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From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.com

Subject:

Term Sheet -- Friday, October 15

Date:

15-10-2010 13:43:20
Message

Fortune Finance Street Sweep Term Sheet Economics Tech Wall Street Washington

The Term Sheet by Dan Primack

Friday -- October 15, 2010
Email Dan | Follow Dan on Twitter | Subscribe

Random Ramblings
No, the SEC has not yet announced a settlement with Steve Rattner. Maybe today.
Word is that if the SEC had its druthers, it would reach a settlement simultaneous to a Rattner settlement
with the NY Attorney General's Office. Seems that latter one is taking a bit longer to work out (maybe
because of that immunity deal, or maybe because Cuomo wants way more than $6 million in restitution).
So while we wait, two quick notes:

1. Andrew Cuomo may be in a political no-win if he settles before next month's election. If he lets
Rattner off with just a financial penalty - even if it approaches the $20 million paid by Riverstone's
David Leuschen (and I hear it could) - then Cuomo will be accused of letting rich folks buy their way
out of jail. Moreover, there could be some embarrassing details released about how quickly Cuomo
was willing to give Rattner immunity.
If he doesn't settle before the election - and the SEC does - then he could be accused of letting a
major Democratic donor off the hook.

2. Mike Bloomberg is in full "see no evil, hear no evil" mode. A reporter yesterday asked: If Rattner
settles with the SEC and agrees to a ban from the securities industry, will you keep him on as your
money manager?

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The Mayor's reply: "Steve Rattner's my friend, of course I'd keep him on. Why would you not? If he
can do anything to help, I value his advice and he's a close friend of mine, and you stick by your
friends. I don't know what he's going to do, but we'll see."
*** Answer Key: Last week I asked you to "name another early-stage VC firm about to raise its second
fund, with a fairly similar strategy to that of OATV?" This came on the heels of my report that OATV had
quietly closed its second fund.
The answer was First Round Capital, as formally disclosed yesterday in an SEC filing. The doc reports
$126.4 million in commitments, which may or may not represent a final close.
*** Precious portfolio? In late 2008, Boston-area VC firms Highland Capital Partners and General
Catalyst Partners pumped $40 million into a Florida company called Green Bullion Financial Services.
Doesn't ring a bell? Let me try it this way:
In late 2008, Boston-area VC firms Highland Capital Partners and General Catalyst Partners pumped $40
million into the parent company of Cash4Gold.
But here's the weird thing: Highland tells me that it's no longer a shareholder in Green Bullion, but refuses
to say how or when it exited. General Catalyst goes one step further, refusing to even say whether it Green
Bullion is still in its portfolio.
I'm used to VC firms declining to discuss new investments (stealth-mode, etc.) or fundraising efforts (SEC
restrictions). But it is highly unusual for them not to acknowledge exits, even in uncomfortable situations
like bankruptcies or equity washouts.
So if anyone out there knows what's actually going on, I'd love to know. This was an odd deal from the getgo, reading more like a dividend play than anything else. Maybe there were troubles related to gold's
consistent march toward valuation infinity. That may sound counter-intuitive, but I recall someone once
arguing that companies like Cash4Gold actually generate better margins at lower precious metal prices
Again, I'm at a loss
*** Have a great weekend. Go Pats (and Rangers)!

5 things you should read @Fortune.com

Pre-Marketing, including the Valley's fading love afair with options, a guide to financial reform
acronyms, Howard Marks sounds the alarm, Don Valentine talks "big markets" and new VC
investment data.
Mark Suster: Beware of becoming a conference ho

Scott Woolley: Carly Fiorina's troubling telecom past

Dan Primack: Is a leveraged buyout of Yahoo even possible?

Tory Newmyer: On the campaign trail, financial reform is tabboo

The Big Deal

Seagate Technology PLC (Nasdaq: STX) said it is in talks to be taken private. The Scotts Valley, Calif.based hard-drive maker did not disclose its suitor, but various media outlets report it to be TPG Capital.
The deal could be worth more than $6 billion.

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Seagate previously was taken private for $2 billion in 2000, by a consortium that included TPG, Silver Lake
Partners, CCMP Capital (f.k.a. Chase Capital Partners), Goldman Sachs, August Capital and Integral
Capital Partners. It returned to the public markets three years later. www.seagate.com

VC Deals
New Relic Inc., a San Francisco-based SaaS provider of application performance management solutions,
has raised $10 million in Series C funding. Tenaya Capital led the round, and was joined by Allen & Co.
and return backers Benchmark Capital and Trinity Ventures. www.newrelic.com
ViroXis Corp., a San Antonio-based developer of an anti-viral therapeutic derived from East Indian
Sandalwood oil, has raised $2.5 million from Startech and the South Texas Regional Center of Innovation
and Commercialization. www.viroxis.com

Private Equity Deals

Apax Partners and Bridgepoint have acquired French jewelry retailers Histoire D'Or and Marc Orian, for
600 million. Sellers were Silverfleet Capital and Qualium Investissement. www.apax.com
Bain Capital and The Blackstone Group are planning to bid for Capsugel, a capsule-making unit that
Pfizer put on the block last week, according to The NY Times. Morgan Stanley is managing the process.
Capsugel reported $740 million in 2009 revenue, which represented a 4% decrease from 2008.
www.pfizer.com
Bain Capital, Carlyle Group, KKR and TPG Capital are circling Northrop Grumman Corp.'s shipbuilding
unit, according to Bloomberg. The unit could be worth at least $2.5 billion, with first bids due next week.
www.NorthropGrumman.com
Resolution, a UK buyout platform focused on the insurance sector, has agreed to acquire Bupa Health
Insurance for 102 million.
Shamrock Capital has completed its acquisition of Screenvision, a New York-based provider of incinema advertising, from ITV PLC and Technicolor. No financial terms were disclosed. In related news,
Travis Reid, former CEO of Digital Cinema Implementation Partners, has been named Screenvision's new
CEO. www.screenvision.com
Source Capital has acquired Precision Boilers Inc., a Morristown, Tenn.-based maker of boiler room
products, from Tennessee Valley Ventures. No financial terms were disclosed. Brookwood Associates
advised Precision Boilers on the deal. http://www.precisionboilers.com
TPG Growth has invested $48.8 million for around 25% of the outstanding shares in Schiff Nutrition
International Inc. (NYSE: WNI), a Salt Lake City-based baker of branded and private label vitamins,
nutritional supplements and nutrition bars. The seller was Weider Health and Fitness.
www.schiffnutrition.com

PE-backed IPOs
Stentys SA, a French maker of heart stents, plans to raise around $32 million via an IPO in Paris. Backers
include Credit Agricole Private Equity, Sofinnova Partners and Scottish Equity Partners. www.stentys.com

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Exits
PAI Partners is considering a sale of European car parts retail Kwik Fit, according to Reuters. It has hired
Credit Suisse and Morgan Stanley to explore options for the company, which could be worth approximately
$1 billion. PAI bought Kiwk Fit from CVC Capital Partners in 2005 for approximately $1.3 billion. www.kwikfit.com
TA Associates has agreed to sell its control stake in 2nd Story Software, provider of digital tax
preparation solutions, to H&R Block (NYSE: HRB) for $287.5 million in cash. TA sponsored an $85 million
leveraged recap of 2nd Story Software in December 2004. www.ta.com

Other Deals
Sugar Inc., a San Francisco-based online media network for women, has acquired virtual shopping service
MyPerfectSale. No financial terms were disclosed. Sugar has raised around $30 million in VC funding,
from Sequoia Capital and NBC Universal. www.sugarinc.com
Sinochem Corp. does not plan to launch a counterbid for Potash Corp., according to Reuters.
Wal-Mart is looking to buy Russian grocer Kopeika, according to a local press report. Russian group X5
also plans to bid.

Firms & Funds

Conduit Capital Partners is planning to raise between $500 million and $750 million for its next Latin
American energy fund, according to Buyouts newsletter. www.conduitcap.com
Spark Capital, a Boston-based venture capital firm whose portfolio companies include Twitter, has closed
its third fund with $360 million in capital commitments. This is the same size of its second fund, which was
raised in 2007. www.sparkcapital.com

Moving In, Up and On

Performance Equity Management has promoted Frank Brenninkmeyer to managing director. He joined
the firm in 2006 as a principal, before which he was with GE Asset Management. www.peqm.com
David Peress has joined Streambank LLC, a provider of intangible asset disposition, advisory and
valuation services, as a principal. He previously was president of Hudson Capital Partners.
www.streambankllc.com

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