What companies are finding funding or having a big exit? From startup investments to grants to acquisitions, Dallas Innovates tracks what’s happening in North Texas money every Thursday. Sign up for our e-newsletter to stay in the loop.

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Alex Edwards and Payton Potter collaborated on this report.

TECH SALES

Fossil Group sells smartwatch technology to Google

Tech giant Google has bought Richardon-based Fossil Group’s smartwarch technology, as well as the research and development division that created it, in a deal valued at about $40 million. the Verge reported.

Fossil will transfer the portion of its research and development team that is responsible for the technology, allowing Google to have a dedicated team with hardware experience that will work on its WearOS software platform, as well as possibly new smartwatch designs, the website said.

Wareable said that the tech is a “new product innovation that’s not yet hit the market,” quoting Greg McKelvey, Fossil’s EVP of strategy and chief strategy and digital officer.

“Wearables, built for wellness, simplicity, personalizaiton, and helpfulness, have the opportunity to improve lives by bringing users the information and insights they need quickly, at a glance,” Stacey Burr, president of product management for Google’s WearOS platform, said.

GameStop closes on $700M sale of AT&T Wireless stores

Grapevine-based GameStop announced that it has closed on the $700 million sale of its 1,284 AT&T Wireless stores to Sugar Land-based Prime Communications.

The sale was announced the day before Thanksgiving.

GameStop said it would use the money to pay down some of it $800 million in debt, buy back, stock, reinvest in its two core businesses —games and collectibles — or some combination of those options, The Dallas Morning News reported. 

INVESTMENTS

Alto announces $14.5M for on-demand ride service

In October, 2018, we told you all about the inventive ride-hailing startup Alto. 

Today, it announced it’s entering the market with $14.5 million raised in two rounds of funding from several partners including Road Ventures and Frog Ventures. Alto is slated to kick off another round of funding this spring to fuel growth and expansion.

Form D: Lantern Pharma raises $535,000

Dallas-based Lantern Pharma, a Biotechnology company, has raised $535,000, according to a filing. 

Lantern Pharma, Inc., is a “clinical stage pharmaceutical company developing new classes of precision cancer drugs with novel mechanisms of action for the treatment of unmet cancer needs,” according to its website. The company uses technologies like RADR and AI in the development of cancer treatments.

Dallas eyecare company gets investment from J.P. Morgan 

Riata Capital Group has announced that its portfolio company, Dallas-based Acuity Eyecare Group, has recieved an equity investment from J.P. Morgan Asset Management in support of growth and expansion. Financial terms of the investment were not released. 

The investment was substantial, and it positions Riata to fulfill its goal of adding 200-300 locations to Acuity’s portfolio, according to PE Hub.

Prior to the investment, Acuity—an owner and operator of U.S. optometry practices—acquired two regional eyecare groups, adding to its nearly 90 locations across 8 states. Acuity anticipates it will exceed 100 locations by early 2019.

“We are excited to have J.P. Morgan Asset Management join us as an equity partner as we continue to build Acuity Eyecare Group into a market-leading eyecare platform,” Jeff Fronterhouse, Managing Partner of Riata Capital Group, said in a statement. “And the addition of ABBA Eye Care and EyeCare Specialties, two medically oriented optometry groups, is a terrific way to finish out a strong 2018 for Acuity Eyecare Group. We look forward to continued growth and expansion in 2019.”

Frisco Music City gets $3.9 million

The plan approved by Frisco officials last year called Frisco Music City has raised $3.9 million from outside investors, according to a filing.

Intended to be housed near the Cowboys’ Star, the new music venue is expected to be made up of an indoor theater, outdoor stage, and restaurant.

Frisco’s Quest Events raises undisclosed amount

Frisco-based Quest Events, a leader for drapery solutions and other products including modular furniture, scenic elements, décor, and accessories in the events industry received last week an undisclosed amount in a strategic investment from private equity firm TZP Capital Partners III, L.P.

Quest Events’ founder, Lee Dunlap, said the funding will help it maintain its dedication to quality rental merchandise, customer service, and providing drapery.

“We are thrilled about our investment in Quest and partnership with a terrific management team,” TZP partner Vlad Gutin said in a statement. “We look forward to building on the Company’s impressive track record and solidifying Quest’s leadership position by supporting the Company’s continued organic growth and strategic acquisition efforts.”

Paravest Capital raises $7.5 million

Paravest Capital, a Dallas-headquartered privately-owned real estate investment firm, has raised $7.5 million for a project in Fort Worth, according to a filing.

The real estate project is a 215,000-square-foot retail development called the Shops at Chisholm Trail Ranch. The center, located on the corner of Chisholm Trail Parkway and McPherson Road in Fort Worth, is estimated to include 1M square feet of retail space, 1,000 residential units, and eight retail pad sites, according to Bisnow. The space is currently around 70 percent pre-leased.

The project is expected to be completed in 2020.

Knock closes Series B, raising $400M in equity and debt financing

Knock, a New York/San Francisco-based residential real estate startup, has raised $400 million in a Series B equity and debt financing, led by Foundry Group. The company says it plans to use the funding to continue a national expansion and to advance development of its proprietary technology.

Last year, we told you about Knock when it moved into Dallas-Fort Worth.

The company’s based on a Home Trade-In platform that offers a painless process of a seamless swap: Knock will buy your new house and allow you to move in, before ever even listing your old one. The system is based on buying and selling with certainty, convenience, and cost-effectiveness, which the company thinks will essentially create a world where consumers can trade in their home as easily as they trade in their car.

Knock has experienced rapid growth with its unique platform, launching in five markets since founding. In 2018 alone, Knock says it helped 2,000 people trade-in their homes.

“At Knock we believe the only way to revolutionize the real estate industry is by addressing both home buying and selling, given 71% of consumers are doing both at the same time, which is why we’re creating a marketplace solution with our Home Trade-in platform,” said Sean Black, Co-founder and CEO of Knock, in a statement. “As we celebrate the success of the Trade-in with this latest round of funding, we are excited to have found investors and partners in Foundry Group, which has successfully helped other marketplace companies like Rover and Havenly scale platforms that transform traditional industries for a better, technology-powered consumer experience.”

INVESTMENTS

Keurig Dr Pepper Invests in LifeFuels, innovative beverage maker

Virginia-based LifeFuels, the maker of a portable beverage maker, announced last week that it had raised an undisclosed amount in Series A Funding form Plano’s Keurig Dr Pepper.

The partnership, Finsmes reports, aims to speed the growth of LifeFuels’ product, which pioneers a tech-packed bottle, multi-serve concentrates called FuelPods, and an app that tracks health goals.

LifeFuels’ pods meet a variety of health needs including pre-workout, exercise recovery, energy, and sleep.

Trive Capital Holdings invests in California Brazing

In December, Dallas-based private equity firm Trive Capital Holdings made an investment in California Brazing, a Newark, California, based company that specializes in CNC machining, metallic and ceramic vacuum brazing, and heat-treating services for both OEM and Tier 1 defense and military communication customers, a release stated.

“California Brazing’s unique value proposition and recent investment in new capacity and capability has resulted in tremendous growth. We look forward to continuing this momentum and chose to partner with Trive based on their knowledge in the sector, operational approach and shared vision for the future. Our mission is to deliver best-in-class services and support to our customers, which we believe will be further enhanced with the Trive partnership,” California Brazing President & CEO Rich Penrose said in a statement.

No financial terms were disclosed in the deal.

Dallas-based TXV Partners targets $50M for its debut fund

The Dallas area in December got a new venture capital firm raising $50 million for early-stage investments.

TXV Partners, a millennial-run venture capital firm with offices in Dallas and Austin, is working to raise $50 million to invest in younger startups that offer services to a younger, tech-savvy generation.

They’ve already invested in one company, an Austin-based blockchain music platform called Matter Music, TechCrunch reported.

“We’re young, black and in Texas,” TXV Partners co-founder Brandon Allen told TechCrunch. “We’re trying to do it differently. We wanted to really see if we can redefine the VC model from the bottom up. It’s important for Texans, for African Americans and for millennials.”

MERGERS & ACQUISITIONS

Zix Corp. to buy cybersecurity firm in $275M deal

In an acquisition intended to accelerate dramatic growth, Dallas’s Zix Corporation has entered an agreement to pay $275 million to purchase Florida-headquartered AppRiver. The transaction is expected to close in the first quarter.

Financing the deal is $100 million from True Wind Capital, a private equity firm, and $175 million in the form of a loan from KeyBanc Capital Markets and SunTrust Bank. Zix says it is anticipating the purchase to double its annual revenue to $200 million by the end of the year.

“Overall, this acquisition provides Zix with a more robust platform to further expand our growth and profitability,” David Wagner, president and CEO of Zix, said in a statement. “We’re combining two email security companies that can drive great synergies and higher growth together by leveraging Zix’s superior product delivery and AppRiver’s exceptional customer service and support.”

Zix provides various security technology services, like email encryption, email data loss prevention, and mobile applications. AppRiver is a provider of cloud-based productivity and cybersecurity services.

CR3 Partners partners with OverlayAnalytics to expand service offerings

CR3 Partners has announced it was the lead investor in a funding round for OverlayAnalytics in a press release. Both companies are Dallas-based.

“OverlayAnalytics complements our service offerings; their deep knowledge and experience in the corporate finance arena, combined with their technology platform, provides a turn-key method to uncover and analyze business performance,” said William Snyder, co-founder of CR3 Partners, in a statement. “This speed to insight is absolutely invaluable, and we are excited about the future of this partnership.”

CR3 is a national turnaround management consulting firm intended to improve performance of organizations and stakeholders following transition, opportunity, or distress.

OverlayAnalytics is a cloud-based data analytics firm that uses technology to turn data into actionable visualizations and automated reports to give real-time business insights. Currently, OverlayAnalytics says it’s working with a variety of industries to “reduce the reporting burden of management teams and shorten their response time to enact change, as well as with private-equity firms to help them monitor and analyze portfolio-company performance in real time.”

“We’ve seen an increase in demand from companies that understand the value of managing their business with real-time data. Our partnership with CR3 allows us to expand our capacity to deliver a quality platform with a partner that has a reputation for driving profitability for its clients,” said Tommy Shuey, co-founder of OverlayAnalytics.

Improving acquires Innovative Architects

Improving, a Dallas-based technology consulting firm, has acquired Atlanta, Georgia-headquartered Innovative Architects, a provider of customized technology solutions for enterprises. No financial terms were disclosed.

The deal is expected to increase Improving’s annual revenue by more than 30 percent this year, bringing the company’s collective revenue to around $100 million. Improving says the transaction is a continuation of its innovative business model that merges technology service companies with their shared vision, called the ‘Enterprise Strategy.’ Improving welcomes Innovative Architects as its seventh enterprise location.

A Florida automotive group acquires seven franchises in Dallas

The Ed Morse Automotive Group, a Delray Beach, Florida-headquartered family-owned automotive dealer, this week announced that it has purchased seven Dallas dealerships from Roundtree Automotive Group.

The acquisition will grow Ed Morse’s dealership count to 16, franchises to 22, and automotive brands to 13. It will also add 260 new employees to the growing 900.

This is the company’s first expansion outside of Florida.

“Dallas is a market that we’ve coveted for a long time and look forward to establishing our trusted family name in such an important region,” said Teddy Morse, chairman and CEO of Ed Morse Automotive Group, in a statement. “We are looking not only to continue these dealerships’ history of great deals and outstanding customer service, but to make significant capital improvements. We also look forward to supporting the local community with job growth and giving back to local non-profits.”

PSAV to acquire Encore Event Technologies from The Freeman Company

Dallas-based The Freeman Company has entered a purchase agreement for PSAV, a global leader in creating event experiences, to acquire Encore Event Technologies. The two companies released the transaction in a joint announcement. Terms of the deal were not disclosed.

The companies predict the deal will be finalized later this year.

Encore Event Technologies works with resorts, hotels, casinos, and creative production companies to provide event technology, staging, and production services. PSAV said that by joining with Encore, it can expand its capabilities in the meeting industry throughout North America and Asia Pacific.

“Encore is an ideal partner for the PSAV family of companies given its shared commitment to meeting and event planners, and strong alignment with our purpose and mission,” said Mike McIlwain, CEO of PSAV, in a statement. “I am excited about what this means for PSAV, and more importantly our customers, as we continue to focus on more ways to create amazing event experiences wherever an event is held.”

The Freeman Company, a family-owned creator of meaningful connections for audiences, owned Encore Event Technologies. CEO Joe Popolo said that following the sale, Freeman is going to continue its mission of “providing powerful brand experiences” for its corporate customers across the globe.

“It has been an honor to lead and develop Encore and to witness its growth,” said Ken Sanders, chief development officer of The Freeman Company, in a statement. “I want to thank everyone at Encore for applying their work, skills, dedication and creativity to build this world-class company, and I look forward to watching their continued prosperity as part of PSAV.”

Eldercare Insurance Services joins Integrity Marketing Group

Integrity Marketing Group, a nationwide distributor of life and health insurance products, has acquired insurance marketing organization Eldercare Insurance Services, Inc. Financial terms were not disclosed.

Headquartered in Dallas, Integrity Marketing Group serves millions of clients with its over 400 employees. As part of the deal, Eldercare’s 60 employees will continue working in Eldercare headquarters in Hot Springs, Arkansas.

Eldercare is known for its network of independent agents, insurance products, sales distribution, and internal call center. In 2018, according to a release, the company placed over $60 million of annualized premiums.

The deal is intended to help accelerate rapid growth by using the resources and practices of Integrity partners.

“As someone who literally grew up in the business, I can see exactly how joining Integrity will take us to new heights through access to more products, agent services and other resources,” said John Bettis, President of Eldercare, in a statement. “There’s no limit to what we can achieve together. Integrity’s proven track record of unburdening agencies from the day-to-day distractions of running a business through their shared service platform will allow us to serve more agents and sell more products. I wish we had joined Integrity sooner.”

Generex Biotechnology acquires Dallas’ Medisource Partners 

Generex Biotechnology, a company that develops and commercializes drug delivery systems and technologies, has announced it has entered into a letter of intent to acquire Medisource Partners.

Medisource Partners is a FDA-registered distributor of medical and surgical products.

Under the terms of the deal, Generex will acquire all of Medisource’s assets, including business operations, accounts receivable and inventory, contracts, and real estate, on a debt free basis, for one million dollars worth of Generex stock, plus additional cash and stock consideration, according to a release.

VSE Aviation acquires 1st Choice Aerospace for $112M

Carrollton-based VSE Aviation, a subsidiary of privately-owned aviation supply chain management company VSE, announced it has acquired 1st Choice Aerospace for $112 million paid in cash at closing.

1st Choice Aerospace is also a privately-owned aviation supply chain management company. It had revenues of $29 million in 2017 and estimated revenues of $47 million in 2018.

The deal also included potential post-closing payments of up to $40m when 1st Choice crosses some performance thresholds during 2019 and 2020, a release stated.

“We believe that our acquisition of 1st Choice will significantly broaden our client base and further extend our thrust into the commercial aerospace supply chain market,” VSE Aviation president Paul Goffredi said in a statement. 

READ NEXT

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