Rearview Mirror: Week Ending March 16th, 2014

The Market, IPOs, Mergers & Acquisitions, Private Placements

What’s Happenin’?

Week Ending March 16th, 2014 

 

swimmer blueI’m fresh off the 1650 (“swimmers mile”) at the New England SCY [SC” for short course, which is a 25 yard pool, and “Y” for yards] Masters Championships at Harvard, and totally sore.  Every muscle.  Saturday was “distance day” with the 1,000 and 1650.  This coming Friday, Saturday and Sunday are the regular events, where I’m swimming breaststroke, IM and the 500 free.  At least, the events are grouped so that they are Friday and then mornings on Saturday and Sunday.  I thought I’d given all this up when I graduated from Age Group Swimming.  Now I’ve discovered that one never, ever graduates.

 

 

Source:  CreativeInfrastructure.org
Source: CreativeInfrastructure.org

Events:

I’ll be judging the New Venture Program Finals for the Harvard Business School of Boston this Tuesday on the HBS campus from 5pm to 9pm.  If you have an interest in attending, let me know and I’ll put you on the guest list.  The four company finalists run the gamut from media to software to medical/biotech and are companies founded by HBS alums who’ve been in the working world.  Guaranteed to be interesting.

The Market/Earnings[1]

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

The week started out with concern about new stock market highs and lofty multiples and and ended the week wondering if we were in a long term downdraft.  On Thursday the S&P index fell 1.2 percent.  Now, lots of talk, once again, about going below the S&P Index resistance level of 1834.

On the earnings side of life, Ulta (ULTA:  Nasdaq) had good news and Aeropostale (ARO:  Nasdaq) didn’t.  Ulta’s earnings came in up nine percent at $1.09 per share, with sales increasing 14.4 percent to $868m and net income at $70.7m.    Aeropostale’s sales decreased 16 percent [Ouch!  Those fickle teens] to $670m and a net loss of $70.3m or $0.90 per share.

International news is in the headlines with the talk about the U.S. not shipping arms to the Ukraine and the missing Malaysia Airliner.  Gotta tell you, that missing Boeing 777-200 has me completely spooked.  My stepson works for Raytheon and has gone back and forth several times to Malaysia to teach the operations of friend or foe radar systems.  He’s moved on to Saudi Arabia, thank goodness.

IPOs[2]

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

GE is taking it’s credit card business public as Synchrony Financial, and is the largest US issuer of credit cards in the names of retailer and other partners., including JC Pennery, Wal-Mart and Lowe’s.  No filings yet, though.

Five IPO’s, all in the health care area:

Castlight Health (CSLT:  Nasdaq) sold 11.1 million shares at $16 per share, raising $178m at a valuation of $1.385b.  The stock closed the week at $39.50 per share.  Castlight’s mission is to “dramatically improve the efficiency of the U.S. health care industry by unleashing the power of market forces through greater transparency and better alignment of economic incentives among employers, health care consumers and their providers.”[3]

Ignyta (RXDX:  Nasdaq) sold 5.2m shares at $9.15 per share raising $47.6m at a valuation of $168m.  The Company closed the week at $10.20 per share.

“Ignyta is a precision medicine biotechnology company dedicated to discovering or acquiring, then developing and commercializing, precisely targeted new drugs for cancer patients whose tumors harbor specific molecular alterations. We are pursuing an integrated drug and diagnostic, or Rx/Dx, strategy, where we anticipate pairing each of our product candidates with biomarker-based companion diagnostics, developed by us or by third parties with which we may partner, that are designed to identify the patients that are most likely to benefit from the use of the drugs we may develop.”[4]

Dipexium (DPRX:  Nasdaq) sold 2.8m shares at $12 per share for a total of $34m at a valuation of $92m.  Dipexium is a “late stage pharmaceutical company focused on the development and commercialization of Locilex™ (pexiganan acetate cream 1%), a novel, first-in-class, broad spectrum, topical antibiotic.”[5]  The stock closed the week at $13.40 per share.

Galmed (GLMD:  Nasdaq) sold 2.8m shares at $13.50 per share raising $37.8m at a valuation of $137.5m.  The stock closed the week at $14.65 per share.  Galmed is a “clinical-stage biopharmaceutical company focused on the development and commercialization of a novel, once-daily, oral therapy for the treatment of liver diseases and cholesterol gallstones utilizing our proprietary first-in-class family of synthetic fatty-acid/bile-acid conjugates, or FABACs.”[6]

Achaogen (AKAO:  Nasdaq) sold 4.2m shares at $11.00 per share raising $46.2m at a valuation of $189m.  Achaogen is a clinical-stage biopharmaceutical company passionately committed to the discovery, development, and commercialization of novel antibacterials to treat multi-drug resistant, or MDR, gram-negative infections.[7]

Mergers & Acquisitions[8]

(5 transactions noted)

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

Retailing

Jos. A Bank is being acquired by the Men’s Wearhouse for $1.8b.

Education

Education analysis company, Renaissance Learning, a Google Ventures portfolio company, is being acquired by Hellman & Friedman for $1.1b.

Enterprise

Enterprise information security company, Accuvant, is being acquired by the Blackstone Group for $225m

Dallas data center provider, CoreXchange, is being acquired by zColo for $17m

Media

Digital broadcasting company, Internet Broadcasting, is being acquired by Nexstar Broadcasting Group for $20m.

Ad targeting firm, Qlika, is being acquried by Priceline for $3.0m.

Gaming

Green Throttle Games is being acquired by Google.

Social

Opt-in social data provider for businesses, Authintic, is being acquired by 500px

Private Placements[9]

(19 transactions noted that were also over $10m)

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

Finance

WorldRemit, an online money transfer business, raised a $40m Series A round.  [Another money transfer platform is Azimo, noted in the UK section.

Bitcoin holders can now breath easy, Xapo has arrived and raised a $20m Series A round.   Xapo combines the “convenience of an everyday wallet and the security of a cold storage vault.” [10] The Company is incorporated in Hong Kong and based in Palo Alto.

Credit Karma raised an $85m Series C round.  Credit Karma provides the consumer with a free credit score and then provides personalized offers of products and services offers commensurate with the credit score.

Real-time economic data tracking platform, Premise, raised an $11m Series B round.  We’re wondering how much the “Premise” url cost the company.

YeahMobi, “its predecessor being NDP media CORP established in 2009 in the United States, is the leading domestic platform that is dedicated to overseas mobile internet sources integration and promotion,”[11] raised a $15m Series A round.

Entrerprise

MuleSoft raised a $50m round.  “Mulesoft provides the most widely used integration platform for connecting SaaS and enterprise applications in the cloud and on-premise.”[12]

Social

Eventbrite, the global online event ticket facilitator, raised a $50m round.

Las Vegas startup, Banjo raised a $16m Series B round “to become something like a TiVo for interesting social media conversations and content around the world.”[13]

Seattle-based, Rover.com, which is creating a community for dog lovers to connect owners and sitters for home dog stays, raised a $12m Series C round.

Education

BrightBytes, ‘which tries to measure the effectiveness of spending on programs and technology on student learning,”[14] raised a $15m Series B round.

Smart Sparrow, an adaptive learning platform for teachers, raised a $10m Series B round.

Media

Layer3 TV, a next generation cable provider, raised a $21m Series A round.  It’s a “top secret” company being bankrolled by North Bridge Venture Partners and a venture capital off-shoot of CAA.  The Company will provide live TV and on demand programming.  Whatever else is anyone’s guess.  Anything that provides competition to cable monopolies is welcome.

A bit over a year ago, Comcast raised our cable and internet bill to $180, which was just way too much for how much we didn’t watch TV.  I had done a canvas of some colleagues and found that they had snip-snipped a while ago.  However, they are in the Boston suburbs, so can get multiple channels over-the-air.  One year later, we’re doing fine with one New Hampshire TV channel, Apple TV, and our pre-existing Netflix and HuluPlus subscriptions.   My next step was to upgrade our cable modem for $82 and get rid of our $7 per month lower quality Comcast cable modem rental.

L2 Think Tank, a “subscription-based business intelligence service that benchmarks the digital competence of brands”[15], raised a $16m round.

UK

Synthesio, whose mission is to “fuel the world’s leading brands with the valuable insights they need to improve communications, create better products and make happier customers, raised a $14m EUR round.  The company has offices in the United States and the United Kingdom.

UK-based, Azimo, raised a $10m Series A round.  Azimo is a global money transfer company.

Israel

Israeli-based Cortica raised a $20m Series C round.  The Company ”automatically extracts the core concepts in images and video and maps these concepts to keywords and textual taxonomies.”[16]

China

Chinese online visa and travel service, ByeCity, raised a $20m Series B round from Alibaba.

Chinese online food ordering and delivery service, Meican, raised a $10m Series B round.

India

On-line Craigs list look alike, Quikr, based in India, raised a $90m Series F round.

Have a great weekend, and wish me luck at New England Regionals.

All the best,

Margaret Johns

Founder & Managing Director

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

If you find this newsletter informative and interesting, please share.

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.


[1] WSJ Moneybeat, Mar 10-14, 2014

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

[3] Castlight S-1 filing

[4] Ignyta S-1 filing

[5] Dipexium S-1 filing

[6] Galmed S-1 filing

[7] Achaogen S-1 filing

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

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

[10] Xapo website

[11] YeahMobi website

[12] Mulesoft website

[13]WSJ, March 13, 2014

[14] Re/code, March 12, 2014

[15] L2 Think Tank website

[16] Cortica website