BLP’s Rearview Mirror: Week Ending February 2nd

The Market, IPOs, Mergers & Acquisitions, Private Placements

What’s Happenin’?

Week Ending February 2, 2014

Source:  eric.cathas.tumbl;r.com
Source: eric.cathas.tumbl;r.com

This whole blog could be on the state of the markets, or this week in earnings, or the latest in M&A or what ‘s going on in private placements.  Maybe I should break up the Rearview Mirror into these components?  The current format does make for a lengthy blog.

Which portions of the blog do you like, and which could you do without?  Are you interested in more, shorter blogs?

Please let me know:  mjohns@bluelakepartners.com.

The Market[1]

One might call it a swoon:  You had the meltdown in the emerging-market currencies, led by Turkey, the downbeat job report, disappointing housing reports and weak durable-goods data.  Still, we expect the Fed to march forward with its tapering.

Admittedly, Turkey’s central bank did a bit more than “tweak” interest rates.  The benchmark one-week lending rate for banks increased to 10 percent from 4.6 percent; the primary lending rate rose from 7.75 percent to 12 percent.   Pretty stunning.  I’d be shocked, too.

In turn, the Dow is down 4.5 percent for the month.  What the lord giveth, he taketh away.

Apple’s (AAPL:  Nasdaq) sales came in flat at $13.1b, year over year.  Profits were $14.50 vs. $13.86 per share, year over year.

Amazon (AMZN:  Nasdaq) disappointed.  Growth was great, but earnings, at $239m or $0.51 vs a year earlier $97m or $0.21 were below expectations of $0.74.  Could Jeff Bezos care?  We think not.  He has his own plan.

Chipotle (CMG:  NYSE) was another winner, increasing the profit to $79.6m or $2.53 per share from $61.4m or $1.95 per share.  Revenue rose 21 percent to $844.1m.

Electronic Arts (EA:  Nasdaq) saw profit of $1.26 per share from $0.57 a year ago, but threw cold water on its outlook going forward, lowering estimates for the next quarter, and revenue for the year to $3.52b from $3.55b.

Google (GOOG:  Nasdaq) came in at a profit of $3.38b or $9.90 per share vs $2.89b or $8.62 per share a year earlier. Adjusted revenue totaled $13.55b vs. 11.34b a year ago.  Google, founded in late 1998, keeps on rolling forward.

Yahoo’s (YHOO:  Nasdaq) quarter had the old story of up profits and down revenues.  Profits roase to $352m or $0.33 vs. $274m or $0.23.  Revenues edged down to $1.20b from $1.22b.

Zynga (ZNGA:  Nasdaq) announced an acquisition and a 15 percent layoff, with sales at $176m vs. $311m a year ago.

IPOs[2]

Click on the stock symbol to see the IPO prospectus, and the company name to go to its website.

Biotech IPOs

This was the week of the biotech IPO:

Cara Therapeutics  (CARA:  Nasdaq)  sold 5.0m shares at $11 per share, raising $55m and was valued at $240m.  The stock closed the week at $12.91 per share.  Cara is a clinical stage biopharmaceutical company focused on developing and commercializing new chemical entities designed to alleviate pain without many of the undesirable side effects associated with current pain therapeutics.

Celladon  (CLDN:  Nasdaq) sold 5.5m shares at $8 per share, raising $44m at a valuation of $137m.  The stock closed the week at $8.47 per share.  Celladon is a clinical-stage biotechnology company in the field of calcium dysregulations by targeting SERCA enzymes to develop novel therapies for certain diseases.

Dicerna Pharmaceuticals  (DRNA:  Nasdaq) sold 6m shares at $15.00 per share, raising $90m at a valuation of $249m.  The stock closed the week at $41.12, a 174 percent gain. Dicerna is focused on the discovery and development of innovative treatments for rare inherited diseases for the liver and for cancers that are genetically defined.  That’s one company where I wish I were a “friend of the firm.”   Did I say “flip?”  No, you must have misheard me.

Trevena  (TRVN:  Nasdaq) sold 9.3m shares at $7.00 per share raising $65.10m and was valued at.  The stock closed the week at $6.50 per share.  Trevena is a clinical stage biopharmaceutical company that intends to commercialize therapeutics that use a novel approach to target G protein coupled receptors, or GPCR’s.  The first potential product is focused on treating Acute Heart Failure.

Ultragenyx (RARE:  Nasdaq)  sold 5.8m shares at $21.00 per share, raising $121.8m and was valued at $591m.  The stock closed the week at $42.25 per share.  Ultragenyx is a biopharmaceutical company focused on the treatment of rare and ultra-rare diseases.   The initial focus is serious, debilitating metabolic genetic diseases.

Financial Engineering IPOs

Intrawest Resort Holdings (SNOW:  NYSE)  Intrawest sold 15.6m shares at $12 per share, raising $187.2m and was valued at $540m.  The original range was $15 to $17 per share.  The stock closed the week at $11.90.  Intrawest’s ski regions are in the Eastern United States, the Rockies, the Pacific Southwest and Canada.  It owns, or has ownership interests, in Steamboat Springs, Winter Park, Tremblant, Stratton, Snowshoe (West Virginia) Blue Mountain (Ontario) and Mammoth Mountain.

Malibu Boats  (MBUU:  Nasdaq) sold 7.1m shares at $14 per share raising $99.4m and was valued at $314m.  The stock closed the week at $17.75.  Malibu Boats is a designer, manufacturer and marketer of performance sport boats, being the market share leader in the United States since 2010.  The boats are used for water sports, including water skiing, wake boarding and wake surfing.

The New Home Company (NWHM:  NYSE) sold 7.8m shares at $11 per share, raising $85.8m and was valued at $181m.  The stock closed the week at $12.20 per share.  New Home’s business strategy is based on the construction of new homes in planned communities in major metropolitan areas in Coastal Southern California, the San Francisco Bay area, and metro Sacramento.

Mergers & Acquisitions[3]

To read the acquisitions announcement or description of the transaction, click on highlighted text.  If there is a second link, it will provide further description of the company or deal in question.

The deal of the week was Google’s flip of Motorola Mobility to Lenovo, after owning the company for 17 months.

Mobile

Motorola Mobility acquired by Lenovo for $2.9b.  While this may look like a huge loss, after buying the Company for $12.5b, Google actually did quite well.  When Google acquired Motorola, they inherited cash of $3.2b, and deferred tax assets of $2.4b.  Google then sold the set-top box business to Arris Group for $2.3b and its factories to Flextronics for $75m.  At the end of the day, Google spent less than a billion dollars for patents originally valued at $5.5b.  Even after accounting for the $2b in operating losses, Google had a profit of $3b on the deal.[4]

U.K. based NaturalMotion, creator of the CSR racing game, is to be acquired by Zynga for $527m

Berlin startup, Skobbler which creates apps and smart map technology, is to be acquired by Telenav for $24m.

App-maker Tomfoolery is being acquired by Yahoo! for $16m.  TomFoolery makes apps that improve collaboration and communication in the workplace.

Financial

PayPros is to be acquired by Global Payments for $420m.

Miscellaneous Software

LoopFuse acquired by SalesFusion.  Both Loopfuse and SalesFusion are in marketing automation and lead management.

DeepMind Technologies is being acquired by Google.  Sources with Re/Code report that the transaction was valued at around $400m.  DeepMind claims to combine the best techniques from machine learning with systems neuroscience to build powerful general-purpose learning algorithms.

Content recommendations firm, Digitalsmiths, is being acquired by TiVo for $135m.

Private Placements[3]

Retail

One Kings Lane raised $112m in a Series E round.

Oakland and Brooklyn-based specialty coffee roaster Blue Bottle Coffee raised a $26m Series B round.  You can visit a store in New York City or San Francisco, or become a subscriber at $17 per month.  I must admit to be scratching my head as to why Google Ventures invested in the company, along with Matt Mullenweg, founder of WordPress, and Evan Williams, founder of Twitter among other tech-elites.   Admittedly, they have a nice story-line, in how the Polish Army drove the turks out of Vienna in the 1600’s.    Apparently, it’s a Polish man, Kolshitsky [Dad would be proud], to whom we should thank for bringing coffee to the Western world.

Dafiti, a fashion ecommerce startup focused on Latin America, raised a $15m round.

Lamoda,  the Russian online fashion site incubated by the Samwer Brothers, raised $10m EUR.

Social

Indiegogo, an international crowdfunding platform, raised a $40m Series B round.

Evan Williams startup, Medium, raised $25m.  Medium is a publishing tool that’s somewhere between Twitter and a blog.   William’s incubator, The Obvious Corporation originally funded the Company.  Medium.com is an interesting and provocative site.

Systems/Enterprise

Ensighten raised a $40m Series B round.  Ensighten develops Real-Time™ Tag Management solutions.  The goal is to increase website performance, increase marketing effectiveness and ensure privacy compliance

Waltham-based CloudLock announced that it has raised a $16.5m Series C round.  CloudLock is touting applications that bring security to your employees’ use of cloud products, including GeoFence for Google Apps, CloudLock for Salesforce  and Apps Firewall.

Autogrid raised a $13m Series C round.  By mining operational trends and consumption patterns, AutoGrid’s Energy Data Platform can forecast demand days, minutes or even seconds in advance.

BlueCava, which acts as a catalyst for companies trying to make the transition cross-screen, from PC’s to tablets to smartphones, raised $13m.

Cotap, a texting service for co-workers, raised a $10m Series B round.

Healthcare

Health Catalyst raised a $41m Series C round.  Health Catalyst is a leader in healthcare analytics and data warehousing.

It’s Superbowl Sunday, and my husband and step-daughter are on their way back from a swim coaching session at Bowdoin College.  Time to wrap up the blog, walk the pugs, and get out the nachos and margaritas.

That’s all for this week.

All the best,

Margaret Johns

Founder & Chairman

We love to hear your opinions and comments at mjohns@bluelakepartners.com.

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Content researched, edited and reviewed on a best efforts basis.

We make no claim to being comprehensive in our review, as the contents are companies and topics we, ourselves, find of interest.

This newsletter is currently being proofed by Dave Henshaw, which is much appreciated. Dave is my USMS swimming lane mate, and Granite State Penguin team-mate.  He is retired from MIT, where he used to produce and proof their annual financial report.  Exactly what we need.


[1] Wall Street Journal

[2]Certain information provided by Renaissance Capital, in addition to the SEC and numerous business publications

[3] Certain information from TechCrunch, SEC documents, company websites and other news sources.

[4] Forbes