Oct 23, 2018

Axios Pro Rata

By Dan Primack
Dan Primack

Hey Los Angeles: Please join Axios' Ina Fried, the Chan Zuckerberg Initiative's David Plouffe, and local leaders this Thursday for a lunchtime discussion about solutions to California's housing crisis. RSVP here.

Top of the Morning
SoftBank's Masayoshi Son. Photo by VCG/VCG via Getty Images.

SoftBank CEO Masayoshi Son will not speak at the Future Investment Initiative event in Riyadh, which kicked off earlier today, according to The Wall Street Journal.

Why it matters: Nearly half of SoftBank's $100 billion Vision Fund comes from Saudi Arabia's Public Investment Fund, and expectations are the same would be true for a second Vision Fund.

  • Masa's decision comes after more than a week of SoftBank "monitoring" the situation, while most other big business leaders pulled out much earlier over the murder of Jamal Khashoggi.
  • SoftBank COO Marcelo Claure and the CEO of British chipmaker Arm, owned by SoftBank, also both bailed yesterday.

But, but, but: Still no official statement nor confirmation from SoftBank, and that same WSJ story cites an event spokesman as saying that Masa "may still attend the Future Investment Initiative on the sidelines." Plus, Vision Fund's Saleh Romeih did speak on stage today as part of a panel discussion.

The bottom line: Masa and SoftBank have developed a reputation for being bold. In this case, they've been timid.

More from Riyadh, per Reuters: "Saudi Arabia is set to sign deals worth more than $50 billion on the opening day in the oil, gas, industries and infrastructure sectors with firms such as Trafigura, Total, Hyundai, Norinco, Schlumberger, Halliburton and Baker Hughes."

Bank central: Axios' Jonathan Swan reported on Sunday that there is increasing skepticism on Capitol Hill that Trump nominee Nellie Liang will be confirmed to the Fed's board of governors, namely because she's a Democrat who opposed recent GOP relaxation of certain Dodd-Frank rules.

  • Larry Kudlow last week told Fox Business that Fed chairman Jay Powell "is having a bit of a revolution at the Fed." The White House declined to explain what Kudlow was talking about.

Canary watch, per The Bank of England: "The global leveraged loan market is
larger than—and growing as quickly as—the U.S. subprime mortgage market
was in 2006."

🎧 Pro Rata Podcast: Our latest episode leads with a "carbon price" referendum on the ballot next week in Washington State, and how the uncertain outcome could determine how U.S. states choose, or don't choose, to combat climate change. Listen here.

The BFD
Source: Giphy

Constellation Brands (NYSE: STZ) hired Goldman Sachs to find a buyer for some of its U.S. wine brands, which could fetch more than $3 billion, per Reuters.

  • Why it's the BFD: Because this reflects a growing conventional wisdom that younger alcohol consumers prefer beer, craft spirits and cannabis-infused products over wine. It's also notable that Constellation actually began life as a winemaker back in 1945, but did sell off its Canadian wine business for around $1 billion back in 2016.
  • Bottom line: " Among the wine brands that Constellation is considering selling are Clos du Bois, Mark West, Arbor Mist and Cooks, one of the sources said. Collectively, Constellation could sell wine brands that generate 12-month earnings before interest, tax, depreciation and amortization of more than $260 million, according to the sources." — Harry Brumpton & Joshua Franklin, Reuters
Venture Capital Deals

🚑 Synthego, a Redwood City, Calif.-based genome engineering platform, raised $110 million in Series C funding. Founders Fund led, and was joined by return backers 8VC and Menlo Ventures. www.synthego.com

Beisen, a Chinese provider of human resources SaaS, raised over $100 million in Series E funding from Matrix Partners, Genesis Capital and Sequoia Capital China. http://axios.link/JesO

BMKP.com, a Chinese ride-hail company, raised $43 million from local firm QJY Capital. http://axios.link/vptt

🚑 Qpex Biopharma, a San Diego-based startup focused on antimicrobial resistance, launched with $33 million in Series A funding. NEA led, and was joined by Adams Street Partners, LYZZ Capital, Hatteras Venture Partners and Stanford University Draper Fund. http://axios.link/5uVR

Filld, a Mountain View-based mobile fuel delivery startup, raised $15 million in Series B funding. Parkland Fuel and Calibrate Ventures co-led, and were joined by return backers Cendana Capital, Lucas Venture Group, Javelin Venture Partners and Hallador Investment Advisors. www.filld.com

Dingding Fresh Food, a Chinese provider of fresh food supply chain solutions, raised $14 million in Series A funding from Hidden Hill Capital, GSR Ventures and Toutou Shidao Investment Fund. http://axios.link/B3iu

Finn AI, a Canadian developer of conversational AI for banking, raised US$11 million in Series A equity and debt funding. Yaletown Venture Partners and Flying Fish Partners co-led, and were joined by BDC Capital and 1843 Capital. www.finn.ai

Cowboy, a Belgian maker of smart bicycles, raised €10 million in Series A funding. Tiger Global Management led, and was joined by return backers Index Ventures and Hardware Club. http://axios.link/gZry

WiredScore, a New York-based rating system for digital connectivity in commercial buildings, raised $9 million in Series A funding from Bessemer Venture Partners, Fifth Wall, Sterling.VC and leading global commercial real estate investors including Legal & General, KingSett Capital, U+I, Town Centre Securities, MOMENI Digital Ventures, and Savitt Partners. http://axios.link/udtT

Wallarm, a South San Francisco-based application security startup, raised $8 million in Series A funding. Toba Capital led, and was joined by Partech, Gagarin Capital and YC. http://axios.link/Fn4E

Synthetic Minds, a San Francisco-based developer of infrastructure for blockchain smart contracts, raised $5.5 million in seed funding from Khosla Ventures and Pantera Capital. http://axios.link/b4tA

Minds, a New York-based crypto social network, raised $6 million in Series A funding from Medici Ventures, a blockchain subsidiary of Overstock.com. http://axios.link/ZuU6

Ruths.ai, a Houston-based provider of service and productivity efficiency software for oil and has operators, raised an undisclosed amount of growth equity funding from SCF Ventures. www.ruths.ai

Tala, a Santa Monica, Calif.-based provider of “mobile-first financial services for underserved consumers,” raised an undisclosed amount of funding from PayPal. http://axios.link/HYkX

Private Equity Deals

Apollo Global Management made an $11 billion takeover offer for aluminum parts maker Arconic (NYSE: ARNC), per Reuters. A rival consortium, which includes Blackstone and Carlyle, has not yet made an official bid. http://axios.link/h49l

Authority Brands, a Columbia, Md.-based portfolio company of Apax Partners, acquired ASP, a Macon, Ga.-based swimming pool service franchisor. www.asppoolco.com

🚑 BGH Capital has made a new A$4.1 billion takeover offer for Australian hospital operator Healthscope (ASX: HSO), after having been rejected earlier this year, per Bloomberg. http://axios.link/5A0F

🚑 Clearlake Capital agreed to buy Symplr, a Houston-based healthcare governance, risk and compliance SaaS company, from Pamlico Capital and The CapStreet Group. www.symplr.com

Dyal Capital has acquired a minority stake in the management company of private equity firm American Securities. http://axios.link/A984

Silver Lake is moving around $1 billion of exposure to Dell Technologies from its third flagship fund to its fifth, which was formed last year, per Bloomberg. The rest will be put into a SPV owned by limited partners in Silver Lake III. http://axios.link/TriQ

Stellex Capital Management acquired Custom Glass Solutions, a Worthington, Ohio-based maker of large-format glass products used in vocational and recreational vehicles, from Guardian Glass, a subsidiary of Koch Industries. www.rvglassparts.com

Veronis Suhler Stevenson acquired a minority stake in GreenSlate, a New York-based provider of accounting and payroll software for the entertainment industry. www.gslate.com

Weller Equity Partners acquired Mirac, a Lynchburg, Ohio-based electronics assembly and fabrication company. www.miracinc.com

Public Offerings

🚑 Axonics Modulation Technologies, an Irvine, Calif.-based developer of minimally-invasive sacral neuromodulation, set IPO terms to 6.7 million shares at $14-$16. It would have a fully-diluted market value of around $278 million, were it to price in the middle. The company plans to trade on the Nasdaq (AXNX) with BofA Merrill Lynch as lead underwriter, and raised over $140 million from firms like Andera Partners (14.44% stake), Longitude Venture Partners (12.88%), Gilde Healthcare (12.16%), Advent Life Sciences (9.09%), NeoMed (8.1%), Legend Capital, Edmond de Rothschild Investment Partners and Cormorant Asset Management. www.axonicsmodulation.com

More M&A

CoreLogic (NYSE: CLGX) agreed to buy Symbility Solutions (TSX: SY), a Canadian insurance software company in which it already held a 28% stake, for an enterprise value of around C$160 million. http://axios.link/zvXf

🚑 FSD Pharma, a listed Canadian medical marijuana company, agreed to buy Israel’s Therapix Biosciences for $48 million in stock. http://axios.link/CoRQ

🚂 ITE Rail Fund agreed to buy American Railcar Industries (Nasdaq: ARII), a St.. Charles, Mo.-based hopper and tank railcar manufacturer majority-owned by Carl Icahn, for $1.75 billion, or $70 per share (51% premium to Friday’s closing price). http://axios.link/yxVT

🚑 Johnson & Johnson (NYSE: JNJ) agreed to buy Japanese skincare company Ci:z Holdings (Tokyo: 4924) for around $2.05 billion in cash. http://axios.link/tQ8A

🚑 Providence Service Corp. (Nasdaq: PRSC), a Stamford, Conn.-based provider of non-emergency medical transportation services with a market cap just south of $900 million, is seeking a buyer, per Reuters. http://axios.link/vlip

Fundraising

🚑 Catalyst Health Ventures is raising $100 million for its fourth fund, per an SEC filing. http://axios.link/pTI0

Thrive Capital raised $1 billion in new capital commitments, including $400 million for its sixth early-stage fund and $600 million for a new growth equity fund. www.thrivecapital.com

It's Personnel

Ernie Bio joined cybersecurity-focused VC firm ForgePoint Capital as a vice president. He previously was COO of the Defense Innovation Unit. www.forgepointcap.com

🚑 Jackie Grant joined VC firm Abingworth as a Boston-based principal. She previously was with SV Health Investors. www.abingworth.com

Ananya Tripathi left Mytra to join KKR Capstone as a director in India. www.kkr.com

Final Numbers: China deals
Source: Thomson Reuters Deals Intelligence

More from Thomson Reuters:

"With a total value of $41.61 billion, China-targeted M&A saw a 30.7% increase compared to the same period last year, the highest first nine months since 2015. Conversely, China outbound deal activity accrued $93.5 billion, a 6.2% decrease from a year ago."
Dan Primack

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