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Innovation Network Corp., a Jamapese public-private investment partnership, has agreed to buy a 40% interest in Swiss meter maker Landis+Gyr for 57.3 billion yen ($711.4 million).

Stanley Black & Decker (NYSE: SWK) has offered to acquire Swedish security company Niscayah for approximately $1 billion in cash. This comes just says after Stanley Black & Decker lost out on the Securitas Direct auction to Bain Capital and Hellman & Friedman.

Meredith Corp. (NYSE: MDP) has agreed to acquire Eating Well Media Group, publishing of a bi-monthly nutrition magazine. No financial terms were disclosed. Eating Well shareholders include Village Ventures, FreshTracks Capital and Boston Community Venture Fund. www.mededith.com

Spark Ventures has sold half its position in Mind Candy Inc., a UK-based online gaming and entertainment company focused on children, at a $200 million enterprise value. No details about the buyer were disclosed. www.moshimonsters.com

Trimaran Capital Partners has sold the parent company of Standard Steel LLC, a Pittsburgh-based maker of steel wheels and axles for use in freight railcars, locomotives and passenger railcars, toSumitomo Corp. No financial terms were disclosed. Credit Suisse managed the process.

Filed under: Term Sheet

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AXA Private Equity has agreed to buy around a 52% stake in France’s Groupe Outremer Telecom (Paris: OMT), a French, for €12 per share from Apax Partners and Outremer’s founding CEO.www.axaprivateequity.com

CCMP Capital Advisors is planning to invest around $50 million of equity into portfolio company Quiznos, in order to help the sandwich chain refinance its debt, according to Bloomberg. The company also plans to offer new debt alongside the equity. www.quiznos.com

Kohlberg Kravis Roberts & Co. and Silver Lake Partners are in talks to buy GoDaddy, an Internet domain-name and hosting company, for between $2 billion and $2.5 billion, as first reported by the WSJ. An announcement is expected early this week. www.godaddy.com

OpenGate Capital has completed its previously-announcec acquisition of Norampac Avot-Vallée, a French maker of packaging materials composed of recycled fibers, from Cascades Inc. (TSX: CAS). No financial terms were disclosed. www.opengatecapital.com

MBK Partners and Vogo Fund may bid in the South Korean government’s $6 billion auction of a 57% stake in Woori Finance Holdings, according to a local press report.

Water Street Healthcare Partners has acquired MarketLab Inc., a Caledonia, Mich.-based direct marketer of healthcare products. No financial terms were disclosed, although Dow Jones puts the equity value at $70 million. www.wshp.com

Filed under: Term Sheet

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Foursquare, a geo-based social network, has raised $50 million in new VC funding. Existing shareholder Andreessen Horowitz led the round, and was joined by Spark Capital and return backers O’Reilly AlphaTech Ventures and Union Square Ventures. TechCrunch reports the pre-money valuation was $550 million. www.foursquare.com

Ivantis Inc., an Irvine, Calif.-based developer of treatments for glaucoma, has raised $17 million in new VC funding from Delphi Ventures and New Enterprise Associates. www.ivantisinc.com

Soluto, a Tel Aviv, Israel-based maker of “anti-frustration” software for PCs, has raised $10.5 million in Series B funding. Index Ventures led the round, and was joined by return backers Bessemer Venture Partners, Giza Venture Capital, and Proxima Ventures. www.soluto.com

Digital Assent, an Atlanta-based provider of a self-service patient check-in and patient education solution, has raised $7.5 million in Series B funding. Sanan Private Equity, the BIP Opportunities Fund and Buckhead Investment Partners were joined by return backers Imlay Investments and BLH Venture Partners. www.digitalassent.com

OneLogin, a Los Angeles-based provider of cloud-based Identity and access management solutions, has raised $1.5 million in Series A funding from existing backer Charles River Ventures.www.onelogin.com

Filed under: Term Sheet

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On Friday, I blogged about Yee Lee, a former Skype employee who is claiming he was swindled out of vested options by both Skype and its private equity sponsors (namely, Silver Lake Partners). To be clear, this is not a legal claim. Upon initial employment, Lee signed an agreement that gave Skype the right to repurchase vested options at effectively no cost, were Lee to voluntarily resign (which he did) or be terminated for cause (which he was not).

I encourage you to read the entire piece, both because it’s far more detailed and because page views make my world go round. But for those who have better things to do, my quick takeaways were:

1. The “you’ve got to be in it to win it” arrangement is fairly common among private equity-backed companies, but foreign to startups (particularly in Silicon Valley). Skype is the former, while Lee is a veteran of the latter.
2. The contract Lee signed is incomprehensible. Seriously. It makes federal legislation read like a Dick and Jane book.
3. Lee was careless in not having a lawyer read over his contract before quitting. At the same time, however, his contract seems intentionally opaque. Moreover, by clawing back Lee’s vested options, the company comes off as petty and vindictive.

I spent part of the weekend reflecting on my post, responding to related emails and reading related blog posts by Felix Salmon, Henry Blodget and Sarah Lacy. To me, the fundamental problem seems is that too large a disconnect remains between venture capital and private equity.

For several years, I’ve felt that these two distinct asset classes are getting closer to one another. Both venture and buyout funds have increased “growth equity” activities. Both now regularly engage in sponsor-to-sponsor transactions (via the growth of VC secondary sales). Fund sizes for top-tier VCs are growing, while fund sizes for top-tier buyout firms are shrinking (not close to parity, but the gap has lessened). Buyout firms understand tech. VC firms understand cash-flow positive businesses. And, as always, they both get fund commitments from the same people at the same institutions.

But a situation like Lee/Skype reminds me that the mentality of both groups remains miles apart. Just because a firm like Silver Lake is based in Silicon Valley and focuses on technology, that doesn’t mean it’s just a larger version of Kleiner Perkins. And just because Andreessen Horowitz is one of the hottest VC firms in the Valley, its investment in Skype doesn’t mean the company will be run like a startup.

That said, both sides must do a better job recognizing the other’s point of view.

Private equity has a model that has worked for decades, and there is a legitimate logic to its typical employee compensation guidelines (which were mostly followed in the Skype situation, albeit not entirely). Here is how one reader put it in an email:

“PE firms typically invest in mature companies with steady revenue streams and a plan to pay down the heavy leverage… Options in a PE investment are not lottery tickets — they are long-term investments in a class of companies with a track record of paying off very well. So why should we let someone who isn’t a long-term player in the company share in that long-term value creation?”

At the same time, however, private equity should adapt to its environment. Would it pay two employees doing a similar job the same amount if one was based in New York City and the other in Little Rock? Probably not. If you are running a Silicon Valley tech company, then you either should follow local custom or make painstakingly clear that you are not doing so (and why). After all, Skype is competing for talent with VC-backed startups (which is what Lee left for).

I don’t believe anyone in this saga was evil. But I do believe there was a tone-deafness that continues with the refusal of any Skype investor to address this matter on-the-record. Pushing it all off onto a Skype spokesman is disingenuous, since these comp rules were prompted by the investors, not the company.

Actually, that leads to one final difference: Private equity firms do not quite understand digital media the way Silicon Valley understands it. Right now, Silver Lake is getting pounded for this situation — and it will reverberate when it looks to hire for other portfolio companies (GoDaddy HR execs cannot be happy right now). It has allowed itself to fall behind the story. If you’re going to invest in the Valley, you’ve got to be cognizant of its news cycles. This should already be yesterday’s news.

Filed under: Term Sheet

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Filed under: Term Sheet

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Prices are zooming in the Bay Area as startups hire and new techies flock to town.

FORTUNE  – Whether we’re living through another tech bubble remains hotly contested, but there’s no denying its impact on one market: rental apartments in San Francisco. With Twitter, Zynga, and numerous other local startups hiring in droves, all those newbies need somewhere to live.

In the trendy SoMa and South Beach neighborhoods, says Paul Hwang of Skybox Realty, there may be up to five applications for every apartment listing. Most places are renting at an average of 10% to 20% higher than just six months ago; a $2,400-a-month one-bedroom can now top $2,700.

“The last couple of years, people were happy to have a job,” says Hwang. “Now all I hear is, ‘I’m going to start my own thing.’ All that can be reflected in rent.”

As a result, the apartment hunt can be even more grueling for prospective residents.

Source: Relocation breakthroughs

Naseem Zojwalla, a New York transplant and senior medical director at Onyx Pharmaceuticals, had four days to find an apartment in SoMa, her neighborhood of choice. She saw 10 apartments — where as many as 10 people showed up for tours — but it wasn’t until someone terminated their lease at The Paramount, a luxury rental apartment building, that Zojwalla landed a 800-square-foot one-bedroom unit for $3,000.

“It was definitely more expensive than I expected,” she recalls.

Don’t expect the situation to change any time soon. In fact, brokers expect tech hiring to further intensify this fall and next spring as companies further ramp up hiring. Maybe the solution is to make sure that every new workspace comes with a very comfy couch.

Filed under: Magazine Content

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If you ask about sales in the quarter that just ended, you get three very different answers

Sources: Apple 2.0 poll, Thomson Financial, Apple Inc.

Apple’s (AAPL) third fiscal quarter of 2011 ended Saturday at midnight. How did it go? That depends whom you ask.

In April, Apple CFO Peter Oppenheimer told analysts he expected Apple to earn $5.03 per share on sales of $23 billion. But given how Apple tends to low-ball its forward-looking guidance, nobody really believed him.

The consensus of nearly four dozen professional analysts, according to Thomson Financial Friday, is that Apple will report earnings of $5.63 on sales of $24.52 billion, up 60% and 52%, respectively, from the same quarter last year.

Over the weekend, we polled our regular panel of amateur analysts and got estimates from nine of them, including Jeff Fosberg of the Apple Finance Board, Bullish Cross‘ Andy Zaky and Asymco‘s Horace Dediu, who came in 1st, 2nd and 5th in last quarter’s earnings smackdown.

The amateur’s consensus for Q3: earnings of $6.64 on sales of $26.6 billion — up nearly 90% and 70%, respectively, year over year.

This marks the third quarter in a row that the amateurs’ revenue estimates were more than $2 billion higher than the professionals’. (See here and here.)

If you’re wondering on whom to put your chips, the amateurs as a group have outperformed the pros every quarter for the past 10. In Q1, they underestimated Apple’s earnings by 1% compared with the pros’ 9% miss. In Q2 they overestimated by 3% while the pros underestimated by nearly 6%.

Filed under: Apple 2.0

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