Tuesday Talkback
The sun is shining, the Fed is getting frisky and a big thanks to everyone who visited J's website last week. In other words, it's time for some brief Tuesday Talkback.
• First up were some emails on the IPO market, in light of Twilio's filing. Neal: “I think there are big differences in the tech and biotech IPO markets, timeframe and required capital being two. Any biotech company’s time horizon for delivery of a customer product is measured in decades and hundreds of millions of dollars. That gamble for investors is often binary: If the drug works, you know you’ll make back your investment and turn a profit. If it doesn’t, you lose everything. So the biotech company’s valuation is predicated on the percent likelihood of any of the drugs in pipeline succeeding.”
Larry: "I wouldn't pin my hopes to Twilio, a company where the CEO has already cashed in $15 million and gets over $300,000 in salary (not including his millions worth of stock options). One reason startups used to pop after going public was that the public markets thought these entrepreneurs were hungrier than what was already in their portfolio. How hungry can you be when you're already fat on cash."
• Roy on LendingClub: "You refer to the board as 'cagey' in terms of public communications, but I think it either is being dishonest or really wasn't paying attention and is now trying to play catch up. Either way, it risks taking down other online lenders who (to our knowledge) are playing by the rules."
• Dave on the SV Angel situation: "Man - you missed low hanging fruit with 'the biggest split since another David Lee left Van Halen...' in the lede."
• Some emails on Donald Trump's concerns about a tech bubble: Vito: "No one cares what any of these candidates are saying because the electorate has decided that they are lying anyway."
Brian: "So do the socialists make more sense to you?? That seems to be what you are saying!!"
Aidan: "Trump's comments on tech stocks are, as you write, nonsensical. But they may connect to that Legg Mason survey about the American Dream. We're in a bizarro world in which economic pessimism is now appealing to vast sectors of the electorate, even those who have no objective reason to complain. Trump, and Sanders for that matter, understand this and are exploiting it expertly. Why not add fears of another 'tech bubble' on top, particularly since it came at the end of Bill Clinton's presidency? Pathetic of Trump to do it, but more pathetic of 'us' to reward it."
THE BIG DEAL
• Jawbone, a San Francisco-based consumer tech device maker, is seeking to sell off its Jambox wireless speaker business so that it can focus exclusively on wearables, according to Fortune. The company has raised over $900 million in VC and private debt funding, including at a top valuation of $3.2 billion. Read more.
VENTURE CAPITAL DEALS
• Lalamove (f.k.a. EasyVan), a Hong Kong-based provider of on-demand logistics solutions, has raised $10 million in new VC funding. MindWorks led the round, and was joined by fellow return backers Crystal Stream, AppWorks and Aria Group. New investor Asia Plus (Thailand) also participated. Read more.
• Tynker, a coding-for-kids startup, has raised $7.1 million in Series A funding. Backers include Cervin Ventures, Felicis Ventures, New Ground Ventures, Reach Capital and Relay Ventures. Read more.
• Hooch Inc., a New York-based “members-only cocktail society app,” has raised $950,000 in seed funding led by Blue Scorpion Investments. www.hooch.co
PRIVATE EQUITY DEALS
• Accel-KKR has agreed to acquire SciQuest Inc. (Nasdaq: SQI), a Morrisville, N.C.-based provider of spend management solutions, for around $509 million, or $17.75 per share (34% premium over Friday’s closing price). www.sciquest.com
• CIVIQ Smartscapes, a Milford, Mass.-based portfolio company of JMC Capital Partners, has acquired Vertigo Digital Displays, a Toronto-based maker of “ruggedized integrated digital display solutions.” No financial terms were disclosed. www.civiqsmartscapes.com
• CVC Capital Partners has acquired AR Packaging, a Swedish maker of cigarette packaging, from Ahlstrom Capital and Accent. No financial terms were disclosed, but Reuters puts the enterprise value at just below €450 million. Read more.
• CVC Capital Partners has agreed to acquire Italian gaming and payment services company Sisal Group at an enterprise value of €1 billion (including debt). Sellers include Apax Partners, Clessidra and Permira. Read more.
• Genstar Capital has acquired Infinite RF Holdings Inc., an Irvine, Calif.-based provider of “engineering grade” RF technology components. No financial terms were disclosed. www.gencap.com
• PAI Partners has agreed to acquire Atos Medical, a Swedish medical device maker, from EQT Partners. No financial terms were disclosed, but Reuters reports a sale price of around €850 million. Read more.
• Thompson Street Capital Partners has sponsored a majority recapitalization of Software Global Inc., a Raleigh, N.C.-based provider of Excel-based automation and reporting software. No financial terms were disclosed. www.globalsoftwareinc.com
• United Flexible Inc., a UK-based portfolio company of Arlington Capital Partners, has agreed to acquire Kreisler Manufacturing Corp. (OTC BB: KRSL) for around $34.2 million, or $18 per share. Kreisler is an Elmwood Park, N.J-based manufacturer of precision metal components and assemblies for use in commercial and military aircraft engines as well as industrial gas turbines. www.kreislermfg.com
IPOs
• Atkore International Group, a Harvey, Ill.-based maker of electrical circuitry raceway products for non-residential construction and renovation markets, has set its IPO terms to 12 million shares being offered at between $20 and $22 per share. It would have an initial market cap of around $1.31 billion, were it to price in the middle of its range. The company plans to trade on the NYSE under ticker symbol ATKR, with Credit Suisse, Deutsche Bank and J.P. Morgan are serving as lead underwriters. Atkore reports around $67.3 million of net income on $6.4 billion in revenue for the 12 months ending Dec. 25, 2015. It is owned by Clayton Dubilier & Rice. www.atkore.com
• China Online Education Group, a Beijing-based online education platform focused on English language proficiency, has set its IPO terms to 2.4 million American depository shares being offered at between $18 and $20 per ADS. It plans to trade on the NYSE under ticker symbol COE, with Morgan Stanley and Credit Suisse are serving as lead underwriters. The company reports a $50.5 million net loss on nearly $24 million in revenue for 2015. Shareholders include DCM (24.1% pre-IPO stake) and Sequoia Capital China (19.3%).
EXITS
• Centerbridge Partners has hired Citigroup to find a buyer for Culligan International, a Rosemont, Ill.-based water treatment company, according to the WSJ. The deal could value Culligan at around $900 million. Read more.
• China Life Insurance and China Taiping Insurance have expressed preliminary interest in acquiring ING Life Insurance Korea from MBK Partners, in a deal that could be valued at around $3 billion, according to Reuters. Read more.
• Jazz Pharmaceuticals PLC (Nasdaq: JAZZ) has agreed to acquire Celator Pharmaceuticals Inc. (Nasdaq: CPXX) for approximately $1.5 billion in cash, or $30.25 per share (72.56% premium over Friday’s closing price). Celator is a Ewing, N.J.-based cancer drugmaker whose shareholders include Thomas McNerney & Partners (5.95% of outstanding stock) and Domain Associates (5.66%). Read more.
OTHER DEALS
• AirAsia Bhd. of Malaysia has received a $1 billion takeover offer for its aircraft leasing business (Asia Aviation Capital), according to a Bloomberg interview with CEO Tony Fernandes. The bidder was not identified. Read more.
• Great Plains Energy (NYSE: GXP) has agreed to buy Topeka, Kansas-based rival utility Westar Energy (NYSE: WR) for approximately $8.6 billion. Read more.
• HNA Group of China has agreed to acquire a 13% stake in air carrier Virgin Australia Holdings (ASX: VAH), and also is in talks to acquire a 49.9% stake in Servair from Air France (Paris: AF). Read more.
• Philippine Long Distance Telephone Co. and Globe Telecom Inc. have acquired the telecom business of Philippines-listed conglomerate San Miguel Corp. for approximately $1.5 billion (including debt). Read more.
FIRMS & FUNDS
• 5AM Ventures, a life sciences-focused VC firm, has raised $285 million for its fifth fund, according to a regulatory filing. www.5amventures.com
• Chrysalix Venture Capital, a Canadian VC firm focused on alternative energy, has partnered with Dutch robotics commercialization center RoboValley to create a new VC fund focused on robotics. The vehicle is targeting €100 million. www.chrysalix.com
• New Richmond Ventures is raising up to $30 million for a new “early-stage growth fund,” according to a regulatory filing. www.nrv.vc
MOVING IN, ON & UP
• Rob Yang has joined KKR as a managing director and head of greater China real estate. He previously served in similar roles at The Blackstone Group. www.kkr.com
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