Rearview Mirror: Week Ending February 16th

The Market, IPOs, Mergers & Acquisitions, Private Placements

What’s Happenin’?

Week Ending February 16, 2014

cafeauplay.org
cafeauplay.org

How many ways do the Eskimos have of saying “snow?”  Technically, about the same as us.[1]  We, in the Northeast, are being bludgeoned by snow storms, with another one due on Tuesday.  It’s almost impossible to make a turn—left or right—due to the immense snow banks on every corner.  I would be on my way to Phoenix, and take advantage of a friend’s invitation, were it not for Tuesday’s anti-money laundering (“AML”) audit and BLPA’s financial audit which is due at FINRA at the end of this month.  Grind, grind!

The Market[1]

Click on the Company Name for the earnings announcement, and the Company Symbol for the stock chart.

What a difference a week makes.  Last week we were talking about a potential correction and this week we’re hitting new highs.  Go figure.  According the the American Association of Individual Investors’ weekly gauge of sentiment, the bullish sentiment jumped from 27 to 40 percent and the bearish sentiment fell from 36 to 27 percent.

The S&P 500 has bounced back and is off only one percent YTD, while the tech-heavy Nasdaq Composite turned higher for the year.

It was a huge earnings week in terms of reporting companies, but no real news.  Make that, no real “bad” news.  Otherwise the market would have collapsed.  The macro news from the Fed and the uptick in Chinese manufacturing was more important than any one company’s earnings.

Cisco (CSCO:  Nasdaq)  announced sales and earnings with an eight percent decrease YOY in sales, with down gross margins.  Revenue was $12.2b, down eight percent, and earnings were $1.4b, down 54.5 percent.  Pretty ugly.  Silver linings: The data center business was up 10 percent to $605m, which seemed to be the highlight of the earnings call.  Services were $2.73 billion, up 3 percent.  Heard from “SwingTrader2012” on Twitter: “Maybe the NSA Inside stickers on the [CSCO] routers is a negative on $CSCO!”  Probably is.

IPOs[2]

Click on the Company Name for the S-1 filing and the Company Symbol for the stock chart.

There were eight IPO’s this week:  six in the medical/devices/biotech area, one insulation building products company and one commercial bank. This was a repeat of last week.  Nothing really interesting, with lots of smaller deals, and no tech companies.

Inogen (INGN:  Nasdaq) makes portable oxygen concentrators for patients with chronic respiratory conditions.  The Company sold 4.4m shares at $16 per share, raising $70m at a valuation of $288m.  The stock closed down for the week at $15.15.

Amedica (AMDA:  Nasdaq) sells a family of silicon nitride spinal fusion devices and a line of non-silicon nitride spinal products to promote bone growth, as well as products for total knee and total hip replacement.  The Company sold 3.5m shares at $5.75 per share for a total of $20m at a valuation of $70m.  The stock closed the week at $5.68 per share.

NephroGenex (NRX:  Nasdaq) is a pharmaceutical company focused on the development of therapeutics to treat kidney disease.   The Company sold 3.8m shares at $12 per share, raising $37m at a valuation of $106m.  [micro stock] The stock closed the week at $11.90 per share.

Other Pharma

Concert Pharmaceuticals (CNCE:  Nasdaq)

Eagle Pharmaceutical (EGRX:  Nasdaq)

Flexion Therapeutics (FLXN:  Nasdaq)

Other

Installed Building Products (IBP:  NYSE)

Talmer Bancorp (TLMR:  Nasdaq)

Mergers & Acquisitions[3]

Click on the highlighted phrase for the Company’s M&A announcement. 

Other than the mega cable deal, it was the week of Israeli and security companies.

Cable

The big deal of the week is Comcast’s potential acquisition of Time Warner Cable for $45.2b. Can you say FTC, FCC, Net Neutrality and higher internet and cable charges?  Surprise, surprise:  Comcast’s website claims this deal is ”pro-consumer, pro-competitive and benefits small and medium-sized businesses.”  Which is quite contrary to all the other press.  Shocking?!

Apps

Viber Media, based in Cypress and run by Israeli entrepreneur Talmon Marco, is being acquired  by Japanese e-commerce giant Rakuten for $900m.  Viber Media is a call and messaging app. Viber Media is reputed to have 300m users to Rakuten’s 200m.

New York-based social diary app maker Wander is being acquired by Yahoo!  The price for Days (the app) is reputed to be over $10m.

Israeli Security Companies

Israeli Cyvera, focused on cyber defense products, is being acquired by Palo Alto Networks for $150m.

Israeli cloud-based security firm, SkyFence, is being acquired by California-based security firm, Imperva, for $60m.  Schlomo Kramer, the CEO of Imperva has an interest in SkyFence.

Software

ForwardThink Group acquired by Perficient for $46m.  Both companies are IT consulting organizations.

Digital video technology company SET Media is being acquired by Conversant Media, a leader in personalized digital marketing, for $31m.

Technical recruiting software startup Distill is being acquired by Yahoo!

UK-based Livedrive, an on-line backup service with added file sync, is being acquired by J2 Global Communications.  I don’t know about you, but my experience with J2 has not been overly positive.  I once had an eFax monthly subscription that was one of those Hotel California experiences.  You can enter but you can never leave.  Just try to get a customer service agent on the phone—the only method of canceling—not!

Pharma

Cadence Pharmaceutical acquired by Mallinckrodt for $1.3b.  Cadence Pharma develops biotech drugs for use in hospital settings.

Private Placements[3]

Click on the Company name of the website or deal information.

My favorite deals were RiseSmart, an online outplacement site focused on individuals, and curious.com, a “learn anything” website.

Systems

Tintri, which focuses on storage for virtual environments, helps IT organizations eliminate storage complexity and minimize costs for their virtualized environments, raised a $75m Series E round.

CloudPassage, with its “HaloⓇ product which delivers cloud-ready security and compliance automation, raised a $26m Series C round.

Splice Machine, a real-time SQL on-Hadoop database, raised a $15m Series B round.

Data center enterprise software developer, Primary Data, raised a $10m Series B round.

Applications

Kaltura, which provides an open source video platform, raised $47m.  The solution provides media management solutions, and a framework for developing customized video solutions.

Avalara, a sales tax automation company for the SMB environment, raised $30m.  Believe it or not, this is a very important, complex problem.

PlaceIQ, which has a suite of consumer discovery, engagement and activation solutions, raised a $15m Series C round.

RiseSmart, an “enterprise career management” company, raised $11m.  As I understand it, RiseSmart is for the individual worker who needs or wants to find their next position.  Or the employer who wants to provide a relatively inexpensive outplacement solution.

Social

joynme.com, a social activity network, raised a $22m Series B round.  JoynMe uses your existing networks to enable participation in your favorite activities with friends and new people nearby.

Welltok, a leader in integrated social health management raised $22m.  Welltok provides CaféWell as an integrated platform for  payers, health systems, ACOs and other population health managers, to manage their health improvement programs.

Medical

Guardant Health, which sequences your current cancer using tumor derived DNA in the blood, raised $10m.  Guardant produces a report of actionable genetic alterations and the associated treatments.  The end result is the ability to personalize treatment options for a person’s specific type of cancer at its specific point of evolution.  Now, this is a company I’d be interested in marketing.

Miramar Labs, which is focused on addressing dermatologic medical conditions for which there are significant unmet clinical needs, raised $10m.  The first solution is for excessive underarm sweat.

Learning

curious.com, which provides a platform for learning or teaching just about anything, raised a $15m Series B round.

Russia

China snowman
Source: www.murderati.com

aviasales.ru, the largest Russian travel search engine, raised $10m.

Intel Capital invested $10m in Mango Telecom, a Russian provider of SaaS solutions for business communications.  Mango Telecom provides hosted PXB, CRM and a calls processing center.

China

Cheyipai, a Chinese second-hand car trading platform, raised $50m.

Keep safe, keep warm.

Margaret Johns

Founder & Managing Director

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

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Margaret Johns is the Founder and Chairman of BlueLake Partners, a boutique M&A investment bank based in the Greater Boston Area.  Prior to founding BlueLake she was an employee founder and Managing Director at Needham & Company where she worked in Corporate Finance in New York City and headed up its Boston office.  She now lives in Londonderry, New Hampshire with her husband, 16 year old step-daughter and three pugs.  When she’s not working with clients, FINRA or writing blogs she competes on the Granite State Penguins Masters Swim Team, skis, rides her bike or is out walking her pugs.

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 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.


[2] WSJ Moneybeat, Feb 10-14, 2014

[3] Certain information from Renaissance Capital, in addition to the SEC, nasdaq.com, and other sources.

[4] TechCrunch, Company websites and other news media.

[5] TechCrunch, Company websites, other news media.