Category: News

Silver Oak Services Partners closed its latest fund, Silver Oak Services Partners II, L.P., with $206 million. Forum Capital Partners served as placement agent and fundraising advisor to the firm. Silver Oak focuses on control investments in target sectors of the business services, consumer services, and healthcare services industries in the United States.

PRESS RELEASE
Forum Capital Partners (“Forum”) is delighted to congratulate Silver Oak Services Partners (“Silver Oak”) on the successful fundraising for Silver Oak Services Partners II, L.P. (“Fund II”), which held its final closing on April 30, 2013. Fund II closed on total commitments of $206 million, exceeding its target. Forum served as placement agent and fundraising advisor to Silver Oak and helped raise commitments from a diverse group of investors, including leading corporate pension plans, family offices, funds of funds, insurance companies and a sovereign entity. Fund II received strong support from both existing and new investors.
“We are pleased by the market’s reception of Silver Oak’s second fund, which exceeded its target despite a challenging fundraising environment,” said Robert Schwabe, Managing Partner of Forum Capital. “The successful fundraising campaign is directly attributable to the strength and experience of Silver Oak’s team and differentiated investment approach.”

Silver Oak will continue to execute its disciplined investment strategy, which is focused exclusively on control investments in target sectors of the business services, consumer services, and healthcare services industries in the United States. Silver Oak’s unique approach is characterized by a proactive, research-led investment process to identify attractive services sectors and related actionable investment opportunities which will benefit from Silver Oak’s industry expertise, relationships and disciplined value creation methodology. Silver Oak has already completed two platform investments on behalf of Fund II: the September 2011 acquisition of Directravel Holdings, a provider of outsourced corporate travel management services, and the April 2012 acquisition of Physical Rehabilitation Network, a physical therapy clinic platform in the Western United States.

About Forum Capital Partners:
Forum Capital Partners (www.forumcp.com), through its SEC-registered broker-dealer, Forum Capital Securities LLC, serves as an advisor and placement agent to experienced private equity, real estate and real asset managers worldwide. Founded in 2001 by Jeffrey Stern and Robert Schwabe, Forum advises and raises institutional capital for buyout, growth equity, real estate, infrastructure, secondary and other private investment funds worldwide.

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Sumitomo Mitsui Banking Corp. said it agreed to acquire as much as 40 percent of Indonesian lender BTPN, giving the Japanese bank a foothold in the fast-growing Southeast Asian economy, Reuters reported. SMBC’s pursuit of Indonesia’s seventh-biggest bank underscores a sustained push abroad by Japanese companies to beat sluggish growth in their home market. SMBC will first buy 24.26 percent of BTPN for 6,500 rupiah per share, a 14 percent premium to BTPN’s last traded price – paying 9.12 trillion rupiah ($937 million) according to Reuters calculations. It is buying most of it from TPG Capital, which acquired 71.6 percent of Bank Tabungan Pensiunan Nasional Tbk PT in 2008.

(Reuters) – Sumitomo Mitsui Banking Corp (SMBC) said it agreed to acquire as much as 40 percent of Indonesian lender BTPN, giving the Japanese bank a foothold in the fast-growing Southeast Asian economy.

SMBC’s pursuit of Indonesia’s seventh-biggest bank underscores a sustained push abroad by Japanese companies to beat sluggish growth in their home market.

SMBC will first buy 24.26 percent of BTPN for 6,500 rupiah per share, a 14 percent premium to BTPN’s last traded price – paying 9.12 trillion rupiah ($937 million) according to Reuters calculations.

It is buying most of it from TPG Capital, which acquired 71.6 percent of Bank Tabungan Pensiunan Nasional Tbk PT (BTPN) in 2008.

For TPG, the partial sale is another example of a profitable exit from a financial services related business in Asia. TPG and its Indonesian affiliate North Star paid about $195 million for the stake in 2008.

SMBC will raise its stake in the Indonesian lender to 40 percent as long as it wins regulatory approval, the Japanese bank said in a statement on Wednesday.

The purchase represents one of the most expensive bank deals in Asia, being struck at a price-to-book ratio of about 4.5, based on Reuters calculations.

SMBC is a unit of Japan’s third-largest lender by assets, Sumitomo Mitsui Financial Group Inc (SMFG). It was unclear how TPG plans to exit the rest of its stake in BTPN.

Established in 1958, BTPN operates as a commercial bank with a market value of $3.45 billion, and has more than 19,000 employees and over 10,000 branches.

SMBC’s move was first reported by Reuters earlier this month.
(By Taiga Uranaka and Denny Thomas)

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Cambridge, Mass.-based Good Start Genetics Inc., a molecular diagnostics company, has closed a non-dilutive loan facility for up to $28 million of capital from Capital Royalty L.P. The company will use the money for growth initiatives, among other efforts.

PRESS RELEASE
Good Start Genetics®, Inc., an innovative molecular diagnostics company that has developed the new gold standard in carrier screening, today announced that it has closed a non-dilutive loan facility for up to $28 million of capital from Capital Royalty L.P. Good Start Genetics will use the proceeds to support its long-term corporate growth initiatives for the company’s next-generation sequencing (NGS) based carrier screening platform.

“Our investment in Good Start Genetics is consistent with our focus on providing flexible financing solutions for innovative companies with commercial technologies,” said Charles Tate, chairman and founder of Capital Royalty L.P. “We are excited about the significant long-term growth potential of Good Start given the combination of its unique next-generation sequencing based technology, applicability of GoodStart Select™ in large and growing markets, and very capable management team.”

Good Start Genetics is a leading provider of carrier screening for the in vitro fertilization (IVF) market. Since its April 2012 commercial launch targeting the 460 IVF centers in the United States, Good Start Genetics’ high-complexity, CLIA- and CAP-accredited laboratory has processed tens of thousands of test orders. The GoodStart Select carrier screening service provides testing for all 23 diseases recommended by major medical societies and detects both common disease-causing mutations, as well as rare pathogenic mutations that would go undetected by laboratories using older, traditional genotyping-based technologies.

“We’re proud to have the support of Capital Royalty through this investment and under very attractive, non-dilutive terms,” said Don Hardison, president and chief executive officer of Good Start Genetics. “These funds further position us to continue growing our NGS-based GoodStart Select carrier screening presence within the IVF community, while evaluating potential opportunities to expand our reach into other areas, including global carrier screening markets. We are now in a strong financial position with sufficient capital to take us far beyond our projected 2013 profitability and cash flow operating goals.”

About Good Start Genetics, Inc.

Good Start Genetics has developed the new gold standard in carrier screening by making testing for the most comprehensive set of known and novel disease-causing mutations accessible for routine clinical practice. After years of development and rigorous validation, Good Start Genetics has harnessed the power of next-generation sequencing and other best-in-class technologies to provide highly accurate, actionable and affordable tests for all disorders recommended for genetic testing by ACOG and ACMG. For these reasons, fertility specialists and their patients can have a high degree of confidence in their carrier screening results, and no longer have to compromise accuracy for price. For more information, visit www.goodstartgenetics.com.

About Capital Royalty L.P.
Capital Royalty L.P. is a market pioneer and innovator in healthcare investing focused on intellectual property investments in approved products through structures including royalty bonds, secured debt, revenue interests and traditional royalty monetizations. Capital Royalty works directly with leading healthcare companies, research institutions and inventors to provide customized solutions to meet their unique financing needs. The value of each investment is based on the future revenue of commercialized biopharmaceutical products and medical technologies. Capital Royalty is actively making investments through its managed investment funds.

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e.Bricks Digital, a Brazilian digital media and technology investment firm, has launched a $100 million fund for strategic investments in mobile, e-commerce and digital media early-growth stage companies. The fund will invest in Brazilian companies and U.S. companies aiming to reach Latin American markets, the firm said.

PRESS RELEASE
e.Bricks Digital, the digital media and technology investment firm, announces today the launch of the Early Stage Fund and their debut in to the U.S. market. Through strategic investments in mobile, e-commerce and digital media early-growth stage companies, e.Bricks Digital’s unique development model combines hands-on support and top talent enabling strong, sustainable and scalable growth. The idea is to invest in Brazilian companies and U.S. companies aiming to reach Latin American markets.

“We are expanding our scope of investments in order to act on initiatives and early growth stages because they have different characteristics of maturity and different needs. Our appointed teams are extremely specialized, dedicated and allocated for each operation while respecting the independence of each strategy”
As the brainchild of RBS Group, one of the largest media groups in Latin America, and with much support from the industry’s top leadership, partners, distributors and vendors, e.Bricks Digital’s new fund, with capital over $100 million, intends to make 12-15 investments per year. E.Bricks growth stage current portfolio includes Predicta, Wine.com.br, Grupo.Mobi and Hi-Mídia.

Targeting companies with large market potential, annual pre-revenue turnover of $10 million, and a scalable business model, e.Bricks Digital approaches business as an active participant during the critical high-growth stage. Their hands-on methodology provides more than just capital and incorporates their deep-rooted digital expertise, business experience and access to top market-leading talent, which together cultivate fast and sustainable growth.

“It is essential that every company has strong entrepreneurs with the ability to execute plans for growth. We created e.Bricks Digital specifically to look for companies in solid markets and have the business models to build efficiencies in the value chain in addition to being open to business models with co-investors,” says Eduardo Sirotsky Melzer, CEO of RBS Group.

e.Bricks Digital is quickly positioning itself as one of the most important hubs of technology investments.

“We are expanding our scope of investments in order to act on initiatives and early growth stages because they have different characteristics of maturity and different needs. Our appointed teams are extremely specialized, dedicated and allocated for each operation while respecting the independence of each strategy,” says Fabio Bruggioni, CEO of e.Bricks Digital.

About e.Bricks Digital

e.Bricks Digital is dedicated to business development in the digital sector of the RBS Group, targeting innovative, high-growth stage, leaders in their areas of expertise and entrepreneurial excellence. Investing in three main sectors: e-commerce targeted, mobile and digital media and technology, the company leads with a rich portfolio of many successful breakout companies. Based in São Paulo, the company was established in October 2012 from the spin-off of the digital business unit of the RBS Group. Technology and scalability are at the core of its strategy. The company is active in a market that could reach R$ 66 billion in revenue by 2015.

About RBS
The RBS Group is one of the largest media business groups in Brazil. In traditional media, with its TV and radio stations and newspapers, it is the market leader in Rio Grande do Sul, and Santa Catarina, in all segments in which it operates. Through its independent digital company, e.Bricks Digital, RBS operates a portfolio of digital leaders in their industries and high growth sectors with innovative models and management excellence.

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In the data world today, “big” dominates. But sometimes you don’t need big. You need a small dose of exactly the right data. Data that bear precisely on the question at hand, that you understand deeply, and that you can trust. If such data are already at hand, great. But frequently they are not. And then, nothing beats a well-conceived, -designed, – controlled, -executed, and -analyzed experiment. Companies need to make sure experimentation is included in their “data toolkits,” learn when to use it, and develop the skills to conduct effective experiments.

Let’s consider a recent example: Boeing’s lithium ion batteries for the Dreamliner 787. As you probably know, the issue has been all over the news for a couple of months. In two instances, the batteries have nearly caught fire, grounding the aircraft for over three months. The planes are now back in the air, but they still won’t be carrying passengers for another month or so.

What Boeing needs right now is not big data but a sequence of experiments that do what previous tests did not: isolate the root causes of the problems that have occurred so far; verify that fixes being made really work; identify other problems that are yet to rear their ugly heads; predict how the batteries will perform under “worst-case scenarios”; and convince regulators and the flying public that the Dreamliner is safe for passengers. Over time, Boeing and its suppliers will almost certainly require still even more experiments to prevent future problems, to better predict battery life, and to test new designs, new manufacturing techniques, and new maintenance strategies. Some of these tests have and will be conducted under controlled conditions in laboratories, and some must be conducted under increasingly less controlled circumstances in the air.

In the unfolding data revolution, companies must develop the capabilities to experiment. But too many eschew it. This was the case in a couple of recent client engagements. In both cases, senior managers had posed a seemingly simple question. But the effort to assemble all the relevant information, across their disparate data warehouses, was daunting. Months went on, and the question remained unanswered. In both cases, a simple experiment, taking just a few weeks, would have filled the bill quickly, cheaply, and better than any alternative. In the vast majority of similar cases, we are not talking about a series of complex experiments under the extreme conditions facing Boeing — just small-scale, narrowly focused real-world trials.

Some may view experimentation as “old school,” not up to the rigors of the unfolding data revolution. Quite the opposite — its fabled past is the best reason to employ it today! Experimentation has a rich and storied history in product development and market research. It has contributed to hundreds of thousands of improved products in nearly all sectors, from agriculture, to electronics, to medicine, and so on. And not just design — industrial experimentation has contributed to improvements in the technologies and processes needed to grow corn, assemble cars, find oil, and so forth. Industrial experimentation has a rich history in the service sector as well. Many Information Age companies, such as Google, already get this message. And over the years, I’ve helped many others conduct simple and effective experiments in areas as diverse as customer onboarding to policy deployment.

It is critical that companies understand why experimentation works, so they will know where to apply it. In short, when used properly, experimentation brings the power of the scientific method to the problems companies face today. This means the attendant focus, sharp definition of the question, careful design, data you can trust, and in-depth analyses — just what is called for in many situations.

Companies also must learn how to conduct experiments. They are hard work. It’s all too easy to define the problem poorly, choose a bad sample, skimp on design, fail to calibrate instruments, or misinterpret the data. Boeing and its suppliers had, of course, conducted extensive battery tests. Still, as already noted, they missed the mark.

Even when the experiment itself is flawless, things can go wrong in the end. Most experiments involve sampling — a seemingly incomprehensible topic to many managers — so they don’t trust it. I’ll never understand why so many otherwise smart managers will trust a slightly off-target population of data that’s known to be loaded with errors over a small, spot-on, high-quality sample, but they do! The only way I’ve found to combat this issue is to clearly explain the many benefits of experimentation and present them in a powerful, but balanced, manner.

To be clear, I am not advocating experimentation over big data. If you have data you can trust, by all means use them. And there are many instances where conducting an experiment is simply infeasible. You can’t run an experiment to predict the advance of the flu or isolate potentially exploding manhole covers. One hopes that big data and experimentation will work hand in hand. It’s not hard to imagine the day when chips are built into Boeing’s battery cells to continually monitor the health of each cell and take it out of service when needed, obviating the need to experiment. Conversely, one expects there will be times when big data suggests a direction that demands further experimentation.

Companies that aim to score with data must not adopt a one-size-fits-all approach and blindly follow the crowd into big data. They need many approaches and tools in their data toolkits. For almost all, experimentation deserves a prominent spot in that toolkit. For many problems, it is the best approach. Companies must develop a deep appreciation for why and how it works. And give it a fair chance.

After several years of quietly developing space in its massive underground facility in Pennsylvania, Iron Mountain is entering the data center business in a bigger way. The company has announced plans to build and lease data centers, offering both colocation services and wholesale suites to enterprise and government customers.

Iron Mountain is building out data center space within the Underground, its 145-acre records storage facility located 220 feet underground in a former limestone mine in Boyers, Pa., about 50 miles north of Pittsburgh. The facility has long been used for storing paper records and tape archives, and has an existing workforce of 2,700 employees, as well as its own restaurant, fire department, water treatment plant and back-up power.

But the Underground also offers a naturally low ambient temperature of 52 degrees, and has an underground lake that can be used to provide cool water for data center cooling systems, eliminating the expense of energy-hungry chillers. Iron Mountain developed a proof-of-concept facility known as Room 48, and has subsequently leased data center space to Marriott and several government agencies.

Leveraging its Corporate DNA

With the launch of Iron Mountain Data Centers, the company is seeking to leverage both the Underground facility and its existing document storage relationships with many of the nation’s largest IT users.

“We spent a lot of time looking at the data center market,” said Mark Kidd, senior vice president and general manager of data centers for Iron Mountain. “Most of today’s data center providers sell space. We’re packaging together services that will enable enterprises to outsource the ongoing management of their data center. We want to make it easier for enterprises to outsource. And our DNA in tracking information assets from creation to disposition is particularly differentiating for organizations that must comply with industry regulations. No one in today’s data center market has our track record in security and facilitating compliance.”

Kidd says Iron Mountain is building “several megawatts” of speculative technical space at the Underground to get its data center program rolling. Up to 10 megawatts of critical power is available, Kidd said. The facility currently has two carriers available, but will add two more within the next 90 days and expects to have six providers in the facility within 6 months.

“The fact that it is an active multi-tenant data center makes it pretty easy to get carriers in,” said Kidd of the 1.7 million square foot facility. “We are currently a living, breathing, enormous facility with lots of space to build out.”

The Data Bunker Goes Wholesale

Iron Mountain’s strategy will provide the largest test yet of the appetite for underground “data bunkers,” bringing scale and marketing muscle to a niche that has been largely limited to smaller providers. These “nuke proof” underground facilities are often based in caves or former telecom or military installations, and appeal to tenants seeking highly secure space, such as government agencies, financial services firms, and healthcare providers or other enterprises with high compliance requirements.

By bringing a wholesale offering into the data bunker space, Iron Mountain is bringing a name brand into the data bunker space, which may capture the interest of national customers considering underground space. The company is offering both retail colocation space and wholesale suites. Services being offered include engineering and design, development and construction, and ongoing facility operations and management.

In 2008, Marriott leased 12,500 square feet of space to establish a data center in the Underground for disaster recovery purposes.

“We have always had a rigorous and constant focus on having disaster preparedness in place,” said Dan Blanchard, vice president of enterprise operations at Marriott. “More than five years ago, we determined that we needed more flexibility and we got it. Today we have a data center that provides Marriott with a tremendous capability for disaster recovery, and we have a great partner in Iron Mountain.”

Looking Beyond the Underground

In the short term, Iron Mountain’s data center business will focus on the Pennsylvania facility. But the company realizes that a long-term data center strategy will need to include facilities in more than one market.

Kidd notes that Iron Mountain has the real estate portfolio to make that possible. The company operates 800 facilities, and owns about 40 percent of those sites. The company is in the process of converting to a real estate investment trust (REIT), a process it hopes to complete by the beginning of 2014.

A REIT is a corporation or trust that uses the pooled capital of many investors to purchase and manage income property. Income comes from the rent and leasing of the properties, and REITs are legally required to distribute 90 percent of their taxable income to investors. Three of the largest public data center developers – Digital Realty (DLR), DuPont Fabros (DFT) and CoreSite Realty (COR) – are organized as REITs.

Without much fanfare, the Department of Energy (DOE) recently updated the list of loan guarantee projects on its website. Unlike 2008, when Barack Obama pledged to create 5 million jobs over 10 years by directing taxpayer funds toward renewable energy …

T-Mobile US on Wednesday posted first-quarter financial results for the pre-merger T-Mobile USA, which saw earnings and revenue continue to slide. Adjusted EBITDA of $1.2 billion was down more than 7% from the first quarter last year, and revenue sank 7% to $4.7 billion. The carrier finished the March quarter with approximately 34 million subscribers, an increase of about 579,000 customers. T-Mobile added 3,000 net branded subscribers but it lost 199,000 net postpaid customers in the quarter.

Continue reading…

On the all-Chrome podcast this week, we start out with news of Asus getting into the Chrome hardware market later this year and how Intel’s upcoming new Atom chip could prime the pump for all-day battery life on Chromebooks.

From a personal standpoint, Chris has had a few problems on the Stable channel with his Chromebook while Kevin is enjoying all the new features of the Dev channel. A few new tips are shared — including where to get a Chromebook at a discount — as well as our extension of the week for Chrome and Chrome OS.

Show notes

Hosts: Chris Albrecht and Kevin C. Tofel

• Asus plans Chrome hardware for the second half of 2013
• What might Intel’s Silvermont silicon bring to Chromebooks?
• More about that LTE radio in the Pixel
• Tip: Opening tabs in new pages
• Chris’ Chromebook is crashy!
• Kevin is finally rocking the Dev channel and all the great new features it brings
• Extension of the week: Add to Amazon Wish List
• Google Keep is no Evernote, but it’s handy and works offline; it’s a Packaged App!
• Chromebooks can be found for as little at $185.50 at Amazon’s Warehouse

Got questions, tips or tricks for an upcoming GigaOM Chrome Show? Find Kevin on Google+, Twitter (@kevinctofel) or via e-mail ([email protected])

(download this episode)

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• How tomorrow’s mobile-centric data centers will look
• Analyzing the wearable computing market

AOL’s latest quarterly earnings, posted early Wednesday morning, showed ongoing growth in its content and advertising business as the company posted a 2% gain in revenue from a year ago and earnings per share of $0.32.

The profit was at the low end of the average of $0.32 – $0.34 that analysts had been predicting, while AOL’s $538.3 million in revenue was slightly above expectations.

Update: the market does not like the EPS. AOL share prices are off more than 10% this morning.

Overall, the numbers reflect an ongoing turnaround at AOL, which for years had been depending on its legacy dial-up subscription business for profit as its content and advertising business struggled. In March, CEO Tim Armstrong said recent results validated the company’s focus on content.

The most encouraging sign for the company may be a 14% growth in revenue in its so-called brand group, which consists of its in-house media properties like the Huffington Post, AOL.com and TechCrunch. AOL networks, which represent its third-party advertising service, was also up 8%.

The biggest question for the company remains profit where the company continues to depend on its shrinking legacy business to pay the bills. Both the ad networks and brand group continue to lose money, in part because sites like Patch.com continue to be a drag on earnings. This is reflected in the following screenshot, showing revenue and adjusted OBITDA:

If there is a dark spot here, it is the fact that, notwithstanding revenue growth, AOL still depends on its historic business of selling dial-up subscriptions. While losses in the brand group shrank by 71%, they are still losses — and the tech-heavy AOL Networks, in which AOL has invested significantly, is losing money too. Here’s how the company’s earnings release explains the profit situation:

“While significantly improved, Brand Group Adjusted OIBDA remains negative reflecting our investment in Patch and in our editorial and engineering staff at our core brands and in our sales force domestically and internationally […] AOL Networks Adjusted OIBDA decreased year-over-year due to higher research and product development costs primarily related to continued investment in Adlearn Open Platform (our demand-side platform) and the launch of AdTech MARKETPLACE (our supply-side platform).”

Update: an earlier version of this story cited analysts’ prediction as $0.32; I’ve updated to also to refer to a separate consensus account of $0.34

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Kayne Anderson Middle Market Credit, the private credit platform of Kayne Anderson Capital Advisors, along with Comvest Partners provided a $24 million term loan to SCG Financial Acquisition Corp. The loan will fund the business combination of Reach Media Group Holdings and Symon Communications Holdings Corp.

PRESS RELEASE

Kayne Anderson Middle Market Credit, the private credit platform of Kayne Anderson Capital Advisors, L.P. (“Kayne” or “Kayne Anderson”), and Comvest Partners provided a $24,000,000 term loan to SCG Financial Acquisition Corp. (d/b/a “RMG Networks”) (NasdaqCM: RMGN) to fund the business combination of Reach Media Group Holdings, Inc. (“RMG”), a leading digital signage media and technology company, and Symon Communications Holdings Corporation (“Symon”), a leading global provider of enterprise-class digital signage solutions.

The deal was led and agented by one of Kayne’s middle market lending funds, Kayne Senior Credit Fund, L.P. Comvest Partners, through its fund Comvest Capital II L.P., provided $8,000,000 of the $24,000,000 term loan.
The combination of RMG and Symon creates a leading digital signage media company that offers intelligent visual technology solutions to enterprise customers and leadership in digital place-based media to advertisers. RMG Networks now has over 7,500 customers including approximately 70% of the Fortune 100, a majority of the Fortune 500, and over 1 million installed screens.
Gregory Sachs, Executive Chairman of RMG Networks said, “I am very excited about this new business combination. Our goal is to become a premier platform for providing customers and partners intelligent visual communications solutions and we will move swiftly to capture opportunities in this highly fragmented space. I believe we have the right lenders to help execute this strategy, as demonstrated in their hard work to help us get the transaction done quickly and efficiently.”
Ken Leonard, Managing Partner, Kayne Senior Credit Fund, L.P. said, “The transaction represented a unique opportunity to finance two industry leading companies with niche focuses in defensible markets. We are delighted to have closed the transaction and look forward to working with the company in meeting future growth needs.”
Dan Lee, Managing Director, Comvest Partners, said, “We were impressed by both RMG and Symon, and particularly by the quality of their management teams. This was an opportunity to support Mr. Sachs and Kayne Anderson, who we have known for years and think very highly of. We look forward to supporting the business with additional capital and building a very productive relationship with Kayne Anderson over the years.”
About RMG Networks:
RMG Networks is a leading provider of complete digital signage solutions. Its RMG Media Networks business unit engages elusive audience segments with relevant content and advertising delivered through digital place-based networks, including the largest digital airline media network with a monthly audience of more than 35 million passengers and a mall media network reaching over 62 million monthly viewers in 161 shopping malls across the United States. Its RMG Enterprise Solutions business unit provides digital signage hardware, software and services to power state-of-the-art visual communication implementations for critical contact center, supply chain, employee communications, hospitality, retail and other applications. The company is based in Plano, TX and operates offices in major cities throughout the United States and in the United Kingdom, China, India and the U.A.E. Its securities are traded on the NASDAQ Capital Market (RMGN) and the OTC Bulletin Board (SCGQU and SCGQW). For more information visit www.rmgnetworks.com.
About Comvest:
Comvest Partners, with $1.1 billion of assets under management, provides flexible financing solutions to lower middle-market companies through its equity and debt funds, often meeting time-critical and complex funding requirements. Our firm includes seasoned, senior level operating executives who partner with managers and owners of companies to operationally improve businesses and create long-term value. Since 2000, Comvest has invested more than $1.7 billion of capital in over 115 public and private companies. Please visit www.comvest.com.
About Kayne Middle Market Credit:
Kayne Anderson Middle Market Credit, with offices in New York, Houston, and Los Angeles, is a private debt platform focused exclusively on meeting the financing needs of middle market companies. With $9551 million of capital raised, Kayne Anderson Middle Market Credit provides complete capital solutions, including senior secured bank debt, junior secured debt, unitranche debt, mezzanine debt and preferred and common equity to companies in a variety of different industries predominantly across North America. Kayne Anderson Middle Market Credit is a part of Kayne Anderson Capital Advisors, L.P. (“Kayne Anderson”) a leading alternative investment management firm with $21 billion in assets under management (as of 4/30/13) and nearly 30 years of successful investing experience. Kayne Anderson focuses on niche investing in middle market credit, energy and energy infrastructure, real estate, growth equity, and municipal opportunities. For more information, please visit www.kaynecapital.com.
1 Includes total commitments raised for Kayne Anderson Mezzanine Partners (“KAMP”) and Kayne Senior Credit Fund (“KSCF”), targeted capital for Kayne Credit Opportunity Fund, L.P. (“KCOF”) and strategic relationships and separately managed accounts in the strategy.

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Fast forward to 2014 and it might be harder to get an appointment with your doctor, thanks to an influx of up to 30 million new patients expected to enter the health care system under the Affordable Care Act.  But Palo Alto-based HealthTap believes its online health community for doctors and patients can help offset the impending avalanche of demand – and it just raised $24 million more to prepare.

The Series B round, which was led by Khosla Ventures and included current investors Mayfield Fund and Mohr Davidow Venture Partners, brings the company’s total amount raised to $37.9 million. In addition to the new funding, the startup added a new board member: former Square COO and Khosla Ventures’ newest partner Keith Rabois.

Since launching in 2011, the site has created a network of more than 38,000 physicians who answer anonymous patient questions on a wide range of health issues. As the health system readies for a “demand shock” of new patients in 2014, HealthTap CEO and co-founder Ron Gutman said his site can help alleviate some of the pressure.

“We’re putting in a technology multiplier that can enhance the number of patients every physician can serve,” said Gutman. “We’re using technology to clone the physician to make him available to more patients.”

Instead of rushing to the doctor each time they have a question, HealthTap enables patients to quickly reach a doctor online. If they just have a non-urgent, general question, they can ask a free question of the entire network (or search the site’s deep repository of questions and answers). And if they want more personalized, specific feedback, they can message individual doctors for $9.99.

Companies including American Well and Sherpaa also use technology to more efficiently connect patients and doctors (although those companies support video chats and phone calls, not just text messaging), but they work through employers while HealthTap goes straight to consumers.

To date, HealthTap has focused on building out its service with new products – from features that let users access peer-reviewed medical research to those for discovering and rating doctors. But Gutman said the new funding will enable the team to significantly expand the team with business development, marketing and data science staff.

A key goal for the business team will be new partnerships with other apps and health companies, Gutman said, adding that about 1,000 developers and companies are already on a waiting list to access their API. And he added that another focus will be hiring more data wonks to parse the site’s data and package it in more valuable ways.

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UPDATE (3.30am PT): This article originally suggested that Mega had not previously revealed secure instant messaging plans. In fact, this had been revealed in a development roadmap published in January.

Not content with sticking two fingers up at the authorities with his Mega secure cloud storage service, larger-than-life entrepreneur Kim Dotcom is planning to release further privacy-centric services. And interestingly, in a Q&A session with the New Zealand Herald late last night, Dotcom said he intended the secure email and instant messaging services to be both military-grade and so easy to use that the user wouldn’t have to do anything to benefit from this security.

This is always the issue with security – if it requires much thought on the user’s part, it will generally fail. Dotcom, who also released a white paper on Tuesday to accuse the U.S. government of misleading New Zealand authorities while pursuing the German-born millionaire, said in the session that he wanted to “provide tools that give our users their privacy back”:

“We are working on encrypted email, IM, etc. The key to make encryption a global success is ease of use. So I am spending most of my time figuring out how I can give you encryption without you having to do anything and at the same time give you military grade privacy. You are all naked on the Internet. I like to help you put some pants on :-)”

It remains unclear what Mega is planning, technologically speaking, to achieve this kind of friction-free encryption. There are plenty of tools out there for sending encrypted emails and messages, but they tend to involve browser extensions or web forms, or paid subscriptions.

Mega’s cloud storage service has also come in for criticism by some security experts, who have pointed out that its use of so-called “convergent encryption” (in order to allow de-duplication) theoretically leaves a trace of who uploaded which file.

That extradition thing

Of course, Dotcom’s plans hinge somewhat on the ongoing extradition proceedings that he faces. The U.S. had Dotcom and some of his associates raided and arrested at the start of 2012 over allegations of copyright infringement, to do with their highly popular (and now deceased) Megaupload file-sharing service, and wants them sent over to face charges.

Since then, the case has occasionally veered into farce, with the New Zealand prime minister having to apologize for the country’s security services illegally spying on Dotcom, and a judge having to step down from the proceedings after describing the U.S. as “the enemy”.

All the while, Dotcom has maintained that Hollywood lobbyists were behind the raid and arrests. He reiterated and expanded upon these claims in the white paper released on Tuesday, verbosely entitled “Megaupload, the Copyright Lobby and the Future of Digital Rights: The United States vs You (and Kim Dotcom).”

The document highlights ties between U.S. vice president Joe Biden and Chris Dodd, the head of the Motion Picture Association of America (the MPAA, Dotcom’s bête noir), describing the whole affair as a “contract prosecution” linked to campaign contributions. It calls on the U.S. House Committee on Oversight and Government Reform and the Office of Professional Responsibility of the U.S. Department of Justice to “conduct an investigation and hearings into the conduct of the Megaupload prosecution by the U.S. Department of Justice.”

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Quicksilver Resources is withdrawing its IPO due to the weak prices of natural gas liquids and as it had sold 25 percent of its Barnett Shale holdings to Tokyo Gas Co, writes Reuters. Quicksilver unveiled IPO plans last year, but held back due to weak market conditions.

Reuters – Quicksilver Resources Inc reported a loss for the fifth straight quarter due to weak prices for natural gas liquids, and said it would withdraw the $250 million initial public offering of a master limited partnership (MLP).

The MLP held proved reserves of 430.4 billion cubic feet of natural gas equivalent in the Barnett Shale in Texas.

Quicksilver said it was withdrawing the IPO due to the weak prices of natural gas liquids and as it had sold 25 percent of its Barnett Shale holdings to Tokyo Gas Co. ID:nGNXUXSPAa]

Quicksilver unveiled IPO plans for the MLP last year, but held back due to weak market conditions.

Many energy companies have turned to tax-efficient corporate structures called MLPs, which rely on easy access to capital markets to fund growth. Such partnerships are typically made up of assets such as pipelines or long-lived oil and gas fields that generate steady cash flows.

Weak prices for natural gas have weighed on producers for well over a year, prompting them to search for liquids such as propane and crude oil.

However, the prices of oil and natural gas liquids have also dipped in the recent past.

Average realized prices for natural gas liquids, including hedging, fell 36 percent for Quicksilver in the first quarter.

The company’s production fell 5 percent to 357.5 million cubic feet of natural gas equivalent per day (mmcfe/d), led by a sharp drop in its oil and natural gas liquids output. Natural gas production fell slightly.

The company expects second-quarter production to fall further to 282 – 288 mmcfe/d.

Quicksilver said first-quarter production from its operations in the Barnett Shale fell in comparison to the fourth quarter due to decreased capital activity.

Debt-heavy Quicksilver has been looking to rope in outside partners to fund drilling and improve its liquidity position. The oil and gas producer has been looking for other joint venture options in the Barnett Shale as well as in the Horn River basin in British Columbia.

The company said on Tuesday it had amended its credit agreements on April 30, resulting in “a decreased borrowing base, relaxed financial covenants and additional flexibility to support it efforts to reduce leverage.”

The company had $1.6 billion in net debt as of April 30, more than three times its market capitalization of $462.2 million.

Adjusted loss for the first quarter was 4 cents per share. Analysts were expecting the company to post a loss of 1 cent per share, according to Thomson Reuters I/B/E/S.

Net loss was $59.7 million, or 35 cents per share. Net loss in the year-ago period was $212 million, or $1.24 per share. The company said it had restated its results for the year-ago quarter.

Revenue for the quarter fell more than 20 percent to $132.6 million, and missed analysts’ expectations of $147.66 million.

Quicksilver shares, which have fallen 40 percent in the past one year, were down 1 percent on Tuesday at $2.64 on the New York Stock Exchange.

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Online food delivery business Foodpanda has raised $20 million to continue expanding its delivery service worldwide. The startup emerged out of Berlin-based accelerator Rocket Internet and this round was led by Investment AB Kinnevik and Phenomen Ventures. Foodpanda is based in Berlin.

VentureBeat – Online food delivery is a competitive space, with numerous startups trying to edge out the competition.

Foodpanda, based in Berlin, has raised $20 million to continue expanding its delivery service around the globe. In the past few months, Foodpanda and its affiliated brand hellofood entered 15 new countries, and it’s now active in 27 different markets. It also released iPhone and Android apps. This funding will fuel that growth and support Foodpanda’s quest to become the dominant global food delivery service.

The company operates like Seamless or GrubHub. Customers enter their city and browse through delivery options in that region. Before ordering, they can check out ratings, estimated delivery time and fees, look through the menu, and then place the order online. The approach is not only convenient for customers, but also helps restaurants increase their sales and distribution.

There is a massive market for the taking here, and Foodpanda is not the only one trying to capitalize on the opportunity. Foodpanda faces competition from fellow food delivery startups Delivery Hero (also based in Berlin) and London-based Just-Eat, which have each raised over $100 million in venture capital. However, these companies are active in 12 and 14 countries respectively, with a focus on Europe. Foodpanda’s focus is on emerging markets in South America, Asia, Africa, and Eastern Europe, and in a statement issued this morning, the company said it is the leading food delivery app in most of these areas.

This financing will support Foodpanda as it adds more restaurants, countries, and customers into its systems. The startup emerged out of Berlin-based accelerator Rocket Internet, and this round was led by Investment AB Kinnevik and Phenomen Ventures. Foodpanda is based in Berlin.

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Apollo Global Management‘s cornerstone investors and two of its founders are selling a slice of their shares, writes Reuters. Cornerstone investors Abu Dhabi Investment Authority and California Public Employees’ Retirement System, which invested a combined $1.2 billion in Apollo in 2007, have each registered to sell stakes currently worth up to $203.4 million, writes Reuters.

Reuters – Apollo Global Management LLC’s (APO.N) cornerstone investors and two of its founders are selling a slice of their shares, demonstrating how going public makes it easier for dealmakers at alternative asset managers to cash out on their holdings.

Cashing out, even in part, can be a sensitive issue among some private equity investors, who pay attention to how much fund managers earn and how they are remunerated because their interests are best aligned when both sides make a lot of money when deals work out. Part of how much fund managers make and their long-term commitment to the firm hinge on their ownership.

Cornerstone investors Abu Dhabi Investment Authority (ADIA) and California Public Employees’ Retirement System (CalPERS), which invested a combined $1.2 billion in Apollo in 2007, have each registered to sell stakes currently worth up to $203.4 million, a Tuesday filing with the U.S. Securities and Exchange Commission showed.

Marc Rowan and Joshua Harris, who together with Chief Executive Leon Black founded Apollo in 1990, have registered to sell stakes currently worth up to $120.1 million and $60.1 million respectively, the filing shows.

The stock sales, which in total amount to up to 24.3 million shares or about 6.5 percent of Apollo’s total equity, come as Apollo’s shares ended trading on Tuesday near an all-time high, buoyed by the rising value of its funds and asset sales that have allowed it to boost dividends.

Apollo went public in March 2011, following stock market flotations by peers Blackstone Group LP (BX.N) in 2007 and KKR & Co LP (KKR.N) in 2010. Although its founders face restrictions on when they can sell shares, the initial public offering has made it easier for them to cash out should they wish to do so.

Rowan, 51, and Harris, 48, took $114.5 million apiece in 2012 dividends thanks to their individual 15.8 percent stakes in Apollo.

If their ownership is reduced significantly, they will get less of the profits when deals work out for their investors, though this is not immediately on the horizon as their planned share sales will only reduce their stakes marginally to as low as 14.6 percent and 15.2 percent respectively.

Rowan, Harris, Black and other Apollo employees have committed a combined $1 billion of their own money to the company from its inception through the end of last year.

An Apollo spokesman declined to comment on behalf of Rowan, Harris and the firm.

Still the sales may focus the minds of investors on future share sales. The registration of shares for sale on Tuesday was possible because a two-year lock-up on Apollo’s partners for selling up to 7.5 percent of their equity expired in March 2013. Rowan registered on Tuesday to sell all of the equity he was allowed to do so while Harris used about half of his allowance.

The next lock-up, that applies to 15 percent of the equity, expires in March 2014. Following the expiration of two more lock-ups, Apollo’s dealmakers will be allowed to sell all their stakes by March 2017. Black, who is Apollo’s largest shareholder with a 24.9 percent stake, did not register to sell any of his shares on Tuesday. Nine other Apollo partners and one Apollo director did.

A lock-up also applies to the stakes of ADIA and CalPERS. On Tuesday they each registered to sell up to a quarter of their 8 percent stakes in Apollo. Following the expiration of two more lock-ups by March 2017 they will also be allowed to sell all of their stakes.

Apollo had $114.3 billion of assets under management as of the end of March. Its assets include corporate loans and bonds, private equity investments and real estate holdings.

Rowan and Harris each had an estimated net worth of $2.1 billion as of the end of March, according to Forbes. Black was worth $4.3 billion.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc, Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co and Morgan Stanley & Co LLC are acting as joint book-running managers for the offering. The co-managers for the offering are Bank of America Merrill Lynch, Barclays Capital Inc, Deutsche Bank Securities Inc, UBS Securities LLC, Wells Fargo Securities, LLC and Apollo Global Securities LLC.

(Reporting by Greg Roumeliotis in New York; Editing by Edwina Gibbs)

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China Mengniu to pay $410 mln for stake in KKR’s Modern Dairy
China Mengniu Dairy Co Ltd‘s deal to buy a $410 million stake in China’s largest unpasteurised milk producer is a strategic move to rebuild trust after a series of scandals left local brands’ reputations in tatters, writes Reuters. Mengniu said on Wednesday it would buy 26.92 percent of China Modern Dairy Holdings Ltd from private equity firms KKR & Co LP and CDH Investments.

Reuters – China Mengniu Dairy Co Ltd’s deal to buy a $410 million stake in China’s largest unpasteurised milk producer is a strategic move to rebuild trust after a series of scandals left local brands’ reputations in tatters.

Mengniu, twice hit by accusations it sold tainted milk, said on Wednesday it would buy 26.92 percent of China Modern Dairy Holdings Ltd from private equity firms KKR & Co LP and CDH Investments. The deal will lift Mengniu’s stake in China Modern to about 28 percent.

For Mengniu, whose liquid milk products rank first in China by sales volume, the purchase is an attempt to ensure control over its milk supplies and win confidence among consumers in a market that is growing at about 20 percent a year.

For KKR, the storied New York private equity firm, the deal is another lucrative transaction following its relatively late arrival in Asia in 2007. After Modern Dairy’s 2010 IPO and the current deal, KKR will have almost tripled its original investment, according to a person with direct knowledge of the matter.

“It is a deal which benefits all parties, of which the private equity funds are seen to be the biggest winner,” Sunwah Kingsway Group Research analyst Steve Chow said.

“Chinese dairy products makers are racing to secure reliable and high-quality raw milk sources, in particular from overseas.”

Mengniu’s main competitor, Inner Mongolia Yili Industrial Group, has gone overseas to secure quality milk. It was granted approval to build an infant milk formula plant in New Zealand last month.

DISCOUNT MILK

Headquartered in China’s eastern province of Anhui, Modern Dairy sells almost all its raw milk products to Mengniu.

The HK$2.45 per share purchase price is a 12.1 percent discount to Modern Dairy’s previous closing price – a rarity in M&A where acquisitions usually come with a roughly 25 percent premium.

Modern Dairy’s share price has soared since the end of last year, from HK$2 to HK$2.79 at Tuesday’s close. Speculation about talks between Mengniu and Modern Dairy first surfaced in last August.

“The increase of Mengniu’s stake in Modern Dairy is to secure both quality and quantity of raw milk sources,” Sun Yiping, chief executive officer of Mengniu said in a press release.

Shares in Modern Dairy fell nearly 12 percent to HK$2.46 on Wednesday, while Mengniu Dairy’s stock rose 1.6 percent. The Hang Seng index was 0.62 percent higher in intra-day trade.

Standard Chartered said in a research note that part of KKR’s rationale for accepting a discount was to build a long-term relationship with COFCO, the state-owned enterprise which is the top shareholder in China Mengniu.

In addition, KKR has already earned a “quite reasonable” return on its investment, the bank added.

KKR and China-focused private equity firm CDH bought stakes in Modern Dairy after the country’s milk industry was battered by a 2008 scandal involving chemical-laced products. KKR paid $150 million in cash for a 34.5 percent stake, which it sold down to 24 percent after Mengniu’s 2010 IPO. CDH paid $50 million for its holding.

Mengniu was one of about 20 companies implicated in that scandal, when the lacing of milk with the industrial chemical melamine killed at least six children and sickened nearly 300,000 people. The company now says that enhancing the quality of its milk supplies is a key focus for management.

Mengniu teamed up with Danish-Swedish dairy group Arla Foods in June last year to develop dairy products in China, in another bid to regain consumer confidence.

But late last year Mengniu apologised after a government quality watchdog found that some of its products contained aflatoxin, a substance produced by food fungus that can cause severe liver damage, including liver cancer.

It is not alone in facing quality-control problems. China’s Bright Dairy & Food Co Ltd recalled batches of sour milk in September last year after it received hundreds of customer complaints, while Inner Mongolia Yili Industrial Group recalled baby formula tainted with “unusual” levels of mercury in June.

China’s dairy market is still relatively young, with consumption of dairy products growing at an annual compound rate of 20 percent, a stark contrast to U.S. and European markets where demand has been shrinking in the past decade.

STOCKSM&AMARKETSMUTUAL FUND CENTERET

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