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From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.com

Subject:

Term Sheet -- Tuesday, November 16

Date:

16-11-2010 15:00:57
Message

Fortune Finance Street Sweep Term Sheet Economics Tech Wall Street Washington

The Term Sheet by Dan Primack

Tuesday -- November 16, 2010
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Random Ramblings
A couple of notes to kick off your Tuesday:
*** EMC yesterday agreed to acquire Isilon Systems (Nasdaq: ISLN), a Seattle-based attached network
storage company, for approximately $2.25 billion in cash. Not too shabby for a company whose stock price
sunk to just $2 per share in May 2009.
The biggest winner here is Atlas Venture, which first invested in Isilon back in 2001 (at a pre-money
valuation of just $7m). The firm didnt sell shares in the companys December 2006 IPO ($13 per share),
which looked like a good decision when the stock experienced a 77% first-day pop. Then it looked like
hubris, when the shares began to tank.
If you include a pair of small share sales in Q2 and Q3 of this year, Atlas will return a total of $473 million
on Isilon. Its the largest cash return in firm history the 20x multiple was topped by some dotcom-era exits
-- and is a vital boost for a firm that many wrote off after fundraising troubles and personnel bloodletting.
Actually, speaking of that latter point: The Atlas partner on the deal was Barry Fidelman, who transitioned
into a venture partner role when the firm restructured in early 2009.
My initial thought was that this looked similar to what happened at Charles River Ventures, which sidelined

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the partner responsible for EqualLogic (before that company was bought by Dell for $1.4 billion). But
Fidelman went part-time of his own accord, largely due to his advanced age (hes 70, despite some recent
forays into ski-jumping and snow-boarding), and desire to be more of a coach than fulltime due diligencer.
So mark this down as a feather in the cap for Atlas old guard.
*** Connie Loizos reports over at peHUB that Union Square Ventures is about to begin raising its third
fund. No target details were disclosed, although Fred Wilson would have some splainin to do if it was much
bigger than the $156 million vehicle that closed in 2008 (USV really walks the stick to your knitting talk).
While we search for definitive details, this much is clear: USV will have absolutely no troubles raising the
fund. UTIMCO, a limited partner in each of the firms first two funds, recently sent over performance data
through the end of August. It shows that USV I has an IRR of 55.87%, which is even higher than the
48.37% IRR reported through the end of May.
UTIMCOs data implies that USV hasnt yet returned initial Fund I cash (despite some rumors to the
contrary), but is well on its way. The endowments $22.25 million cash-in has been met with $14.29 million
cash-out, plus a remaining portfolio value of nearly $55 million.
The only UTIMCO fund with a better IRR is The Foundry Group, whose 2007 debut comes in above 77
percent. USVs second fund (vintage 2008) features a -8.99% IRR, but can write that off to J-curve
considerations (at least for now).
I'll post the entire UTIMCO report to The Term Sheet blog in a few minutes...

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The Big Deal

Lone Star Funds reportedly has agreed to sell its 51% stake in Korea Exchange Bank to Hana Financial
Group. No financial terms were disclosed, although the Wall Street Journal suggests at least a 10%
premium to the stakes current market value of $3.8 billion.
This is the big deal because we've been talking about a Lone Star/KEB sale for more than four years. Not
only have prior agreements collapsed, but there have been government investigations and all sorts of other
corporate intrigue. If this actually represents the beginning of this story's end, it will be long overdue.

VC Deals

Cerulean Pharma Inc., a Cambridge, Mass.-based developer of nanoparticle-based drugs, has raised $24
million in Series C funding. Lilly Ventures led the round, and was joined by return backers Polaris Venture
Partners, Venrock, Lux Capital, and Bessemer Venture Partners. The company previously raised around
$30 million. www.ceruleanrx.com

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PayNearMe, a Mountain View, Calif.-based real-time cash payment startup, has raised $16 million. Khosla
Ventures led the round, and was joined by August Capital and return backers True Ventures and Maveron.
www.paynearme.com
Celeno Communications, an Israel-based provider of chips for multimedia WiFi home networking
applications, has raised $12 million. Liberty Global was joined by return backers Cisco, Greylock Partners,
Miven Venture Partners and Pitango Venture Capital. www.celeno.com
ConnectEDU Inc., a Boston-based provider of online college and career planning tools, has raised $7
million in fourth-round funding led by return backer Allen & Company. www.connectedu.com
Houzz, a Palo Alto, Calif.-based photo database for the home design market, has raised $2 million in seed
funding. Backers include Oren Zeev, Donald Katz, Gary Ginsberg, Jeff Fluhr and Amos Wilnai.
www.houzz.com
Virident Systems Inc., a Milpitas, Calif.-based solid-state storage startup, has raised an undisclosed
amount of Series B funding. Sequoia Capital led the round, and was joined by Globespan Capital Partners
and return backer Artiman Ventures. www.virident.com

Private Equity Deals

Centerbridge Capital Partners has completed its acquisition of Gordon Biersch Restaurant Group from
Hancock Park Associates. No financial terms were disclosed. www.gordonbiersch.com
Greenleaf Power, an owner and operator of biomass power plants, has acquired a 28-megawatt biomass
power plant from the town of Scotia, California. No financial terms were disclosed. Greenleaf is backed by
Denham Capital Management. www.greenleaf-power.com
Gryphon Investors has completed its acquisition of American Importing Company Inc. (Amport), a
Minneapolis-based private-label manufacturer and marketer of dried fruits. No financial terms were
disclosed. www.gryphoninvestors.com
Interactive Technology Solutions, a Silver Spring, Md.-based provider of IT services to the health and
government markets, has acquired Peace Technology Inc., a Laurel, Md.-based provider of professional
tech services for the design, development, deployment, management and support of complex applications.
No financial terms were disclosed. ITS is a portfolio company of Snow Phipps Group. www.itsolutionsllc.com
Permira reportedly is in talks with French furniture retailer BUT about a joint bid for Conforama, which
owner PPR is looking to sell for around 1.5 billion. www.permira.com
SavATree, a provider of tree, shrub and lawncare services, has acquired DeerTech, a maker of ultrasonic
deer control products. No financial terms were disclosed. DeerTech was backed by BEV Capital and
Ropart Asset Management. www.savatree.com
Vogo Fund has agreed to acquire a 46.5% stake in South Koreas Tong Yang Life Insurance Co. for
approximately $800 million. The seller is South Korean conglomerate Tong Yang Group.

PE-backed IPOs

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YouKu, a Chinese video sharing site, has filed for a $150 million IPO. It plans to trade on the NYSE under
ticker symbol YOKU, with Goldman Sachs (Asia) serving as lead underwriter. The company has raised
$110 million in venture capital funding, from firms like Brookside Capital, Chengwei Ventures, Maverick
Capital and Sutter Hill Ventures. www.youku.com

Exits
Noranda Aluminum (NYSE: NOR), a Franklin, Tenn.-based portfolio company of Apollo Management, has
filed for a secondary public offering of common stock. The company did not disclose any offering details,
including share amount or whether or not Apollo would be a seller. www.norandaaluminum.com
Qlik Technologies Inc. (Nasdaq: QLIK), a Radnor, Penn.-based provider of business analytics software,
has filed to sell 10 million shares via a secondary public offering. The companys shares closed trading
yesterday at $22.66. Selling shareholders will include Accel Partners (3.46m shares), Jerusalem Venture
Partners (3.3m) and Stiftelsen Industrifonden (960k). Qlik raised $112 million via an IPO earlier this year.
www.qlikview.com

Other Deals
AstraZeneca (LSE: AZN) has hired JPMorgan to help sell its Astra Tech unit for up to $2 billion.
Astra Tech is a maker of medical devices and dental implants, and reported 2009 sales of nearly
$600 million.
Paulson & Co. reported yesterday that it has significantly cut its positions in Bank of America
and Citigroup.

Firms & Funds

Atlantic Bridge, a European private equity firm focused on the tech sector, has held an 85 million first
close on its second fund. No final target was disclosed. Limited partners include European Investment
Fund (EIF), the National Pensions Reserve Fund and Enterprise Ireland. www.abven.com
Sciens Aviation Special Opportunities Fund has closed with $213 million in capital commitments. The
fund is designed to acquire commercial aircraft for short-term lease and/or immediate disassembly and
resale. It is a joint venture of Apollo Aviation Group and Sciens Capital Management.

Moving In, Up and On

Christian Lucas has joined Silver Lake as co-head of the firms business in the Europe, Middle East and
Africa (EMEA) region. He previously was with Morgan Stanley as a managing director and head of tech
investment banking in Europe. His fellow EMEA co-head will be Joe Osnoss, an existing Silver Lake
managing director who will relocate to London from the firms New York office. www.silverlake.com
Mike Perlis has been named president and CEO of Forbes Media. He previously was a general partner
with Softbank Capital. www.forbes.com
Salil Munjal has joined Yaletown Venture Partners as a partner. He is a former partner with merchant
bank Penfold Capital, and before that was COO of Leitch Technology (acquired by Harris Corp.).
www.yaletown.com

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Arthur Zuckerman has joined Avista Capital Partners as a partner and chief operating officer. He
previously was CEO of The TriCycle Group, a consultancy focused on administrative and operational
issues at private equity firms. www.avistacap.com
Alvarez & Marsal has named Thomas Jones and Oliver Stratton as co-heads of the firms Asia
business. Jones has been a managing director with A&M for the past two years, helping to manage the
Asian piece of Lehman Brothers bankruptcy case. Stratton previously was head of Bain & Co.s Hong
Kong office. www.alvarezandmarsal.com

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