NBK CAPITAL Fund II raises $310 mln

NBK Capital said Monday it closed its latest private equity fund with US$310 million in capital commitments. NBK Capital Equity Partners Fund II was oversubscribed and exceeded its US$300 million target. Dubai-based NBK Capital focuses on growth investments in middle market companies in the MENA region specifically in the GCC and Turkey. PRESS RELEASE Dubai – 20/10/14: NBK Capital announced today that it has successfully closed its latest private equity fund, NBK Capital Equity Partners Fund II, with US$310 million in capital commitments. The fund was oversubscribed and exceeded its US$300 million target, driven by strong demand from institutional investors and family offices. The fund will continue the firm’s successful investment strategy of acquiring stakes in middle market companies across the MENA region. Amjad Ahmad, Senior Managing Director and Head of Alternative Investments at NBK Capital commented, “We will continue to focus on middle market private equity investments where we believe there are significant opportunities to drive value and returns. Our team’s intense focus on developing and growing companies will continue to be a key factor in delivering strong returns for investors.” The management team has implemented an effective hands-on investment approach to drive growth and efficiency in companies primarily in consumer sectors such as consumer staples, consumer discretionary, education and healthcare. The team’s track record has been one of the most consistent in the region achieving top quartile returns for their first fund relative to global and emerging market comparable funds during the same period. NBK Capital Equity Partners Fund II has already invested in two companies: Shakespeare and Co., a popular casual dining restaurant chain based in the UAE and Yatsan, a leading mattress manufacturer and retailer based in Turkey. The team is completing the third investment and there are several other investments in various stages of development. About NBK Capital Equity Partners Fund II L.P. NBK Capital Equity Partners Fund II L.P., a Cayman Islands based private equity fund placed through the firm’s subsidiary in the DIFC, is managed by NBK Capital Alternative Investments Group which focuses on growth investments in middle market companies in the MENA region specifically in the GCC and Turkey. The group specializes in an active investment approach to create long-term sustainable value through financial, strategic, operating and corporate governance enhancements. About NBK Capital Alternative Investments Group NBK Capital has been a leader in alternative investments in the MENA region since its launch in 2005 raising US$720 million from institutional investors and family offices. The firm successfully launched its inaugural private equity fund in 2007, NBK Capital Equity Partners Fund I, followed by the region’s first credit fund in 2009, NBK Capital Mezzanine Fund I. The firm is focused on growth investments in middle market companies operating in the MENA region specifically in the GCC and Turkey. Today, the firm boasts an investment platform with an experienced team of 20 professionals operating from Dubai, Kuwait and Istanbul.

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NBK CAPITAL Fund II raises $310 mln

Hot deal! Francisco gets bids of $400M for eFront: sources

Francisco Partners‘ auction of financial software company eFront has attracted offers of around $400 million, according to two people familiar with the transaction. Francisco is seeking bids of 7x revenue for Paris-based eFront, the sources said. American Banker has estimated eFront had sales of $59 million in 2013, which would put Francisco’s asking price at $413 million. First-round bids were due last week for the auction, which is being handled by Barclays, the sources said. Bidders included private equity firms as well as one strategic, Markit, a third source said. Francisco Partners acquired a majority stake in eFront In September 2011, according to a statement from that time. The whole company was valued at 68 million Euros (US$88 million), the statement said. Bloomberg News reported last month that Francisco Partners was preparing to exit eFront either through an IPO or sale. Strategic buyers potentially interested in the company include Markit, SS&C Technologies Holdings, Broadridge Financial Solutions and Nasdaq, Bloomberg said. With offices in San Francisco and London, Francisco Partners invests in sectors such as software, security and healthcare IT. The firm’s last fund, Francisco Partners III L.P., closed at $2 billion in February 2011. That fund generated a net IRR of 18.2 percent and a 1.3x investment multiple as of March 31, according to CalPERS, an investor in the fund. Francisco Partners declined comment. Executives for eFront and Markit couldn’t be reached for comment. Photo courtesy of Shutterstock

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Hot deal! Francisco gets bids of $400M for eFront: sources

Fresenius, buyout groups eye Danone Medical Nutrition unit, say sources-Reuters

(Reuters) – German healthcare group Fresenius (FREG.DE) as well as buyout groups PAI and Permira are exploring an acquisition of the medical nutrition business of Danone (DANO.PA) after efforts of U.S. drugmaker Hospira (HSP.N) to buy the unit failed, people familiar with the matter said. The business, which sells products to feed people that are ill, may reap a valuation of 4 to 5 billion euros (6.38 billion US dollar), money that the French group could use for a potential acquisition of U.S. baby formula maker Mead Johnson Nutrition Group (MJN.N), sources familiar with the matter told Reuters. Danone, Fresenius, PAI and Permira declined to comment. Fresenius had been interested in the business earlier this year but pulled out after it deemed the asking price too high, the sources said. They added that Fresenius has renewed its interest after Danone’s talks with Hospira stalled amid rising criticism in the United States about American companies relocating abroad to cut their tax bills. Given the complexity of the deal any signing is likely still months away, they added. Fresenius, whose FMC (FMEG.DE) arm is also active in dialysis services (FMEG.DE), has its own medical nutrition unit called Kabi and for antitrust reasons would likely divest some of the acquired assets after a deal, the people said. PAI, whose chairman Lionel Zinsou-Derlin sits on Danone’s board, is one of Europe’s largest food investors with a portfolio that includes snack maker United Biscuits and ice cream group R&R. “PAI would do any deal (to buy Danone Medical Nutrition) together with co-investors,” a person familiar with the process said. Permira, which also has several food and health-related investments, is also interested the business, two people familiar with the transaction said. Reuters first reported in February that Danone, the world’s biggest yogurt maker, was considering selling the business – even though it has a profit margin above the group average.

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Fresenius, buyout groups eye Danone Medical Nutrition unit, say sources-Reuters

VCs get smart on edtech: VCJ

Here is a startling statistic. As of mid-August, venture capitalists have invested more than $977 million worldwide in education startups year-to-date. Startling because it is well above the $842 million for all of last year and likely by year’s end the figure will exceed the $1.05 billion invested in the sector in 2012, based on data from Thomson Reuters and news reports. Remarkable as well because so far edtech hasn’t proven itself. The space is a bit like cleantech. Only a relatively few companies have scaled to market leaders and fewer still found attractive exits, though the exit pace seems to be improving. So how can capital climb when returns remain lackluster? It boils down to this: There is a growing belief the landscape is changing. Education has been a fragmented market and schools notoriously are difficult to sell to. Edtech investing means following a long-term strategy. But VCs appear to have a growing conviction disruption is coming quickly and in a big way. “If you think about the reinvention of learning, be it through the unbundling of the classroom, be it through the creation of new schools, be it through the creation of new disciplines, then this is huge,” said Renata Streit Quintini, a general partner at Felicis Ventures, who is voicing a common belief among investors. “The gap between the old education model and what people are interested in—the skills for the modern world—is a big gap. People are reinventing schools. That is a really big opportunity.” This expected dislocation plays well into venture’s hands. The tools that will remake education are tools VCs know well: SaaS software, cloud computing, online media, mobile distribution, big data analytics and social networks. As more computers, iPads and smartphones enter the classroom, software and content distribution becomes easier. As cloud becomes more ubiquitous, old infrastructure is swept away and a consummerization of education is likely to unfold as it is in the enterprise. One can even imagine the Oculus goggles turning into educational tools. What’s encouraging is that school districts finally appear to be showing greater interest in new technology. Education has been a laggard in its adoption and it has not yet driven down costs. But schools have recovered from the 2008 economic downswing and have dedicated budgets for new purchases with buyers more accepting of the change it will bring. Entrepreneurs see this and are responding with a greater supply of investment opportunities. “We’re seeing a general increase in interest in the sector and more fundable opportunities, for sure,” said Mitchell Kapor, a partner at the seed-stage social-impact investor Kapor Capital. All this is changing the way investors think about edtech. A couple of years ago, excitement over the prospects of massive open online courses, or MOOCs, led firms that once shunned the space to begin putting money to work in search of the iTunes of education. Now a greater pragmatism is settling in. Investors are looking more thoughtfully at opportunities in professional education, back-office software, analytics and credentialing systems linked to corporate recruiting. A greater realism is taking shape regarding exit markets, too. Expectations initially were high. They now seem to be recalibrating. Earlier this year, 2U launched a moderately successful IPO. The company’s shares floated at $13 and at press time traded at $15.79. “We think of 2U as an good example of a company that is paving the way for demonstrating that there can be companies in the space that both achieve scale and start to demonstrate measurable successes,” said Rob Stavis, a partner at Bessemer Venture Partners and a 2U board member. This story first appeared in affiliate magazine Venture Capital Journal, which is published by Buyouts Insider. Subscribers can read the full story and an accompanying table of edtech venture investments from 2011 through 2014 by clicking here. To subscribe to VCJ, click here for the Marketplace. Photo illustration by Janet Yuen for VCJ.

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VCs get smart on edtech: VCJ

Virgin Money postpones London stock market listing-Reuters

(Reuters) – UK lender Virgin Money has postponed its London stock market listing, the company said on Friday, delaying plans to raise around 150 million pounds ($241.5 million) in a float that could have valued the firm at 1.5-2 billion pounds ($2.4-3.2 billion). “Virgin Money continues to progress its plan for an initial public offering, mindful of market conditions. It now expects admission to occur later than October 2014 and as soon as constructive market conditions allow,” it said in a statement. The company announced its intention to float on Oct. 2. Since then, the FTSEuroFirst 300 has lost almost 8 percent as investors flee from stocks amid concerns over global growth prospects after a string of weak data. Billionaire founder Richard Branson and the UK government were both expected to receive windfalls from the Newcastle-based firm’s listing. The UK Treasury was due to be paid 50 million pounds under the terms of its purchase of nationalised lender Northern Rock in 2011. Virgin Financial Investments owns 46.5 percent of Virgin Money, and WL Ross, the U.S.-based investment vehicle of U.S. billionaire Wilbur Ross, owns 44.9 percent. It has 2.8 million customers and 75 branches, and made an underlying pretax profit of 59.7 million pounds in the first six months of this year. That was up from 53.4 million for all of 2013, its first profit since the Northern Rock deal.

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Virgin Money postpones London stock market listing-Reuters

Edgewater invests in Vertical Bridge

Edgewater Growth Capital Partners has made an undisclosed investment in Vertical Bridge. No financial terms were disclosed. Vertical Bridge is an owner and manager of wireless communications infrastructure. PRESS RELEASE Edgewater Growth Capital Partners III, L.P. (“Edgewater” or the “Fund”) is pleased to announce its recent investment in Vertical Bridge Holdings, LLC (“Vertical Bridge” or the “Company”). Vertical Bridge is an owner and manager of wireless communications infrastructure. Edgewater is partnering with the same management team that grew a very similar business, Global Tower Partners (“GTP”), from its inception in 2002 to the largest private operator of wireless communications infrastructure in North America. GTP was ultimately sold to American Tower in 2013 for $4.8 billion. Vertical Bridge is executing the same investment thesis that its management team followed in building GTP. The Company is acquiring cell towers and rooftop cell sites to build out its national mobile communications network. The rapid growth of wireless data usage is leading to greater network demand from mobile carriers who are Vertical Bridge’s core customers. We believe Vertical Bridge represents an excellent ground floor opportunity to partner with a proven, world class management team in an industry sector with strong growth trajectory. About Edgewater The Edgewater Funds is a Chicago-based private equity firm with $1.4 billion in committed capital. Through Edgewater Growth Capital Partners, we partner with management to help accelerate growth in their businesses. Edgewater focuses on funding high quality middle market companies where we can add substantial value through our capital, our experience and our broad network. Edgewater leverages the experiences of its Partners and the Executive Advisory Board who have distinguished themselves as successful CEOs and business leaders.

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Edgewater invests in Vertical Bridge