Good Tuesday Morning,
Daylight – Snapchat strikes back last night at Facebook Live with breaking news that it is acquiring mobile search app Vurb for $110 million (75 percent stock, 25 percent cash). The buzz is that Snapchat offered $75 million in bonuses stretched over five years to keep Vurb’s founder and CEO, Bobby Lo, on the payroll. Vurb won the New York 2014 Startup Battlefield competition with its methodology of “mobile search browsing,” rather than Google’s endless pages of search results. In reality, beyond winning business plan competitions, Vurb never gained mass traction, and it is why you see this deal heavily loaded in stock rather than a billion or so in cash. Most likely, Vurb will help Snapchat users collaborate and make multiple plans together like movie, dinner and hangout without ever leaving the Snapchat app. Thanks to our analyst, Mike Casey, who snuffed out this deal around 10 p.m. last evening.
Hot – Dropbox leaked out that they have met with advisors to discuss the possibility of going public in 2017. The word is that they wanted to get a sense of the valuation of the company, which was valued at $10 billion in the last round of financing. The strategy is highly likely that they wanted to raise awareness and interest from a potential buyer, a routine strategy now that you can “test the waters” for an IPO. A great conversation is for Microsoft to call and say something along the lines of – don’t go IPO……
Ruby Tuesday’s will close 100 stores, and they are not going to let the grass grow under their feet, as stores will be shut down by September. Soft in sales revenue is the big reason. The company is losing money instead of making money compared to last year when they had thin profits to show.
Culture – Great news – Coral Castles Reef, located between Hawaii and Fiji, has been brought back to life after being devastated by unusually warm water. A Massachusetts-based climate research team just finished the expedition and said, “Everything looked just magnificent.” First time we heard good news from climate scientists in a while, so we will leave it at that.
Buzzard’s Roost – The scoop here is that Lyft, theoretically the number two American ride hailing service, flat out rejected takeover interests from General Motors, its nine percent owner. GM paid $500 million dollars for the nine percent. The rumor offer is that GM offered $5 billion dollars for 90 percent interest. Going up against Uber, I predict Lyft will come back to that deal, but will GM be willing to step back up to the plate? It’s a huge gamble to say they will.
Spotlight – Had a great lunch yesterday with our Nashville member Dusty Barker. He and I discussed the new 30-minute commercial being produced with stars and singers for corporate brands. It’s more like a mini movie that has a plot and ending and lasts 30 minutes. Actors and singers use the products in the episode. Qualcomm released a 28-minute version with a well-known actor from the past and an up and comer singer and has had 20 million online hits. The mini movie, as a commercial, is the answer to the 30-second TV commercial and social media posting. I think it is a trend-line.
Private Equity – Call it a $2.25 billion dollar bet – Private equity group TPGagreed to buy two small call providers, RCN Telecom services and Grande Communication Networks. Both have telecom solutions for faster internet video connections.
Tuesday’s Waterfront View of Big Deals:
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M&A – Xylem Inc. is in talks to acquire Sensus USA Inc., a Raleigh, N.C.-based maker of smart meters for utilities.
Univision, nudging out Ziff Davis, reportedly has highest takeover offer for bankrupt Gawker Media, which bids ended yesterday at 5 p.m.
Advent International has agreed to acquire Fort Dearborn Co., an Elk Grove, Ill.-based provider of prime labels for the consumer goods industry, from KRG Capital Partners. Earlier media reports suggested an $800 million price-tag.
Aclara Technologies LLC, a Hazelwood, Mo.-based portfolio company of Sun Capital Partners, has acquired the smart grid business of Tollgrade Communications Inc., a Cranberry Township, Penn.-based portfolio company of Golden Gate Capital.
Exits – InterHealth Nutraceuticals, a Benicia, Calif.-based maker of nutritional ingredients for makers of dietary supplements and functional foods, sold to Lonza Group. The deal is valued at upwards of $300 million.
The Robbins Co., a Solon, Ohio-based maker of underground excavation construction machinery for tunnel boring projects, sold to North Heavy Industries Group Co. of China.
Venture Capital – Zenoti, a Mercer Island, Wash.-based provider of a cloud-based management platform for the spa and salon markets, has raised $15 million.
Firefly Games, a Los Angeles-based startup that aims to distribute top-grossing Asian mobile games to Western markets, has raised $8 million in new VC funding.
Expa Capital, the San Francisco startup studio led by Uber Co-Founder and Chairman Garrett Camp, is raising upwards of $100 million for its second fund.
Investment Banking – The Carlyle Group has agreed to acquire NetMotion Wireless Inc., a Seattle-based provider of mobile security software, from Clearlake Capital Group.
Oncap has agreed to acquire Tecta America Corp., a provider of commercial roofing services, from Oaktree Capital Management. The deal is valued at $280 million.
And that’s what’s ahead, Cliff
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