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From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.net

Subject:

Term Sheet -- Friday, January 4

Date:

04-01-2013 15:11:17
Message

Term Sheet Private Equity Venture Capital Banking Tech Hedge

Term Sheet by Dan Primack


Friday -- January 4, 2013
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Friday Feedback
The sun is shining, the jobs report was middling and Im getting very close to announcing our next Liquidity
Event. In other words, its time for some Friday Feedback. A potpourri this week, with emails from both
before and after my vacation.
First up are a couple emails related to Cerberus decision to sell Freedom Group:
Richard: I'm interested in how the media and investors (such as CalSTRS) see Cerberus as doing the
right thing by saying they're selling Freedom Group, when doing so doesn't change anything. Presumably,
they'll sell FG to the highest bidder, who will continue to make Bushmaster semi-automatic weapons, highcapacity magazines, etc An alternate approach would be for CalSTRS and other public funds to pressure
Cerberus to NOT sell FG to the highest bidder, but rather to require that any new owner change internal
policy by only selling semi-automatic weapons to law enforcement and the military. As you wrote, profit
should be the primary goal of their investment offices, but not at the expense of their broader purposes.
On the other hand, Michael: I suppose you're declaring victory? People like CalSTRS are fiduciaries by
the way - Cerberus too. Wonder if anyone remembers what that means anymore. Cerberus should stop
selling a legal product and voluntarily cost their investors' money for something that likely will have no
benefit? Why doesn't Altria voluntarily stop selling cigarettes today? Better yet, why dont Molson Coors
and Constellation Brands and the rest stop selling alcohol voluntarily since 30 people die from drunk driving
accidents every day?
*** Stewart on yesterdays issue: If you believe that its the outliers that matter most in venture capital,
why characterize Zipcar as a "huge return? On the gross numbers, it's a 2x, hardly the outlier VCs are

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paid for. Struck me that you had both POVs in the same newsletter.
*** Len on my mag column about a possible future in which private equity taps retail investors: As a long
time investor, and former broker (I make my living more honestly these days) I believe that selling private
equity to retail investors is same as selling them derivatives, limited partnerships on movies and tulips
(think bubble). All of those, along with many other examples, are seller/sales/marketing driven, rather than
buyer driven. So, buyer is only one at risk, while the brokers, packagers, managers and everyone else is
pretty much guaranteed to make money. If the problem is that there is not enough capital available for long
term investment, then let the markets find new pathways to large investors. What did the markets do before
pension plans? VCs and private equity folks should not be marketing to retail investors without huge
government supervision or not at all.
*** DCF on the Elon Musk/Reed Hastings social media disclosure kerfuffle: This situation seems ripe for a
simple plugin product/feature for execs & IR professionals social media accounts and their corporate
websites. Automatically post any company-related CEO tweets/posts/pics to the social media section of the
company's IR page and automatically do what is required for disclosures of this sort. This shouldn't even be
a question.
*** Virat: Does the Term Sheet come in audio format by any chance? Would love to be able to get my
morning TS scoop while driving to work. Ive actually gotten a couple of these podcast requests recently,
and would consider it if there were enough demand. So if this is something youd listen to regularly, please
let me know.
*** Have a great weekend

Stuff to read @Fortune.com


Pre-Marketing: Pete Peterson's failure, the platinum coin meme, what won't work for cleantech in
2013 and oldest Swiss private bank guilty of enabling U.S. tax fraud.
Doron Levin: Zipcar buy is no surefire win
Miguel Helft: What Google's win means
VC Q&A: Why BuzzFeed raised new financing
Geoff Colvin: 2013 is when we become a healthcare nation
Byron Wein: 10 surprises for 2013
Stephen Gandel: Mortgage rates won't get much lower

The Big Deal


The Blackstone Group is running a parallel sale process for portfolio company SeaWorld Parks and
Entertainment, according to Reuters.
SeaWorld filed for an IPO last month, but reportedly has held early talks with interested parties to explore
whether a private sale could fetch more. www.seaworld.com

VC Deals
Room 77, a San Francisco-based meta search and booking engine for hotel rooms, has raised $30.3
million in Series C funding. Expedia was joined by return backers Sutter Hill Ventures, General Catalyst
Partners, Concur Technologies, Felicis Ventures, Rich Barton, Erik Blachford and Spencer Rascoff. The
company previously raised $13.5 million. Read more.

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Gradalis Inc., a Dallasbased developer of an autologous vaccine platform, has raised $24 million in
Series B funding. No investor information was disclosed. www.gradalisinc.com
StudyBlue, a Madison, Wis.-based provider of online class prep for college and high school students, has
raised $9 million in Series A-1 funding. Great Oaks Venture Capital led the round, and was joined by the
Wisconsin Alumni Research Foundation. www.studyblue.com

Private Equity Deals


Blue Equity has acquired a controlling stake in The Antilles Group Ltd., the licensed user of Shell brands
in the country of Jamaica, from the Rubis Group (Paris: RUI). No financial terms were disclosed.
www.blueequity.com
Corridor Capital has acquired three California-based specialty manufacturing companies from Churchill
ESOP Capital Partners: Wetmore Tool & Engineering Inc. (China), US Industrial Tool & Supply
(Gardena) and Arvan Inc. (Gardena). No financial terms were disclosed. www.corridorcapital.com
Dyal Capital Partners, a private equity fund managed by Neuberger Berman Group, has acquired a
minority stake in Scopia Fund Management, a hedge fund manager with approximately $3.4 billion of
assets in long/short equity strategies. No financial terms were disclosed. www.nb.com
H.I.G. Capital has completed a recapitalization of Big Tex Trailer Manufacturing, a Mt. Pleasant, Texas
based maker of open utility, equipment, horse, livestock and cargo trailers and truck beds. No financial
terms were disclosed. www.bigtextrailers.com
Irving Place Capital has acquired a minority equity stake in Rag & Bone, a New York-based maker of
high-end mens and womens apparel. No financial terms were disclosed. Peter J. Solomon & Co. served
as placement agent. www.rag-bone.com
Koch Eye Associates, a portfolio company of Candescent Partners, has acquired Eye Health Vision
Centers, a provider of vision health services in Southeastern Massachusetts. No financial terms were
disclosed. Candescent led the round, and was joined by co-investors Eagle Private Capital, First New
England Capital, Bay Capital, Pine Street Capital Partners and Plexus Capital. www.kocheye.com
NEX Performance Films, a portfolio company of Mason Wells, has acquired Charter Films Inc., a
manufacturer of plastic films. No pricing terms were disclosed. US Bank led senior debt financing and
Northwestern Mutual Life Insurance Co. provided mezzanine financing. www.nex-films.com
Potpourri Group Inc., a portfolio company of American Capital, has acquired Cuddletown Inc., a
Portland, Maine-based multi-channel retailer of high-end bedding products. No financial terms were
disclosed. www.cuddledown.com
PRV Aerospace, an Everett, Wash.-based portfolio company of Court Square Capital Partners, has
acquired Astro Star Inc., a City of Industry, Calif.-based maker of components and assemblies for the
commercial and military aerospace industries. No financial terms were disclosed, except that debt financing
was provided by GE Antares Capital and Ares Capital. www.prvaerospace.com
RLJ Equity Partners has acquired R. Thompson Trucking Inc., a provider of trucking and other
transportation services in Virginia and North Carolina, from Linx Capital Partners. No financial terms were

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disclosed. www.thompsontruckinginc.com
Rock Hill Capital Group has acquired Core International LLC, a Houston, Texas-based maker of rubber
components like oilfield elastomer products. No financial terms were disclosed. www.oilpp.com
Segulah has agreed to acquire Beerenberg Holding AS, a provider of maintenance services for the
onshore and offshore oil and gas industries with a focus on the Norwegian Continental Shelf, from Herkules
Capital. No financial terms were disclosed, except that Beerenbergs 2012 revenue was approximately
$267 million. www.segulah.se
Welsh, Carson, Anderson & Stowe has acquired GetWellNetwork, a Bethesda, Md.-based provider of
interactive patient care solutions. No financial terms were disclosed. GetWellNetwork had raised over $17
million in VC funding from firms like Valhalla Partners, GrosvenorFunds, Johnson & Johnson Development
Corp., Point Judith Capital and Village Ventures. www.getwellnetwork.com

PE-backed IPOs
No IPO news this morning.

Exits
Abbott Labs, Johnson & Johnson and Sanofi have shown interest acquiring in eye-care company
Bausch & Lomb Inc., according to Bloomberg. Warburg Pincus bought B&L in late 2007 for $4.5 billion
(including debt), and is seeking more than $10 billion in a sale. www.warburgpincus.com
Shutterfly (Nasdaq: SFLY) is in talks to acquire ThisLife, a Palo Alto, Calif.-based photo and personal
publishing company, according to TechCrunch. The deal reportedly would be valued at around $25 million.
ThisLife investors include Madrona Venture Group, Rogers Ventures and Morado Venture Partners.
www.shutterfly.com

Other Deals
CMC Consulting Group, a Germanybased healthcare strategy and M&A advisory firm, has acquired
Johnston Blakely & Co., a Boston-based provider of private equity placement and M&A advisory services
to the life sciences sector. No financial terms were disclosed. www.cmc-co.net
Esco Technologies (NYSE: ESE) has acquired the assets of Metrum Technologies LLC, a Waco,
Texas-based provider of wireless communications technology for meter reading and smart grid products.
No financial terms were disclosed. www.metrum.us
Metrolube Enterprises Inc., a Marlborough, Mass.-based Valvoline Instant Oil Change franchisee, has
acquired Southern Express Lubes Inc., a chain of 40 quick lube stores in Florida. No financial terms were
disclosed. Cross Keys Capital managed the process.
WPP (LSE: WPP) has invested $70 million for a 20% stake in Argentina-based IT services company
Globant. Existing Globant shareholders include Riverwood Capital, FTV Capital and Endeavor Capital.
www.wpp.com

Firms & Funds


Sanderling Ventures is raising upwards of $250 million for its seventh biomedical-focused VC fund,

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according to a regulatory filing. www.sanderling.com

Moving In, Up and On


Richard Chow has left Paul Capital Partners, where he was a principal focused on secondary
investments. Prior to joining Paul in 2007, he had spent five years with Millennium Technology Ventures.
No word yet on his future plans. www.paulcap.com

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