.
*** Robert: "While you congratulate Cuomo [for the pending Hevesi plea], give him equal time for why Rattner has not been indicted."
Don't worry Robert... you don't have to remind me about that one. Plus, we haven't even seen the details of the Hevesi deal yet (assuming
there actually is one).
*** Sarah: "I read that you're having a baby soon. What happens then?" I'll be out for a couple of weeks, but Fortune has already tapped a
very capable pinch-hitter. Won't miss a beat.
*** Pedro: "We miss the links to outside content you had in the First Read section at your former house." No need to miss them Pedro.
The morning links column has simply been renamed Pre-Marketing, and is up on Fortune.com each morning by 7:30am ET (and listed
right below).

6 things you should read @Fortune.com

Pre-Marketing, including why AOL and Yahoo should merge, Islamic PE firms face a reality check and a Citigroup conference call
gone wild.
Jessi Hempel: The rise of Yuri Milner and DST
Jessica Shamboa: The ad-man behind Old Spice's new life
Dan Primack: About that "record pace" of VC-backed M&A exits
Becky Quick: New boardroom rules may make everone unhappy
Dan Primack: A limited partner jumps on the "investor hours" wagon

The Big Deal

Sanofi-Aventis has launched a hostile bid for Genzyme, one month after Genzyme management rebuffed Sanofi's $69 per share offer.
This is the big deal for two reasons: (1) Sheer size. The $69 per share offer would value Genzyme at $18.5 billion, and expectations are
that Sanofi will be forced to sweeten the pot before this whole thing is over. There were only two larger M&A deals in the entire first half of
2010.
(2) Sanofi is following a playbook that has becoming increasingly familiar this year. Thomson Reuters reports that 8% of all global M&A
this year has been hostile, which is the highest percentage in more than a decade. Not only does that mean the Genzyme offer is
emblematic of a larger trend, but also could represent a buying opportunity for "white knight" private equity firms...

VC Deals
Privalia Venta Directa, a Spanish online private sales site reportedly has raised 70 million in new VC funding. General Atlantic and
Index Ventures co-led the round, and was joined by return backers Highland Capital Partners. http://es.privalia.com
GLO AB, a Swedish developer of nanowire semiconductor LEDs, has raised around $25 million in new VC funding. Wellington Partners
led the round, and was joined by Provider Venture Partners, Hafslund Venture, Agder Energi Venture, Teknoinvest, VantagePoint Venture
Partners and LU Innovation. www.glo.se
ClairMail, a San Rafael, Calif.-based provider of mobile banking and payment solutions, has raised $13.8 million in new VC funding.
Investor Growth Capital led the round, and was joined by return backers JAFCO Ventures, Northwest Venture Partners and Outlook
Ventures. www.clairmail.com
Orbotix, a Boulder, Colo.-based developer of game platform that "combines common physical objects, smart phones and a software
marketplace," has raised an undisclosed amount of VC funding led by Foundry Group. www.orbotix.com

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Private Equity Deals

American Securities has emerged as the lead bidder for Kool Smiles Dental Clinics, according to Bloomberg. The dental chain focuses
on kids and parents in underserved areas, and is being offered for approximately $700 million by owner Friedman Fleischer & Lowe.
www.mykoolsmiles.com
Bain Capital has acquired Asimco Technologies Ltd. from Key Principal Partners and its co-investors. No financial terms were
disclosed. Asimco is a Chinese producer of diesel engine components. www.baincapital.com
The Blackstone Group, Goldman Sachs and Lone Star each are considering bids for a 3 billion-plus portfolio of property loans that
may be sold by RBS, according to the Sunday Times. www.rbs.com
Clayton, Dubilier & Rice and GS Capital Partners have completed their previously-announced acquisition of HGI Holdings Inc., a
Cleveland-based medical supplies distributor. No financial terms were disclosed. www.cdr-inc.com
Greenbriar Equity Group has agreed to acquire Dynamex Inc. (Nasdaq: DDMX), a Dallas-based provider of same-day delivery and
logistics services in the United States and Canada. The deal is valued at approximately $210 million, or $21.25 per Dynamex share
(39.3% premium over last Thursday's closing price). www.dynamex.com
Littlejohn & Co. has sponsored a recapitalization of Cosmetic Essence Inc., a contract manufacturer for the cosmetics, fragrance, and
skin care industries. No financial terms were disclosed. Cosmetic Essence has annual revenue of around $300 million.
www.littlejohnllc.com
TPG Capital has agreed to acquire a 35% stake in sports and entertainment marketing firm Creative Artists Agency. The two groups
also have pledged to create a $500 million fund for future investments in the sector. www.caa.com

PE-backed IPOs
Logan's Roadhouse, a Nashville, Tenn.-based chain of casual restaurants, has withdrawn registration for a $200 million IPO. The move
follows Kelso & Co.'s previously-announced agreement to acquire Logan's from shareholders Bruckmann, Rosser, Sherrill & Co., Black
Canyon Capital and Performance Equity Management. No financial terms of the buyout have been disclosed.
NetSpend Corp., an Austin, Texas-based provider of prepaid reloadable debit cards in the U.S., has set its IPO terms to 18.53 million
common shares being offered at between $10 and $12 per share. It plans to trade on the Nasdaq under ticker symbol NTSP, with
Goldman Sachs and BoA Merrill Lynch serving as co-lead underwriters. NetSpend was acquired in 2004 by Oak Investment Partners
(46.5% pre-IPO stake). Other shareholders include JLL Partners (32.2%), based on NetSpend's 2008 acquisition of JLL portfolio company
Skylight Financial. www.netspend.com
RigNet Inc., a Houston-based provider of data network infrastructure for offshore oil and gas rigs, has filed for an $86.25 million IPO. It
plans to trade on the Nasdaq under ticker symbol RNET, with Deutsche Bank Securities and Jefferies & Co. serving as co-lead
underwriters. It reports a net loss of around $11 million for the first six months of 2010, on around $44 million of revenue. Shareholders
include Cubera Private Equity, Altira Group and Sanders Morris Harris Group. www.rig.net

Exits
Pipavav Shipyard Ltd., a listed Indian shipbuilder, said that some of its private equity owners plan to sell an undisclosed number of
shares, causing the company's shares to fall 11 percent. A post-IPO lockup period expired last Friday. Backers include Indus Capital,
Citadel Capital, Standard Chartered Private Equity, Trikona Capital and New York Life Insurance. www.pipavavshipyard.com
The Pritzker family reportedly has hired Bank of America to manage a $1 billion auction for Triton Container International Ltd., owner
and operator of a global marine intermodal cargo container fleet. www.tritoncontainer.com

Other Deals
Sally Beauty Holdings Inc. (NYSE: SBH) has agreed to acquire Midwestern rival Aerial Company Inc. for $70 million.
http://www.sallybeautyholdings.com/

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Firms & Funds

AllianceBernstein has acquired SunAmerica's alternative investment group, a team that manages a portfolio of hedge fund and private
equity fund investments. No financial terms were disclosed. www.alliancebernstein.com
Antin Infrastructure Partners, an independent infrastructure investment firm sponsored by BNP Paribas, has closed its debut fund with
1.1 billion in capital commitments. www.antin-ip.com
Brynwood Partners has closed its sixth fund with $305 million in capital commitments. The Greenwich, Conn.-based firm focuses on
lower middle-market private equity investments. www.brynwoodpartners.com
Caisse de depot et placement du Quebec is looking to sell an $800 million private equity fund portfolio on the secondary market,
according to VentureWire. www.lacaisse.com
Evercore Partners has completed its acquisition of a 50% stake in G5 Advisors, a Brazilian I-banking boutique. www.g5advisors.com
Menlo Ventures has cut the target capitalization for its eleventh fund to $400 million, according to VentureWire. The firm previously had
been seeking to raise between $600 million and $800 million, after having raised $1.2 billion for its tenth fund in 2005.
www.menloventures.com
Industry Ventures plans to raise $300 million for its sixth secondary fund, according to VentureWire. Capstone Group is serving as
placement agent. www.industryventures.com

Moving In, Up and On

Dominic Preuss has joined SecondMarket as head of product. He previously was senior vice president of FiLife, a joint venture between
Dow Jones and IAC. www.secondmarket.com

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