Page 1 of 5

From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.com

Subject:

Term Sheet -- Friday, December 17

Date:

17-12-2010 15:04:28
Message

Fortune Finance Street Sweep Term Sheet Economics Tech Wall Street Washington

The Term Sheet by Dan Primack

Friday -- December 17, 2010
Email Dan | Follow Dan on Twitter | Subscribe | Send an anonymous tip

Random Ramblings
I headed out early this morning to chat 2011 M&A with the CNBC Squawk Box crew, on the heels of a
Reuters report about how this years deal activity returned to 2007 levels.
Specifically, there has been around $2.25 billion of global M&A so far this year (nearly a 20% increase),
with 17% of that coming from emerging markets. Private equity-backed deals also are on the rise, with
$211 billion compared to last years $121 billion.
You can watch video of my appearance here. Or, for the click-phobic, some quick thoughts:

I expect deal activity to rise moderately next year. Both corporations and private equity firms have
lots of cash in the bank, and at some point they must put it to work.

On the corporate side, I see more consolidation plays than growth plays. Particularly in sectors like
telecom and healthcare. For private equity, hot sectors are likely to include energy (this past years
big winner), tech and retail.

One interesting M&A story to watch will be Googles FTC troubles, and how that impacts its ability
to make large purchases (i.e., Groupon). Im not so much interested in Googles well-being here as
I am in that of VC firms looking to make big trade sales for its best Web 2.0 portfolio companies. If
Google cant buy, and Facebook doesnt yet have public currency, then IPOs may be all thats left
(and that will remain a daunting prospect).

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

16-12-2015

Page 2 of 5

PE fund lifecycles will be a huge story, and could play out two different ways. First, some firms
might feel pressure to put existing capital to work, which may lead to serious overpayment. Second,
firms will be looking for new liquidity events that could help convince LPs to re-up. Lots of firms
would like to find that liquidity via dividend recaps, but it looks like that mini-boom (bubble?) is
beginning to slow down. Not saying that lenders wont lend, but rather that theyd prefer to do new
buyouts than refinance existing buyouts.

*** If this venture capital thing doesn't work out for the folks at First Round Capital, they might have a
future in viral marketing.
The firm's video holiday cards are classic, from portfolio company dancers in 2008 to last year's Susan
Boyle parody. This time they go the Old Spice route, again featuring its investees (plus partner Josh
Kopelman). Take a look.
**** Just a few short months ago, Stephen Schwarzman compared some of President Obama's tax plans
to Hitler's invasion of Poland.
Then came reports that the Blackstone (BX) boss was pulling an Alex Baldwin, fleeing Obamaland for
friendlier European environs. Such reports were specious -- his European sojourn is all about helping
Blackstone globalize, and its not like taxes are lower at his Saint-Tropez vacation home -- but it still fed into
a narrative about how the onetime McCain supporter was... well, was still supporting McCain.
Now it looks like Schwarzman is softening a bit, at least when it comes to Obama's tax compromise with
Republicans.
Yesterday on CNBC, he said that the package could add between .05% and 1% to GDP. "You will have
more people with more money. Without taxes going up, you are going to have a variety of different
incentives," Schwarzman added. "I think the economy will respond positively to that."
Sure it's classic supply-siderism, but it also sounds a bit like a truce.
*** Have a great weekend. Go Pats!

6 things to read @Fortune.com

Pre-Marketing, including seed-stage bubble dissents, global M&A returns to 2007 levels, HFM

returns to chat with n+1 and what to do when you're drunk at your partner's holiday party.
Bryce Roberts: What we learned from raising our first VC fund

Dan Mitchell: Food manufacturing M&A is gaining steam, but there is one big problem
Cyrus Sanati: Icahn's no-good, very bad Dynegy deal

Dan Primack: Twitter is beginning to lose its snark

Michal Lev-Ram: Why social sharing of medical data is a good idea

The Big Deal

BMO Financial (TSX: BMO), parent of Bank of Montreal and Harris Bank, has agreed to acquire
Wisconsin-based Marshall & Ilsley Corp. (NYSE: MI) for $4.1 billion in stock. It's just one deal, but it did
help other regional bank shares rise in pre-market trading. Maybe the beginning of a rebound for one of the
financial market's more distressed sectors...

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

16-12-2015

Page 3 of 5

VC Deals
Xiaomi, a Beijing-based developer of mobile apps for the Android and iPhone platforms, has raised $35
million in VC funding at a $200 million post-money valuation, according to TechWeb. Backers include
Morningside Ventures and Qiming Venture Partners. www.xiaomi.com
NovImmune SA, a Geneva, Switzerland-based drug company focused on immune-related diseases,
inflammation and organ transplantation, has raised CHF 20 million ($20.8m) in new VC funding led by
existing backer BZ Bank. www.novimmune.com
Bonobos Inc., a New York-based online mens clothing retailer, has raised $18.5 million in Series C
funding. Accel Partners and Lightspeed Venture Partners co-led the round, and were joined by returning
angel investors. www.bonobos.com
Small Bone Innovations Inc., a New York-based orthopedics company, has raised $15 million in Series F
funding. Return backers include Viscogliosi Brothers, Khazanah Nasional Berhad and NGN Capital.
www.totalsmallbone.com
eXelate, a New York-based open marketplace for audience targeting data, has raised $1 million in new
Series B funding from Trident Capital. The company previously held a $15 million first close on the round,
from Menlo Ventures and Carmel Ventures. www.exelate.com

Private Equity Deals

BluEarth Renewables Inc., a Calgary-based developer of alternative energy projects in North America,
has secured a C$75 million private equity commitment from the Ontario Teachers' Pension Plan.
www.blueearthrenewables.com
GVK Energy, an Indian power developer, has raised $154 million in private equity funding from Actis and
the Government of Singapore Investment Corporation (GIC). www.gvk.com
Kapitall, a New York-based developer of an online investing platform, has raised an undisclosed amount of
private equity funding from Bendigo Partners. www.bendigopartners.com
Montagu Private Equity has agreed to acquire Helly Hansen Pro, a Norwegian provider of survival and
personal protection suits to the offshore and shipping markets. No financial terms were disclosed.
Onex Corp. is in talks to sell Bolton, Ontario-based Husky Injection Molding Systems for upwards of $2
billion, according to Bloomberg. Goldman Sachs is managing the process, with suitors said to include
Apollo Management and The Carlyle Group. www.onex.com
Silverfleet Capital has acquired UK footwear retailer Office from West Coast Capital. No financial terms
were disclosed. www.silverfleetcapital.com
Water Street Healthcare Partners has acquired a majority stake in New Century Health, a Brea, Calif.
based benefit management company focused primarily on oncology and cardiology. No financial terms
were disclosed. www.wshp.com

PE-backed IPOs

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

16-12-2015

Page 4 of 5

Fortegra Financial Corp., a Jacksonville, Fla.-based insurance services company, raised around $66
million in its IPO. The company priced six million common shares at $11 per share, compared to plans to
sell 7.7 million shares at between $14 and $16 per share. The company will trade on the NYSE under ticker
symbol FRF, while Piper Jaffray and SunTrust Robinson Humphrey serving as co-lead underwriters.
Summit Partners held an 87.3% pre-IPO stake, and had planned to sell just over 3 million shares in the
IPO. www.fortegra.com

Exits
American Express Co. has agreed to acquire German marketing company Loyalty Partners. The deal is
valued at upwards of $600 million, including a $566 million up-front cash payment and a five-year option to
buy the remaining equity interest from company management. Sellers include Palamon Capital Partners,
which currently holds a 54% stake. www.amex.com
Centre Partners has completed its sale of Gray Wireline, a Ft. Worth, Texas.-based provider of casedhole wireline solutions, to Seawell Ltd. (OSE: SEAW). The deal was valued at $157.5 million.
www.centrepartners.com
Citrix Online, a unit of Citrix Systems (Nasdaq: CTCX), has agreed to acquire NetViewer, a Londonbased SaaS vendor in collaboration and IT services. No financial terms were disclosed. NetViewer had
raised VC funding from firms like T-Online Venture Fund and European Founders Fund.
www.netviewer.com
IK Investment Partners and Ratos AB have agreed to sell Superfos Industries, a Danish maker of
injection-molded plastic-packaging product, to British rival RPC Group. The deal is valued at around 205
million.
Levine Leichtman Capital Partners has completed its sale of Harlows Casino Resort & Hotel to
Churchill Downs Inc. (Nasdaq: CHDN), for approximately $138 million. www.llcp.com

Other Deals
Rockwood Holdings Inc. (NYSE: ROC), a Princeton, N.J.-based specialty chemicals company, has
agreed to sell its AlphaGary plastic compounding unit to Mexichem (MX: MEXCHEM). The deal is valued
at $300 million in cash.

Firms & Funds

Keith Meister, Carl Icahns top lieutenant, is planning to launch an event-driven hedge fund, according to
the NY Times. It is being seeded with a $250 million commitment from Soros Fund Management.

Moving In, Up and On

Gilbert Saada has stepped down as director of investments at French firm Eurazeo. No word yet on his
future plans.
Cross Keys Capital has promoted Jason Porter from associate to vice president. He originally joined the
Ft. Lauderdale, Fla.-based private equity firm in 2008. www.ckcap.com

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

16-12-2015

Page 5 of 5

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
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