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Term Sheet -- Monday, November 6


MONDAY CATCH-UP

Good morning, Term Sheet readers. This week is already off to a busy start. Let’s dive right in.

(HUNDREDS OF) BILLIONS: Communications chipmaker Broadcom offered to buy smartphone chip supplier Qualcomm for $70 per share, or a whopping $130 billion in cash and stock. If the deal goes through, it would be the biggest technology acquisition ever. The tie-up would make Broadcom the third-largest chipmaker, behind Intel Corp. and Samsung Electronics Co.

Oh, but there’s one complication: Qualcomm is entangled in a legal saga with Apple, the most recent of which revolve around accusations of Apple sharing software secrets with Intel. This one will be a doozy to watch.

FEMALE VIAGRA UPDATE: Valeant Pharmaceuticals will sell its female libido-pill business Sprout Pharmaceuticals back to its former owners, two years after buying the company for about $1 billion. The news comes following a lawsuit in which former Sprout shareholders alleged Valeant didn’t market the drug effectively. I interviewed former Sprout CEO Cindy Whitehead last week for Term Sheet’s ‘5 Qs with a Dealmaker.’ You can read the Q&A here, and I’ll have more of an update on the future of Addyi tomorrow.

A DAY IN PARADISE: 13.4 million leaked files. 380 journalists across six continents. One global investigation into “the offshore activities of some of the world’s most powerful people and companies.” This gives me hope that journalism is alive and well. The Paradise Papers include nearly 7 million loan agreements, financial statements, emails, trust deeds and other paperwork.

One revelation you should know about: Wilbur Ross, the U.S. secretary of commerce, retained investments in a shipping firm with business ties to Russian President Vladimir Putin’s inner circle. Partnerships used by Ross have a 31% stake in Navigator Holdings (His personal share was reduced after he took office in February, but he reportedly retained an investment in the partnerships valued between $2 million and $10 million). According to the New York Times, Navigator Holdings earns millions of dollars a year transporting gas for Russian petrochemical firm Sibur. In other words, despite spearheading Donald Trump’s “America First” trade policy, Ross kept the investment in Navigator, which upped its dealings with Sibur. A Department of Commerce spokesman said Ross “was not involved in Navigator’s decision to engage in business with Sibur … has never met the Sibur shareholders referenced in this story and, until now, did not know of their relationship.” It’ll be quite a month for investigative journalists. More here.

PRINCES BEHIND BARS? Eleven Saudi princes and dozens of current and former officials have been arrested as part of an anti-corruption initiative, which also may be politically motivated. Those arrested include one of the wealthiest people in the world, Prince Alwaleed bin Talal, a billionaire investor who has pushed to diversify Saudi Arabia’s economy beyond oil. The sweeping arrests come only a week after the prestigious, forward-thinking Future Investment Initiative conference that took place in Riyadh. Fortune’s David Z. Morris writes:

The arrests may undermine that [forward-thinking] image, particularly since they appear to be motivated less by fighting corruption than by a push to consolidate power by Crown Prince Mohammad bin Salman, who chairs the new anti-corruption committee that ordered the arrests.

And one fun fact about Prince Alwaleed bin Talal. In 2015, he tweeted at then-candidate Donald Trump and said, “You are a disgrace not only to the GOP but to all America. Withdraw from the U.S presidential race as you will never win.” Trump responded with: “Dopey Prince @Alwaleed_Talal wants to control our U.S. politicians with daddy’s money. Can’t do it when I get elected. #Trump2016”  ¯\_(ツ)_/¯

ROBOT LAWYER GETS FUNDING: Remember when I included that odd “robot lawyer” tool in Term Sheet? Quick summary: After the Equifax security breach left more than 143 million Americans vulnerable, one founder created a chatbot called DoNotPay that lets people sue Equifax for up to $25,000 without a lawyer. Many Term Sheet readers wrote in to say it’s not as simple as it looks, brought up great points around privacy, and some said that no lawyer would consider this chatbot to be a material part of the practice of law. From one reader:

With the caveat that I am a lawyer and therefore biased on this issue, I found rather troubling the statement in your “Robot Lawyer” piece this morning that “There’s been chatter that blockchain technology, specifically smart contracts, will replace lawyers.” This suggests that lawyers simply fill in the blanks in form documents and can therefore be easily replaced by algorithms. While it is certainly true that some legal documents are just fill-in-the-blank forms, I don’t think any lawyer would consider this to be a material part of the of the practice of law. The automation of word processing is much more likely to reduce the need for paralegals and secretaries to whom lawyers often delegate these tasks.

Interestingly enough, that chatbot just raised $1.1 million in funding from investors including Andreessen Horowitz and Greylock Partners. Joshua Browder, the founder & CEO, told me that the money will be used to tackle more complicated areas of the law such as divorce, immigration, small claims & property tax. This is interesting, and I’m curious to hear more of your thoughts on this company.

THE LATEST FROM FORTUNE…

• Brexit uncertainty is already causing supply chain problems (by David Meyer)

• HSBC commits $100 billion to combat climate change (by Natasha Bach)

• Jeff Bezos sold $1.1 billion worth of his Amazon stock (by David Z. Morris)

• What humans will do once robots take their jobs (by David Meyer)

…AND ELSEWHERE

SoftBank increasing Sprint stake after T-Mobile deal called off. WeWork is going after kindergartners now. Airbnb is eyeing Wyndham Europe Rentals. The age of easy money is almost over. Ron Conway gets sued by his former venture capital partner. Inside the turmoil of Saudi Arabia.

VENTURE DEALS

MetricStream, Inc, a Palo Alto, Calif.-based provider of solutions for quality management, regulatory compliance, corporate governance, and quality management, raised $65 million in funding. Clearlake Capital Group led the round, and was joined by investors including EDBI.

Aquam Corporation, a San Diego, Calif.-based provider of risk mitigation technologies for water and energy transmission and distribution assets, raised $26 million in funding. Investors include NewWorld Capital Group, LLC.

Smartkarma, a Singapore-based provider of independent investment research, raised Series B funding of an undisclosed amount that brings the total funding to $21 million. Sequoia India led the round.

ChartMogul, a Germany-based subscription business analytics provider, raised $2.2 million in funding. Alven Capital led the round, and was joined by investors including Point Nine Capital.

Botanic Technologies Inc., a San Francisco-based multimodal bot development company, raised funding of an undisclosed amount. Outlier Ventures led the round.

PRIVATE EQUITY DEALS

Vintage Capital offered to buy Rent-A-Center Inc (Nasdaq:RCII) for about $693 million, according to Reuters. Read more.

Advent International and Bain Capital are among bidders looking to invest in BS Payone GmbH, a Germany-based payments company, according to The Wall Street Journal. Read more.

Bain Capital and Tempus Group Co. are in the final stages of bidding for Trans Maldivian Airways, a Maldives-based tropical island airline, according to Bloomberg. Financial terms weren’t disclosed, but the airline could be valued at about $500 million. Read more.

Cedarlake Capital acquired a controlling stake in BMF Group AG, a Switzerland-based ropeway manufacturer. Financial terms weren’t disclosed.

Summit Park recapitalized smarTours, a New York City-based provider of travel experiences to exotic global destinations. Financial terms weren’t disclosed.

National Waste Partners, a portfolio company of Bestige Holdings, acquired J-Mec, Inc, a Lake Mills, Wisc.-based waste management provider. Financial terms weren’t disclosed.

CenterOak Partners made a majority investment in FullSpeed AutomotiveTM, a Greenwood Village, Colo.-based independent franchisors of automotive quick lube centers. Financial terms weren’t disclosed.

Evans Food Group, a portfolio company of Wind Point Partners, acquired Gaytan Foods Inc, a City of Industry, Calif.-based producer of pork rinds. Financial terms weren’t disclosed.

OTHER DEALS

Qatar Airways agreed to buy a 9.61% stake in Cathay Pacific Airways (SEHK:293), according to Reuters. Read more.

IPOs

MPM Holdings, a speciality silicone producer based out of Waterford, N.Y., said it plans to raise $350 million in an offering of 14.6 million shares(29% insider) priced between $23 to $25. In the 12 months ending June 30, the company posted loss of $146 million on sales of $2.3 billion. Apollo Management (39.74% pre-offering), Oaktree Capital Management(20.43%), D.E. Shaw (7.44%), and Pentwater Capital Management (6.83%) back the company. J.P. Morgan and Goldman Sachs are underwriters in the deal. MPM plans to list on the NYSE as “MPMH.”

Sentinel Energy Services, a SPAC based out of Houston, Texas, raised $300 million by offering 30 million units at $10. It plans to buy up underperforming energy services companies. Krishna Shivram, who worked at oilfield services provider Schlumberger for 25 years, is CEO of the company. Goldman Sachs and Citi are bookrunners in the deal. The company plans to list on the Nasdaq as “STNLU.”

Leisure Acquisition Corp, a New York City-based SPAC hoping to acquire a company in the leisure and entertainment sector, filed for a $250 million IPO. The company plans to offer 25 million units at $10 a piece. HG Vora Capital Management(49.5% pre-offering) and A. Lorne Weil(23.2%) back the company. Morgan Stanley is sole bookrunner in the deal. Leisure plans to list on the Nasdaq as “LACQU.”

SailPoint Technologies, an Austin, Texas-based company providing access management software, said it plans to offer 20 million shares(28.5% insider) at between $9 to $11 a piece, raising $200 million. The company posted revenue of $132.4 million in 2016 and loss of $3.2 million. Thoma Bravo backs the company. Morgan Stanley, Citigroup, Jefferies, and RBC Capital Markets are underwriters in the deal. It plans to list on the NYSE as “SAIL.”

Stitch Fix, a San Francisco-based personal styling company,said it plans to offer 10 million shares(10% insider) between $18 to $20 a piece, raising $190 million. Baseline Ventures(28.1% post-offering), Benchmark Capital(25.6%), and Lightspeed Venture Partners(11.8%) back the company. Goldman Sachs and J.P. Morgan are underwriters in the deal. The company plans to list as “SFIX” on the Nasdaq.

Jianpu Technology, an asset management platform based in Beijing, China, said it plans to raise $214 million in an offering of 22.4 million ADSs priced between $8.50 and $10.50.The company posted revenue of $52.6 million in 2016 on loss of $26.9 million. Sequoia Capital China(17.6% pre-offering) Lightspeed Partners(16.7%), and Pavilion Capital International via Spring Bloom Investments (7.5%) back the company. Goldman Sachs, Morgan Stanley, and J.P. Morgan are underwriters in the deal.

Aquantia, a San Jose, Calif.-based Ethernet manufacturer, raised $61 million in an offering of 6.8 million shares at $9, below its $10 to $12 range. The company posted revenue of $86.7 million and loss of $277,000 in 2016. Pinnacle Ventures(10.9% pre-offering), Walden International(10.7%), Rusnano (11.1%), Mubadala Investment Company(10.3%), and Paxion Partners(6.8%). Morgan Stanley, Barclays, and Deutsche Bank are joint bookrunners in the deal. The company plans to list on the NYSE as “AQ”.

Arsanis, a Waltham, Mass.-based clinical stage biopharmaceutical company focused on monoclonal antibodies, said it plans to raise $50 million by offering 3.13 million shares between $15 to $17 a piece. The company posted loss of $23 million in 2016. Polaris Ventures (17.8% pre-offering), SV Life Sciences(17.8%), OrbiMed(17.8%), NeoMed Management(7.4%), and the Bill and Melinda Gates Foundation (9.4%) back the company. Citigroup, Cowen, and Piper Jaffray are underwriters in the deal. The company plans to list on the Nasdaq as “ASNS.”

ACM Research, a Fremont, Calif.-based semiconductor cleaner, raised $11 million in an offering of 2 million shares at $5.60, below its previously stated range of $7.50 to $9.50. The company posted revenue of $27.4 million and income of $1 million. Shanghai Science and Technology Venture Capital Co. (18.2% pre-offering), Pudong Science and Technology(12.2%), H.L. Hsieh(10.9%), and Zhangjiang AJ (8.6%) back the company. Roth Capital is bookrunner in the deal. The company plans to list as “ACMR.”

Full Spectrum Inc., a Sunnyvale, Calif.-based developer of wireless communications infrastructure equipment, withdrew its planned  $15 million IPO. Joseph Gunnar & Co. was underwriter. It planned to trade on the Nasdaq under ticker symbol “FMAX”.

EXITS

Rotunda Capital Partners sold Primary Integration Solutions Inc, a Farmingdale, N.Y.-based operational risk management provider, to Bureau Veritas. Financial terms weren’t disclosed.

FIRMS + FUNDS

Kobalt Capital Ltd, a subsidiary of Kobalt, raised $600 million in a second managed fund to invest in music copyright.

PEOPLE

Nina Achadjian joined Index Ventures as a principal. Previously, Achadjian was at Cota Capital.

Pamela Fang joined General Atlantic as a managing director in the firm’s Hong Kong office.

Raul Alvarez joined Advent International as an operating partner. Alvarez is the former president and chief operating officer of the McDonald’s Corporation.

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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.

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