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From:

"Dan Primack"

Name:

Dan Primack

Email Address:

Dan_Primack@fortune.chtah.com

Subject:

Term Sheet -- Friday, October 29

Date:

29-10-2010 14:59:29
Message

Fortune Finance Street Sweep Term Sheet Economics Tech Wall Street Washington

The Term Sheet by Dan Primack

Friday -- October 29, 2010
Email Dan | Follow Dan on Twitter | Subscribe

Random Ramblings
To kick off our collective Friday, a bit of Term Sheet housekeeping: For at least the next week
(and perhaps a few days longer), your morning missives will be written by Fortune scribe Katie
Benner. Shell also be handling Pre-Marketing duties over on the website.
No, I havent been suspended. Nor am I taking vacation (that would be rude, just six weeks into
a new job). This break is a scheduled paternity leave, since the home office is expected to get a
new addition early next week (no, not a fax machine). So if you just happen to be hanging out
in the Brigham & Womens maternity ward, stop by and say hello
If you have any press release, news tips, scoops, etc. for Katie, she can be reached via email at
katie_benner@fortune.com. Thanks in advance, Katie
*** A few notes from yesterdays Blackstone media call, which I live-blogged here:
1. James took issue with press reports that Chinas Bright Foods had passed on buying
United Biscuits, a British bakery company owned by Blackstone and Permira. He said that
Blackstone has been in touch with Bright Foods, which expressed continuing interest.
2. I asked James if Blackstone would be making any talent acquisitions borne of the Volcker
Rule, kind of like what KKR did with those Goldman Sachs prop traders. He said it was
unlikely, given that: (a) Blackstone already has a large credit group, and (b) The firms
focus is more on lower-end opportunities than macro. He did add, however, that the

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firm is in talks to pull a structured finance team out of a bank, although he didnt name
names.
3. I also asked James about the midterm elections, and how he felt about a GOP-controlled
House. Rather than get into any sort of policy discussion, James said: I'm hoping that
we end up with a government that isn't so polarized that it can't enact legislation. We're a
country that still needs a lot of things done.
*** Speaking of politics, I spent part of yesterday writing about how next Tuesday is likely
to affect the venture capital industry. My working assumption was a GOP takeover of the House,
plus some gains in the Senate. The full piece will run next week (perhaps with some major
edits), but heres the Cliffs Notes version of what changes:
Tax policy (better for VCs), energy policy (worse), financial regulatory policy (maybe better),
healthcare policy (wash) and immigration (wash). In other words, VenturePAC knows what its
doing by giving more to Republicans than to Democrats, but not too much more.
*** Fund scoop: Los Angeles-based Ares Management is in the process of raising a Chinese
growth equity fund. It is dollar-denominated, with a $750 million target. Word is that its nearing
the halfway point on commitments.
*** Some of you have emailed to ask if Im planning to write a grand post-mortem on Fuse
Capital, the venture capital firm that also has gone by such names as ComVentures and Velocity
Interactive Group. Just this week, Ross Levinsohn bailed to run U.S. operations for Yahoo, while
fellow partner Mickie Rosen took over as CEO of a Fuse-backed startup called Tecca. In other
words, this firm is among the walking dead.
Remember, the key to being a zombie is that youve got more spark in your step than the
typical corpse.
For Fuse, that means collecting over $8 million in fees from limited partners this year, based on
legacy portfolios. That figure will decline a bit next year, but still will represent a pretty generous
living for the small handful of remaining staffers.
So, for now, the real question is if those staffers will be allowed to continue drawing paychecks.
Some Fuse investors already have begun (very) early discussions about firing the general
partner, with Saints Capital among the possible replacements. There is a good case to be made
that LPs should can the remaining Fuse team out of spite, given its historical inability to play
well with others.
But, like with most things venture, the ultimate decision probably will be based on dollars: If a
replacement GP will cost less while promising similar services particularly for a couple of Fuse
portfolio companies in India then a deal will be struck. If not, LPs will stay status quo and just
ride out the storm while focusing their attentions on more pressing matters
*** Have a great weekend. Happy Halloween and go Pats!

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(again), AIA soars on the Hang Seng, and more on the man behind Todd Combs.
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Tech wars: Apple's revenue now tops that of Microsoft

Vote: Before there was Nov. 2, there was Fortune's Business Person of the Year Showdown

The Big Deal

AIA Group, the Hong Kong-based Asian life insurance unit of AIG, popped in its debut on the Hang Seng
stock exchange. The stock closed 17% over its IPO price to place the company's market value at around
$35.8 billion, well over the $30.4 billion offer that Prudential made for the unit ths spring. AIG could raise
another $20.5 billion if it exercises an overallotment option, Wall Street parlance for an option to sell more
shares. This would reduce AIG's stake in AIA to 33% from nearly 60%.
This is a big deal because the successful spin off puts AIG that much closer to paying down the $130 billion
in taxpayer funds that were used to save the insurance giant during the credit crisis. Proceeds from the
sale will benefit, among other government agencies, the New York Fed. It also marks the largest IPO in
Hong Kong history.

VC Deals
Cappella Inc. a Galway, Ireland-based developer of medical devices to treat bifurcation
vascular disease, has raised 10.5 million in Series D funding. Return backers include
Polytechnos Partners, ACT Venture Capital, Fountain Healthcare Partners, Mitsui & Co. Venture
Partners (MCVP) and venture debt financing from Kreos Capital Limited and Silicon Valley Bank.
www.cappella-med.com
peerTransfer, a Boston-based provider of an online service that specializes in international
money transfers and payments, has raised $1.1 million from Spark Capital. Other backers
included Dave McClure, John Landry, Jim Hornthal. www.peertransfer.com
Buddy Media, a New York-based provider of social media software tools for advertisers, has
raised $5 million in new Series C funding from WPP. The investment is part of a larger strategic
partnership, and will be added to a recently-announced $23 million infusion. Investors on the
initial tranche included Institutional Venture Partners, Softbank Capital, Greycroft Partners and
Bay Partners. www.buddymedia.com
dPoint, a Vancouver, BC-based portfolio company of GreenAngel Energy Corporation has raised
$2.6 million. The proceeds will be used primarily for working capital and to expand sales and
R&D activities. www.dpoint.ca
Riptano Inc, the Austin-based startup that leverages Open Source database Apache
Cassandra, has closed $2.7 million in Series A financing. Investors include Lightspeed Venture
Partners, Sequoia Capital, and private investor Jason Calacanis. www.riptano.com

Private Equity Deals

The Carlyle Group, plans to invest $300 million into buyout deals in the Middle East and North
Africa in the next two years, and is specifically eyeing investments in Egypt and Morocco,
Reuters reported.
Syniverse Technologies, Florida-based telecommunications service provider, will be acquired
by The Carlyle Group in a $2.6 billion deal that will result in Syniverse becoming a private
company. The transaction is expected to close in the first quarter of 2011. www.syniverse.com
United Western Bancorp Inc., a Denver-based savings and loan, has agreed to a

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recapitalization plan that includes investments from Lovell Minnick Partners, Oak Hill Capital
Management and entities controlled by Ric Duques, the former chairman and CEO of First Data
Corp. Under terms of the deal, Lovell Minnick and Oak Hill each will purchase 117.5 million
shares of United Western common stock for $47 million, while Duques will buy 22.5 million
shares, or $9 million worth. The group will also receive 25.75 million warrants, exercisable at
$0.40 per share, for a term of 10 years. www.uwbancorp.com
Associated Diversified Services, a powerline construction and maintenance company based
in Hartselle, has received a strategic investment from Huntsman Gay Global Capital. Terms of
the deal werent disclosed. www.wearediversified.com
KOS, a provider of health services for the elderly, will recieve a 150 million euro ($208.9 million)
investment from AXA Private Equity. AXAs 41% stake at closing will rise incrementally over the
next three years to 47%. AXA Private Equity is a unit of AXA Investment Managers.
www.axaprivateequity.com
T&D Solutions, an Alexandria, LA-based utility service company backed by Huntsman Gay
Global Capital, has acquired E&R Inc. The current management team will remain in place and
retain a significant ownership stake in the company. Terms of the private transaction were not
disclosed. www.allcapcorp.com

PE-backed IPOs
First Wind Holdings Inc., a Newton, Mass.-based developer of wind power projects, pulled its
IPO after investor demand went soft. The company originally planned to sell 12 million common
shares at between $24 and $26 per share, and then lowered the range down to between $18
and $20. It originally filed for its IPO in 2008. Shareholders include D.E. Shaw and Madison
Dearborn Partners. www.firstwind.com
BankUnited, a failed U.S. bank sold last year to private equity firms by the FDIC, has filed for a
$300 million IPO. It plans to trade on the NYSE under ticker symbol BKU, with Morgan Stanley
and BoA Merrill Lynch serving as co-lead underwriters. Shareholders include shareholders
include The Blackstone Group, The Carlyle Group, Centerbridge Partners and WL Ross & Co.
www.bankunited.com

Exits
MailSouth, a Helena, Ala.-based provider of shared mail advertising for rural and suburban
markets, will be acquired by Court Square Capital Partners from New Mountain Capital. No
financial terms were disclosed. MailSouth was advised by Robert W. Baird & Co.
www.mailsouth.com

Other Deals
Lions Gate Entertainment Corp sued Carl Icahn on Thursday alleging the billionaire
interfered with its earlier efforts to merge with Metro-Goldwyn-Mayer and other studios, even as
the two now proceed with a joint effort to effect a merger with MGM.
http://news.yahoo.com/s/nm/20101029/media_nm/us_lionsgate_icahn
NTT Data Corp., a Tokyo-based IT consulting firm, has agreed to acquire Keane International
Inc., a Boston-based IT services firm owned by Citigroup Venture Capital. No financial terms
were disclosed. www.keane.com
Ember Resources, a Canadian natural resource company focused on coal-bed methane in

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Alberta, has hired Macquarie Capital Markets Canada to help review strategic alternatives, which
could include a sale of the company. Ember Resources has a market cap of approximately
C$25.8 million.
Stryker Corporation, a Kalamazoo, MI-based medical technology company, will acquire the
assets of the Neurovascular division of Boston Scientific for $1.5 billion. www.stryker.com
ZeniMax Media Inc, a Rockville, Md.-based based game developer, has acquired Tango
Gameworks. Financial terms of the acquisition were not disclosed. Shinji Mikami, the creator of
the Resident Evil series of video games will join ZeniMax as a result of the deal.
www.zenimax.com

Firms & Funds

Robeco, a Dutch asset management firm, aims to raise $500 million for investments in timber
and forestry, Reuters reported. The Dutch asset manager will launch its new fund next year,
and will invest in timber-focused private equity funds and in companies in the forestry market.
www.robeco.com

Moving In, Up and On

LinkedIn, the Mountain View, Calif.-based professional networking site, has appointed Stan
Meresman to its board of directors. In addition to LinkedIn, Meresman is a board member at
Riverbed Technology, Meru Networks and HyTrust. Previously, Meresman served on the boards
of directors at Polycom, VMware, Starfish Software and Lightsurf, as well as an advisor to Silicon
Image, Inktomi and Real Networks. www.linkedin.com

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