May 14, 2018

Axios Pro Rata

You're invited: Axios' Mike Allen will interview top White House economic advisor Larry Kudlow tomorrow morning in D.C. RSVP here.

Top of the Morning

Source: Giphy

Rudy Giuliani keeps popping feet into his mouth as if they're Tic Tacs, this time telling HuffPo: "The President denied the [AT&T-Time Warner] merger."

He then walked it back, saying to CNN that Trump "told me directly he didn't interfere."

  • AT&T originally wanted to argue in court that the Department of Justice's decision was influenced by Trump's disdain for Time Warner property CNN, but dropped the issue after being denied access to related documents.
  • June 12 is the expected date for a judicial decision, although it theoretically could come earlier (which Axios' David McCabe tells me in unlikely).
  • Axios' Kim Hart writes that AT&T is facing a Trumpland reality check.
  • WSJ's Holman Jenkins argues that the case's outcome will help determine the country's 5G future.

Breaking: CBS this morning sued majority shareholder Shari Redstone for alleged breaches of fiduciary duty, related to the proposed merger of CBS and Viacom. If successful, CBS could reduce Redstone's preferred holdings (via National Amusements) in CBS from around 79% to 17% — thus preventing her from replacing enough board members to push the merger through.

New fund alert: Crypto company Ripple this morning said that it has formed Xpring Ventures, which will "invest in and support proven entrepreneurs building projects using XRP. No fund size was disclosed, but we're told that its investments will be "denominated" in XRP rather than in dollars.

  • More traditional NFA: Trail Post Ventures has launched as a consumer brand-focused VC firm in San Francisco, co-founded by Nick Mendel (ex-I-banker w/ Piper Jaffray) and Will Schmitt (ex-Beechwood Capital).

Today in Theranos: I just finished an advance copy of Bad Blood, the John Carreyrou-authored Theranos book that formally comes out next week. Its main argument is that fraud was a founding characteristic at Theranos, rather than something that eventually arose due to adverse circumstance.

  • Bottom line: If you've had interest in this saga, you need to read it.

Duopoly destroyer: China's Didi Chuxing, which may beat both Lyft and Uber to the public markets, has received a permit to test self-driving cars on California public roads.

Making copies: Xerox has formally killed its merger with Fujifilm, claiming that the Japanese company didn't deliver audited financials on time. Xerox also says it will be open to new takeover offers, and that CEO Jeff Jacobson is again out (you might recall he was canned and then un-canned).

  • Likely outcomes: Carl Icahn will smile, Fujifilm will sue.

Source: Giphy

GreenSky, an Atlanta-based digital lending platform, set its IPO terms to 34.09 million shares at $21-$23. The company have a fully-diluted market value of around $4.2 billion, were it to price in the middle, and has raised over $600 million from firms like TPG Growth, Pimco, DST Global, ICONIQ Capital, QED Investors and Wellington Management.

  • Why it's the BFD: Because this is a major market validation test for an online lending market whose last two VC-backed "unicorns" — LendingClub and OnDeck Capital — have flopped post-IPO.
  • Bottom line: "GreenSky made its name as a lender to help people pay for home improvement projects and expanded into helping fund elective health-care procedures." — Bloomberg
Venture Capital Deals

Carousell, a Singapore-based mobile listing service, raised $85 million in Series C funding co-led by return backers Rakuten Ventures and EDBI.

🚑 Beam Therapeutics, a Cambridge, Mass.-based developer of precision genetic medicines, has been launched with up to $87 million in tranched Series A funding co-led by F-Prime Capital Partners and ARCH Venture Partners.

Carro, a Singapore-based online auto classifieds and financing company, raised $60 million in Series B funding from SoftBank Ventures Korea, Insignia Ventures, B Capital Group, IDG Ventures India and return backers Venturra, Golden Gate Ventures and Singtel Innov8.

Cellulant, an Africa-focused digital payments provider, raised $47.5 million in new funding. The Rise Fund led, and was joined by Endeavour Catalyst and Satya Capital.

Luminary Media, a subscription-based podcast community, raised $40 million led by NEA, per the WSJ.

🚑 Acousia Therapeutics, a German drug startup focused on inner ear-related diseases and pathologies, raised €10 million in Series B funding. LBBW Venture Capital led, and was joined by Creathor Ventures, Bregua Corp. and return backers BIVF and KfW.

Private Equity Deals

Antin Infrastructure Partners has agreed to acquire Spanish fibre network operator Ufinet Group from Cinven, which will retain the company’s international operations.

🚑 Brookfield Asset Management made a US$3.3 billion takeover offer for Australian hospital operator Healthscope (ASX: HSO), which tops an existing bid from BGH Capital.

Cinven agreed to acquire JLA, a UK-based provider of asset supply and services for the laundry, catering and heating markets, from HgCapital.

IWG (LSE: IWG), a British outsourcing company, has received takeover offers from Lone Star, Starwood Capital and TDR Capital. Earlier this year the company rejected a £2.5 billion bid.

KKR has boosted its investment in Toorak Capital Partners, a lender primary focused on home-flippers, from $75 million to $200 million.

Kohlberg & Co. has acquired Senneca, a Cincinnati-based maker of specialty doors and enclosures for commercial and industrial end markets, from Audax Private Equity.

ProCare Automotive, a New Braunfels, Texas-based portfolio company of Kinderhook Industries, has acquired Austin Motor Mile Collision, an operator of 12 collision repair shops in Texas.

Public Offerings

Pluralsight is the only company expected to price a U.S. IPO this week, although a pair of SPACs also are on tap.

Foxconn is planning a Shanghai IPO for its Internet and industrial-focused business (Foxconn Industrial Internet Co.).

🎼M17 Entertainment, a Taiwan-based live music streaming platform, filed for a $115 million IPO. It plans to trade on the NYSE (YQ) with Citigroup and Deutsche Bank as lead underwriters. Shareholders include Vertex Ventures SE Asia, Yahoo Japan, KTB Ventures and Infinity Venture Partners.

Mercari, a Japanese marketplace app for secondary goods, disclosed in regulatory filings that its upcoming Tokyo IPO could raise upwards of $1.1 billion. The company has raised over $160 million from firms like East Ventures, Global Brain, ITOCHU, Mitsui & Co. and World Innovation Lab.

🚑 Scholar Rock, a Cambridge, Mass.-based developer of drugs that target suprecellular activation of growth factors, set its IPO terms to 5.36 million shares at $13-$15. It would have an initial market cap of around $342 million, were it to price in the middle. The company plans to trade on the Nasdaq (SRRK) with Jefferies as lead underwriter, and has raised around $100 million in VC funding from firms like Fidelity (14.94% pre-IPO stake), Polaris Partners (14.1%), Arch Venture Partners (13.82%), Astal International (10.2%) and EcoRI Capital (5.22%).

Sok Marketler, a Turkish discount grocer, raised around $531 million via an Istanbul IPO.

Liquidity Events

TPG is seeking a buyer for British discount retailer Poundworld, according to Reuters.

More M&A

AccorHotels (Paris: ACCP) has agreed to acquire the parent company of Chile’s Atton Hotels for $105 million.

Aurora Cannabis (TSX: ACB) is paying US$2.51 billion to acquire Canadian marijuana producer MedReleaf (TSX: LEAF). The C$29.44 per share price represents an 18.2% premium to Medreleaf’s Friday closing price.

Cadence Bancorp (NYSE: CADE) has agreed to buy Atlanta-based community bank chain State Bank Financial (Nasdaq: STBZ) for $1.4 billion in stock.

⛽ China Three Gorges has offered to buy listed Portuguese utility EDP for around $10.8 billion.

Convergys (NYSE: CVG), a Cincinnati-based call center company with a market cap north of $2 billion, is in talks with possible acquirers, per the WSJ.

🏈 David Tepper, the billionaire co-founder of hedge fund Appaloosa Management, reportedly has won out to buy the NFL's Carolina Panthers franchise, which is being sold by Jerry Richardson.

Harvard Management Co. is seeking a buyer for some or all of its $700 million worth of South American timberland, per Bloomberg.


BGH Capital, a buyout firm focused on Australia and New Zealand, has closed its debut fund with A$2.6 billion.

Bridgepoint is raising €750 million for its debut credit fund, per PE News.

It's Personnel

Amit Karna has left Goldman Sachs to join upstart British buyout firm 8C Capital (founded by KKR vets Dominic Murphy and Kugan Sathiyanandarajah).

Final Numbers: M&A
Source: Thomson Reuters. Data through May 10, 2018.