Term Sheet — Monday, February 1

• LB-Uh-Oh: Several months ago we began talking about how the leveraged financing markets were beginning to tighten, as evidenced by lenders postponing the syndication of $5 billion in notes related to The Carlyle Group's $8 billion purchase of Veritas Technologies from Symantec. That deal finally closed last week, but Bloomberg reports that it came only after Carlyle agreed to sweeten the financing terms.

One day later, Apollo Global Management's Josh Harris said the following at an industry conference (again, via Bloomberg): “The financing markets are shutting down... We had a huge pipeline going into the holiday period. We were on the verge of signing these deals. The market shut down. Our entire private equity pipeline dried up.”

Harris cited slowing economic growth in China as a major contributing factor, and added that Apollo planned to increase its distressed debt buying activity for the first time in a long time.

Still have to wonder how all of this will affect Dell-EMC...

• Mark it: Fidelity has released its valuation reports for the period ending Dec. 31, 2016. Nothing too significant in there, save perhaps that Blue Bottle shares got a 6% bump after being hammered in prior Fidelity reports. Dropbox and Snapchat each took a small valuation drop.

• Is honesty the best policy? Earlier this year I pointed you to a great NY Times read from Katie Benner about what happened to employees when Good Technology agreed to be acquired by Blackberry for less than half of its most recent private valuation. Of particular interest was how company CEO Christy Wyatt reportedly downplayed the company's financial struggles during all-hands meetings with employees, suggesting that cash-flow was fine and that Good had plenty of options.

Since Katie's story came out, I've spoken with several entrepreneurs and VCs about the transparency dance between startups and their employees.

Defenders of Good Technology argue that sharing too much negative information becomes a self-fulfilling prophesy ― causing employee morale to sink (or even look for other employment), thus hurting the company even more. Moreover, financial transparency can cause media leaks that, if the numbers are lousy, could cause both competitive and marketing damage.

But, more often, I've heard from entrepreneurs who favor internal transparency. Gusto (f.k.a. ZenPayroll), for example, regularly provides revenue, cash-flow and other data to its employees. Pinterest regularly provides certain financial and valuation information. And so did Hubspot before going public.

Both Gusto and Pinterest's CEOs have told me that the risk of leaks is easily overwhelmed by the risk of employees feeling bamboozled, and that poor performance needn't hurt morale too much so long as it is contextualized. In short, if you build a strong enough internal culture, you can weather storms.

Here's a quick related anecdote from Dharmesh Shah, founder and CTO of Hubspot: "When it was just my co-founder and I, clearly disclosure wasn't an issue. Then, when we hired our first employee, we had to make the decision: 'What do we share with this new person.' We decided 'everything' because couldn't come up with a good reason not to. Not having to decide what to share with people and what not to is a pretty efficient process. Fewer decisions to make, fewer politics, fewer complex systems, better decisions (everyone has the same data)."

• Skype redux retweet? Twitter shares are jumping this morning on a weekend report from The Information that Silver Lake and Andreessen Horowitz have discussed some sort of deal for the social media giant. Maybe a PIPE, maybe something bigger (remember that Silver Lake and Andreessen previously partnered on the Skype carve-out from eBay).

• Where in the world? I'll be in Los Angeles later this week to both work on a magazine story and to participate in the Upfront Summit, where I'll be interviewing Fred Wilson and moderating a panel of LPs in venture funds. Neither session is being live-streamed, but both are on-the-record and video will later be available via YouTube. So if you've got anything for me to ask the LPs or Fred, send it on over...

THE BIG DEAL

• Stryker Corp. (NYSE: SYK) has agreed to acquire Sage Products LLC, a Cary, Ill.-based developer of products used to prevent hospital-acquired conditions, from Madison Dearborn Partners for $2.775 billion. www.strykercorp.com

VENTURE CAPITAL DEALS

• KFit, a Malaysia-based provider of trial and class-based gym access (i.e., ClassPass for Asia), has raised $12 million in Series A funding. Venturra Capital led the round, and was joined by SIG, Axiata Digital Innovation Fund and return backers Sequoia Capital India and 500 Startups. Read more.

• Kaizen, a user interface marketplace and testing platform with offices in Tokyo and San Francisco, has raised $8 million in Series B funding. Yahoo Japan, NTT Docomo Ventures, Saison Ventures KK and COLOPL were joined by return backers GREE Ventures, GMO Venture Partners and Eight Roads Ventures Japan. Read more.

• Flyp, a Boston-based telecom app that lets consumers to use multiple, real U.S. numbers on a single phone, has raised $5.8 million in seed funding. Backers include Aspect Ventures, Acorn Ventures, Structure Capital, MAG Ventures, Morningside Technology Ventures, Russell Simmons and Jeffrey Parker. www.getflyp.com’

• PhotoSonix Medical Inc., an Ambler, Penn.-based maker of a light and ultrasound device for treating acne, has raised $1.4 million in VC funding. Princeton BioPharma Capital Partners led the round, and was joined by Ben Franklin Technology Partners and individual angels. www.photosonixmed.com

PRIVATE EQUITY DEALS

• EQT Partners has acquired a majority equity stake in Elevate, a Hong Kong-based provider of social compliance assessment and improvement solutions. No financial terms were disclosed. www.elevatelimited.com

• True Potential LLP, a UK-based investor and wealth management technology platform, has raised an undisclosed amount of equity funding from FTV Capital at a valuation in excess of $214 million. This represents the company’s first institutional investment. www.tpllp.com

• Pamplona Capital Management has acquired Veritext, a Livingston, N.J.-based provider of deposition and litigation support services, from Investcorp. No financial terms were disclosed. www.veritext.com

• Percussion Petroleum LLC, a Houston, Texas-based oil and gas company focused on North American basins, has secured an undisclosed amount of equity funding from Carnelian Energy Capital Management. www.percussionpetroleum.com

• Royal Adhesives & Sealants LLC, a South Bend, Ind.-based portfolio company of American Securities, has acquired the business assets of Durham, Conn.-based Weld Mount Systems. No financial terms were disclosed. www.royaladhesives.com

IPOs

• Two companies -- Editas Medicine and BeiGene -- are expected to price IPOs this week. So far, no company has gone public on a U.S. exchange in 2016. Read more.

EXITS

• Apple (Nasdaq: AAPL) has acquired Flyby Media, a New York-based augmented reality startup, according to the FT. No financial terms were disclosed. Flyby Media had raised over $20 million in VC funding from firms like CNF Ventures and Chart Venture Partners. Read more.

• The Blackstone Group has hired Morgan Stanley to find a buyer for Pactera Technology International Ltd., a Chinese IT outsourcing company, according to the WSJ. A sale could value Pactera at up to $1 billion. Read more.

• Charterhouse is seeking a buyer for Italian generic drugmaker Doc Generici, according to Reuters, with price expectations ranging from €650 million to €700 million. Read more.

• Mattel Inc. (NYSE: MAT) has acquired Sproutling, a San Francisco-based provider of wearable sleep monitors for infants. No financial terms were disclosed. Sproutling had raised over $6 million in VC funding from Lemnos Labs (where the company was incubated), First Round Capital, Forerunner Ventures, FirstMark Capital, Accelerator Ventures, BoxGroup and Shawn Fanning. www.sproutling.com

• Telenor (Oslo: TEL) has acquired Tapad, a New York-based provider of cross-device marketing solutions, for $360 million. Tapad had raised around $28 million in VC funding from FirstMark Capital, Firsthand Technology Value Fund, Avalon Ventures, Battery Ventures and G&H Partners. Read more.

OTHER DEALS

• Abbott Laboratories (NYSE: ABT) has agreed to acquire Alere Inc. (NYSE: ALR), a Waltham, Mass.-based provider of point-of-care diagnostic tests, for around $5.8 billion in cash. The $56 per share deal represents a 51% premium to where Alere shares closed trading on Friday. Read more.

• Comscore (Nasdaq: SCOR) has completed its previously-announced acquisition of Rentrak Corp. (Nasdaq: RENT) for $732 million in stock. www.comscore.com

• Mattel Inc. (NYSE: MAT) has acquired substantially all the assets of Fuhu Inc., an El Segundo, Calif.-based maker of tablets and other tech devices for children and families, for $21.5 million. Fuhu had filed for bankruptcy late last year, citing a conflict with manufacturing partner Foxconn. It had raised over $100 million from firms like DreamWorks Animation SKG, KDDI Ventures, Intel Capital and Simon Venture Group. www.fuhu.com

FIRMS & FUNDS

• The Carlyle Group has closed its second U.S. middle market buyout fund with $2.4 billion in capital commitments. www.carlyle.com

• Creandum, a Stockholm-based early-stage VC firm, has closed its fourth fund with €180 million in capital commitments. www.creandum.com

• Golding Capital Partners (Munich) has closed its eighth European private debt fund with 413 million in capital commitments. www.goldingcapital.com

• RPM Ventures, an Ann Arbor, Mich.-based VC firm, is raising up to $100 million for its third fund, according to a regulatory filing. www.rpmvc.com

Moving In, On & Up

• Claudia Fan Munce has agreed to join New Enterprise Associates as a venture advisor. She previously spent more than 30 years with IBM, the past 12 as managing director of the company’s venture capital group. www.nea.com

• Anne Richards has agreed to join Prudential PLC as CEO of its M&G Investments unit, succeeding the retiring Michael Mclintock. She previously was chief investment officer for Aberdeen Asset Management. Read more.

• Erin Valenti has joined Utah-based Mindshare Ventures as an executive-in-residence. She previously served as director of product development and special projects with Overstock.com, before which she was CEO of Skycrane Inc.

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