Page 1 of 6

From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.com

Subject:

Term Sheet -- Thursday, November 18

Date:

18-11-2010 15:25:45
Message

Fortune Finance Street Sweep Term Sheet Economics Tech Wall Street Washington

The Term Sheet by Dan Primack

Thursday -- November 18, 2010
Email Dan | Follow Dan on Twitter | Subscribe

Random Ramblings
A group of Donald Trump's pals recently launched a website called ShouldTrumpRun.com, trying to
convince the bloviating billionaire to take on President Obama in 2012. It's gotten a bit of media attention,
with Trump telling George Stephanopoulos today that a White House bid "could be fun."
Helping to lead the charge is Stewart Rahr, a billionaire buddy who Forbes lists as America's 170th richest
person. Now it looks like Rahr's pockets will get a bit heavier, as Cardinal Health (NYSE: CAH) has agreed
to buy his company, Kinray Inc., for $1.3 billion in cash.
For those not familiar with the pharma market, Kinray is a giant drug distributor in the New York
metropolitan area. It reports around $3.5 billion in annual sales, with around 1,000 employees and over
2,000 customers. Dublin, Ohio-based Cardinal will use Kinray to strengthen its Northeastern U.S. platform,
plus increase its retail independent pharmacy base by around 40 percent.
The deal is expected to close by year-end. Kinray was repped by law firm Dechert LLP, while Cardinal
used Wachtell, Lipton, Rosen & Katz.
No word yet on what Rahr's role will be going forward, if any. Even if he sticks with Cardinal for a while,
he'll certainly have a bit more free time. Maybe that means the chief executive's next role will be as
campaign manager...

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

16-12-2015

Page 2 of 6

*** CalPERS is the nations largest investor in alternatives, with a $48.2 billion portfolio spread out over
hundreds of funds. But it appears to have made just two new fund commitments in the first half of 2010,
according to an investment report released on Monday. One was for a Latin America-focused vehicle from
Advent International, and another was for a credit fund managed by GSO Capital.
*** Speaking of fund commitments, Summit Partners is in the late stages of raising a pair of new
vehicles: $3 billion for its latest private equity fund, and $450 million for its third venture capital fund. Two
notes:

1. Im told that Summit is hoping to do a single dry close in 2010, in part so that investors dont have
to dip into their 2011 allocations. Not sure if that means that LPs are under-allocated in 2010 (see
CalPERS, above), or if theyre expecting big doings in 2011.

2. The fact that Summit is raising a third venture fund is a testament to the rehab that its team did on
the firms first VC fund (called Accelerator) which was raised just before the dotcom bubble
crashed. Moreover, Summit Ventures III is actually expected to be larger than Summit Ventures II
($300m).
*** Kayak confusion: Yesterday I delved into the IPO filing of online travel company Kayak, and why its
worries about the ITA/Google merger are well-founded (from a financial perspective). You can read it here.
One thing I didnt address, however, is the continuing oddity of General Catalyst partner Joel Cutler serving
as a board member of both Kayak and ITA. I first wrote about the beyond-obvious conflict last month, and
how Kayaks non-response response was:
"KAYAK is an independent company with an obligation to do what is in its best interests. Mere common
ownership interest by a VC is not a conflict. The two companies share only one common director, and to
the extent that director has a conflict, he has an independent obligation to fulfill his fiduciary duties. He is
one of 7 directors at KAYAK."
Actually, a real non-response came from General Catalyst, which never returned my calls (and here I
thought we were all Boston buds -- maybe they just don't want me to also ask about how the firm was
added as a defendent to that Cash4Gold-related lawsuit).
Lets be clear: There is no reasonable way for Cutler to fully honor his fiduciary duties to both Kayak and
ITA. Not only is he a Kayak board member, but he also chairs the companys audit and compensation
committees. Does he just leave the room every time ITA comes up as an issue? And, if ITA is as big a deal
as Kayak says it is, then isnt Cutler spending more time with the vending machine than with his fellow
board members?
Its time to make a choice, and Im surprised Kayak didnt force the issue before filing its IPO. Of course,
Im also surprised that it didnt wait until the ITA/Google situation gets resolved
*** Connecticut-based secondaries firm Landmark Partners has agreed to sell a majority stake to Indias
Religare Enterprises, as first reported by Private Equity Insider. The story says that Religares stake could
be valued as high as $150 million, and my understanding is that the position is just a little bit over 50
percent. In other words, Landmark got valued at nearly $300 million.

5 things to read @Fortune.com

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

16-12-2015

Page 3 of 6

Pre-Marketing, including the letter Buffett should have written,

The List: Fortune's Businesspeople of the Year

Colin Barr: Sorry, but GM is not the largest IPO on record

Nin-Hai Tseng: 3 signs of QE2 progress to watch for

Dan Primack: Why Kayak is worried about the Google/ITA merger

The Big Deal

General Motors yesterday raised over $20 billion in its IPO, pricing 478 million common shares at $33 per
share and selling another $4.3 billion of common stock. In early morning trading, its already up another $2
per share (presumably as retail investors finally get to take their bites).
There was no other conceivable choice for todays big deal, since so many media outlets are calling this
the largest IPO in history. Its worth noting, however, that such a distinction only works if you ignore inflation
and currency fluctuations.
My Fortune Finance colleague Colin Barr reports that GM actually is the third-largest IPO on record, if you
revalue the 1987 IPO of Nippon Telegraph & Telephone ($15b then, revalued at nearly $30b) and the 1998
offering of Nippon wireless unit NTT DoMoCo ($18b then, $20b now). Read more of his analysis here.

VC Deals
Anobit Inc., an Israel-based provider of solutions to the NAND flash memory market, has raised $32
million in new VC funding led by Intel Capital. The company has now raised over $70 million, from firms like
Intel, Battery Ventures and Pitango Venture Capital. www.anobit.com
Meebo Inc., a Mountain View, Calif.based provider of Web-based instant messaging, has raised $25 in
Series D funding. Khosla Ventures led the round, and was joined by return backers Sequoia Capital and
Draper Fisher Jurvetson. The company previously raised around $38 million, from Sequoia, DFJ, KTB
Ventures, Time Warner Investments, True Ventures and Jafco Ventures. www.meebo.com
Altius Education Inc., a San Francisco-based provider of online higher education, has raised $18.6 million
in Series B funding. Charles River Ventures led the round, and was joined by return backers Maveron and
Spark Capital. www.altiused.com
Adaptivity, a Charlotte, N.C.-based provider of IT design and implementation solutions, has raised $3
million in new Series A funding from Intel Capital. The round now stands at $10 million. www.adaptivity.com
Optimizely, a Santa Clarita, Calif.-based developer of online A/B testing solutions, has raised $1.2 million
in seed funding. Backers include Ron Conway, Chris Sacca, Steve Chen, Ashton Kutcher, Mitch Kapor,
Chris Dixon, Joshua Schachter, Naval Ravikant and Ram Shriram. www.optimizely.com
Federated Media Publishing, a Sausalito, Calif.-based operator of an advertising network for online
publishers, has acquired online food community Foodbuzz. No financial terms were disclosed. Federated
Media is backed by firms like Oak Investment Partners and Omidyar Network. www.federatedmedia.net

Private Equity Deals

Cascade Bancorp (Nasdaq: CACB), a Bend, Ore.-based community bank, has agreed to raise $177
million in new capital. Participants include Lightyear Capital ($40m), Leonard Green & Partners, WL Ross &

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

16-12-2015

Page 4 of 6

Co. and David Bolger. www.botc.com

Dynegy (NYSE: DYN) has postponed a vote on its proposed acquisition by The Blackstone Group until
next Tuesday. The original vote was scheduled for yesterday, but Dynegy made the move amid activist
shareholder pressure and a last-minute price change from $4.50 to $5 per share by Blackstone.
www.dynegy.com
Levine Leichtman Capital Partners has acquired Santa Cruz Nutritionals from Swander Pace Capital.
No financial terms were disclosed. SCN is a Santa Cruz, Calif.-based maker of gummy nutritional products
and dietary supplements. www.llcp.com

PE-backed IPOs
E-Commerce China DangDang Inc., a Beijing-based B2C ecommerce company in China (with an
emphasis on books), has filed for a $200 million IPO. It plans to trade on the NYSE under ticker symbol
DADA, with Morgan Stanley and Credit Suisse serving as co-lead underwriters. Shareholders include Tiger
Global Private Investment Partners, DCM-Doll Capital Management and IDG Technology Ventures.
www.dangdang.com
LPL Financial, a Boston-based brokerage, raised over $468 million in its IPO. The company priced around
15.61 million shares at $30 per share ($27-$30 range), for an initial market cap in excess of $3.2 billion.
LPL will trade on the Nasdaq under ticker symbol LPLA, while Morgan Stanley and Goldman Sachs served
as co-lead underwriters. LPL backers include Hellman & Friedman and TPG Capital. www.lpl.com

Exits
Consus Investments has received at least three bids for South Korean medical device company Medison
Co. Ltd., according to Reuters. The deal is expected to garner at least $300 million. Suitors include
Samsung Electronics and SK Holdings.
PAI Partners is looking to sell its majority stake in Italian department store chain Gruppo Coin, according
to Bloomberg. The firm has retained UBS and Mediobanca for the process, which is expected to generate
around 1 billion.
Sagard has held informal talks about selling French electric connectors company Souriau for up to 500
million, according to Reuters. Sagard bought Souriau from AXA Private Equity in 2006.
RealPage Inc. (Nasdaq: RP), a Carrolton, Texas-based provider of online property management systems
for the multi-family housing market, has filed for a secondary public offering of nine million shares. The
companys stock closed trading on Tuesday at $27.08 per share. Sellers include Apax Partners, Advanced
Capital Partners and Camden Partners. RealPage went public earlier this year in a $135 million IPO at $11
per share. www.realpage.com

Other Deals
Cablevision Systems Corp (NYSE: CVC) said that it is considering a leveraged spinout of its
Rainbow Media programming unit, rather than a sale.. The division includes the AMC and
Sundance Channel. www.cablevision.com
Walter Energy (NYSE: WLT) is in talks to buy Canadian coal company Western Coal (TSX:

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

16-12-2015

Page 5 of 6

WTN) for $3.24 billion.

Cardinal Health (NYSE: CAH) has agreed to acquire New York pharmaceutical distribution
company Kinray for $1.3 billion in cash. www.kinray.com

Firms & Funds

.406 Ventures is raising upwards of $175 million for its second fund, according to a regulatory filing. The
Boston-based firm closed its debut fund in early 2008 with $167 million in capital commitments.
www.406ventures.com
GCP Capital Partners has held a $200 million first close for its first independent fund since spinning out of
Greenhill & Co., according to Buyouts newsletter. The New York-based firm focuses on control investments
for companies with enterprise values of between $50 million and $500 million.
Seedcamp, a European seed funding and startup incubator, has held a $4 million first close on its second
fund. Backers include Notion Capital, 360 Capital Partners, Team Europe, Atlas Venture and Index
Ventures. www.seedcamp.com

Moving In, Up and On

Scott Bluestein has joined Hercules Technology Growth Capital as chief credit officer. He previously
founded Century Tree Capital Management, a fund that made senior secured debt investments with
warrants and equity co-investments to small and micro-cap public and private companies. www.htgc.com
Lee Landrum has joined Tennenbaum Capital Partners as a managing director. He previously was with
The Carlyle Group, as a principal in the firms global credit alternatives group.
www.tennenbaumcapital.com
Square 1 Bank announced several management changes, following the unexpected death of firm
chairman and CEO Richard Casey. Effective immediately, board member Robert Muehlenbeck will
become company chairman, while a body of six Square 1 executives will fulfill the CEO responsibilities until
a permanent replacement is selected. www.square1.com
Salil Pitroda has joined Symphony Technology Group as a principal. He previously worked in the New
York office of Asia-focused private equity firm New Silk Route Partners. www.symphonytg.com

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

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

16-12-2015

Page 6 of 6

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