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From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.com

Subject:

Term Sheet - - Wednesday, October 6

Date:

06-10-2010 14:22:17
Message

Fortune Finance Street Sweep Term Sheet Economics Tech Wall Street Washington

The Term Sheet by Dan Primack

Wednesday -- October 6, 2010
Email Dan | Follow Dan on Twitter | Subscribe

Random Ramblings
Foundry Group, a Colorado-based VC firm known for investments in companies like Zynga and StockTwits,
yesterday announced that it has closed its second fund with $225 million in capital commitments (we had it
first at Fortune.com). It's also changing up what I once called "the best VC firm website ever."
First, the money: Foundry was launched in late 2006, out of the ashes of Mobius Venture Capital. It went
out seeking to raise $175 million for its debut fund, with a focus on early-stage IT, software and Internet
companies. Despite its first-time fund status, the team's track record -- including that of the ubiquitous Brad
Feld -- helped it secure $225 million from groups like Guardian Life, Parish Capital, Morgan Stanley and
UTIMCO.
And it seems to have been a smart investment. According to the latest performance data from UTIMCO
(through 5/31/10), Foundry's debut vehicle has the single best IRR of any other fund in the endowment's
entire private equity portfolio, at a whopping 63.67%. I'd assume that a lot of that figure is driven by Zynga,
but not all of it.
Foundry opted to target $225 million for the first fund, and held fast despite significant oversubscription. No
significant changes in investment strategy, and the team also remains intact (save for original partner Chris
Wand, who left more than a year ago).

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Now onto the website: After Wand left, Foundry opted to redesign its website with a Reservoir Dogs motif.
And, unlike a similar photo attempt by Blackstone Group execs, Foundry pulled it off.
To commemorate their new fund, however, Foundry has dropped the Dogs in favor of the Mad Men. It
looks right, and I know the show has its legions of fans (you should see Fortune.com's pageviews for Mad
Men-related posts). Unfortunately, I'm not one of them. So I'll keep the old site in my heart, while I await
what Foundry comes up with for Fund III (perhaps we should compile suggestions).
You can see the Reservoir Dogs and Mad Men photos by going here.
*** Henry Kravis yesterday said that he will donate $100 million to the Columbia Business School, to help
build around 450,000 square feet of new facilities on an old Manhattanville manufacturing zone. I've got
more info here, including video of Kravis explaining his donation.
*** Microsoft M&A: Yesterday I mentioned that Microsoft was nearing completion of a new acquisition, but
that it wouldn't make an announcement via press release. I've since learned that the deal is for AVIcode, a
Baltimore-based provider of application performance monitoring solutions. No financial terms will be
disclosed, although the price-tag is below $50 million.
*** I had dinner last night with a Silicon Valley "super-angel," and asked him the same question I ask
most of my biz dining companions: "If you were me, what would you be writing about?"
His reply was to investigate whether any other industry verticals can replicate what's been done with Web
2.0, in terms of scaling companies with very lean resources. Seems difficult - considering that Web 2.0
requires no "materials" beyond coders and visionaries - but it's one worth pondering.
*** If I were a Patriots season ticket holder, I'd sue for fraud. Unless there was some small print saying:
"Dear fan: We're not actually trying to win this year."
*** Housekeeping: As you've probably noticed, we tweaked the design a bit for this morning's issue. I'm
hopeful that it is now easier to read for those of you who were having troubles. Please let me know
*** Oops: Seems I'm speaking at the Village Ventures meeting at Boston's Liberty Hotel this afternoon (not
tomorrow). Actually, it's more of an interview, with Village's Matt Harris asking me questions. Should be fun.
Hope to see a bunch of you there

5 things you should read @Fortune.com

Pre-Marketing, including the year's best Wall Street quotes, stupid VC questions, Silicon Valley at
an entertainment/science crossroad, Lehman keeps hiring and the evolution of American couch
potatoes.

Meet the enemy of the MBA

A harsh new reality for company directors
How companies can fill the skilled worker gap
Live-blog from Fortune's Most Powerful Women Summit

The Big Deal

General Electric (NYSE: GE) has agreed to acquire Dresser Inc., a Dallas-based provider of products
and services for energy industry and infrastructure applications. The deal is valued at approximately $3

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billion. Riverstone Holdings bought Dresser in 2007 for $2.4 billion from First Reserve and Odyssey
Investment Partners, although First Reserve bought back a minority stake.

VC Deals
AppNexus Inc., a New York-based maker of a virtualized cloud computing platform for online advertising
applications, has raised $50 million in Series C funding. Microsoft was joined by return backers Venrock,
Kodiak Venture Partners and First Round Capital. www.appnexus.com
Pathwork Diagnostics Inc., a Redwood City, Calif.-based molecular dianostics company focused on
oncology, has raised $30 million in Series C funding. Alta Partners led the round, and was joined by return
backers Abingworth, Advent Venture Partners, Novus Ventures, Prospect Venture Partners and Venrock.
The company previously raised around $70 million. www.pathworkdx.com
Eventbrite, a San Francisco-based online event ticketing company, has raised $20 million in Series D
funding. DAG Ventures led the round, and was joined by Tenaya Capital and return backer Sequoia
Capital. The company previously raised $9.5 million. www.eventbrite.com
SocialShield, a San Bruno, Calif.-based provider of a cloud-based service that lets parents monitor their
children's social network use, has raised $10 million in Series A funding. Venrock led the round, and was
joined by individual angels. www.socialshield.com
Passenger, a Los Angeles-based developer of social networks for existing brands, has raised $7.5 million
in new VC funding. Return backers include Shelter Capital Partners, StarVest Partners and Steamboat
Ventures. In related news, Shelter Capital's Bahram Nour-Omid is joining Passenger as CEO.
No World Borders Inc., a Newport Beach, Calif.-based healthcare management and IT consulting
company, has raised an undisclosed amount of equity funding led by Palos Verdes Venture Partners.
www.noworldborders.com

Private Equity Deals

Apax Partners and The Carlyle Group are considering separate offers for a 70% stake in listed Italian
clothing distributor Gruppo Coin SpA. The stake is being offered up by PAI Partners, and is valued at
approximately $1.1 billion.
ArcLight Capital has agreed to acquire a 9.9% equity stake in Enogex, the midstream natural gas pipeline
subsidiary of OGE Energy Corp. (NYSE: OGE). The deal is valued at $183 million, and is expected to
close by next month. www.oge.com
The Canada Pension Plan Investment Board has agreed to acquire a 10% stake in Toronto's 407
Express Toll Route from Spain's Ferrovial. The deal is valued at C$894 million, and follows an earlier
announcement that CPPIB will acquire a 30% stake in the highway from Australia's Intoll. www.cppib.ca
Cleveland Ship has offered to acquire the $6 billion military shipbuilding unit of Northrop Grumman
Corp., according to Reuters. Other bidders include The Carlyle Group and KKR.
Kana Software, a portfolio company of Accel-KKR, has agreed to acquire Lagan Technologies, an
Ireland-based provider of government-to-citizen technology, from investors like DFJ Esprit. No financial
terms were disclosed. www.kana.com

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KKR has acquired a 9% stake in India's Avantha Power & Infrastructure Ltd., ahead of the company's
IPO. The deal reportedly is worth around $49 million. www.kkr.com
VTB, a state-controlled bank in Russia, is in talks to sell a 10% equity stake to a consortium that includes
TPG Capital. According to The Financial Times, the deal could be worth upwards of $3 billion.
Welsh, Carson, Anderson & Stowe has acquired a majority stake in Peak 10 Inc., a Charlotte, N.C.based managed services company. No overall pricing terms were disclosed, but the transaction did include
a new $155 million credit facility co-lead arranged by RBC Capital Markets and General Electric Capital.
www.peak10.com
Wilmington Trust Corp. (NYSE: WL) is looking to raise capital from private equity firms, according to
Bloomberg. If unsuccessful, the Delaware bank may consider selling itself. Lazard and JP Morgan Chase
are serving as advisors.
TA Associates has agreed to invest an undisclosed amount in Amann Girrbach AG, a German maker of
equipment and consumables for dental reconstruction. Sellers include Alpine Equity. www.ta.com

PE-backed IPOs
Nordic Capital may relaunch its IPO plans for Danish ambulance service company Falck, following the
successful offering for Danish jeweler Pandora (owned by Axcel), according to Reuters.

Exits
Actis has hired Enam Securities to manage a sale of the firm's 66% stake in Indian lamp maker Halonix
Ltd. (BO: HALO), according to Reuters. The position is valued at around $56 million. www.act.is
Meda AB has acquired Alaven Pharmaceutical LLC, a Marietta, Ga.-based specialty drug company
focused on women's health, gastroenterology and anemia, from DFW Capital Partners and Greyrock
Capital Group. The deal values Alaven at $350 million. www.alavenpharm.com

Other Deals
Robins & Myers Inc. (NYSE: RBN) has agreed to acquire listed oilfield product maker T-3 Energy
Services for $422 million in cash and stock.
Crucell, a Dutch biotech company, said it would recommend a $2.4 billion acquisition offer from Johnson
& Johnson.

Firms & Funds

Macquarie has acquired the remaining assets of U.S. fund-of-funds manager GKM Newport, according to
Private Equity Insider. www.macquarie.com

Moving In, Up and On

Phillip Filippelis has joined Angelo, Gordon & Co. as a managing director in the firm's Sidney office. He
previously was head of institutional business in Australia and Southeast Asia for Societe Generale Asset

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Management and its TCW affiliate. www.angelogordon.com

Alex van Someren, co-founder of nCipher, has joined Amadeus Capital Partners as a partner in the
firm's 10 million seed fund. www.amadeus.com
Daniel Barney and Richard Kerby have joined Institutional Venture Partners as associates. Barney
previously worked in the tech I-banking group of BoA Merrill Lynch, while Kerby worked in the tech Ibanking group of Credit Suisse. www.ivp.com

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