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Top of the Morning
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A group of former Toys "R" Us workers were on Capitol Hill yesterday, asking for private equity-related legislation that could include new worker protections, leverage limits and profit clawbacks.
- Sen Bob Menendez (D-NJ) said he and Sen. Cory Booker may offer a related amendment to a big appropriations bill that is coming to the floor shortly. No details yet.
- The workers also met with Sens. Kirsten Gillibrand (D-NY) and reps for Sen. Elizabeth Warren (D-MA). Seems like they're missing an entire side of the aisle and, at this point, that's the only side that really matters.
- I'm told that former Toys "R" Us owners KKR and Bain Capital continue to speak with the ex-worker reps about structuring some sort of hardship fund. But I also heard that a month ago, and nothing is done yet.
- At the same time, a source points out that some of the employees fared slightly better than they otherwise might have, because the PE firms and creditors set aside enough cash in the bankruptcy administration claim to ensure all employees received WARN notices (meaning that the co had to let them work at least 60 more days with full pay).
• Trade wars: No, not the thing about Trump threatening to bump the proposed tariff on $200 billion in Chinese goods from 10% to 25%. Instead, the thing about capital flow:
- The UK is considering more stringent rules on foreign takeovers of domestic companies. Specifically, it wants to expand its oversight power to include smaller businesses.
- Germany will block a takeover of machine toolmaker Leifeld by a Chinese investor, on national security grounds.
- China has proposed making it easier for foreign firms to acquire strategic stakes in companies on domestic exchanges.
• The CBS vs. Shari Redstone fight uglier yesterday, with the media company accusing Redstone of trying to remove a director who made an allegedly unauthorized video recording of her father, Sumner Redstone, in order to document his declining health. Shari denies the accusation, saying simply that she indicated that she wouldn't vote for the director's re-election (a moot point, since he's opted not to stand for reelection).
- Embattled CBS CEO Les Moonves reportedly will answer analyst questions during a quarterly earnings call that takes place after market close tomorrow.
- Go deeper: Les Moonves remains... for now
- Bottom line: If Moonves ultimately goes, a CBS-Viacom merger becomes much more likely.
• Today in Abraaj: Abraaj founder Arif Naqvi is again in legal hot water for allegedly writing bad checks, which is a criminal offense in the UAE. Just two weeks ago he seemed to settle a similar case with the same plaintiff, whose attorney now says: "The accused has already reneged on what was promised."
- Per Bloomberg: Behind the spectacular collapse of a PE titan
• July in review: The Dow (+4.7%) and S&P 500 (+3.6%) both had their best month since January, while the Nasdaq climbed around +2%. Oh, and Apple's market cap works out to around $964 billion in pre-market trading, following better-than-expected Q2 earnings.
- Dark clouds: August is traditionally a tough month for stocks, particularly in midterm election years, and Morgan Stanley is warning of a major sell-off.
The BFD
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Apeel Sciences, a Santa Barbara, Calif.-based developer of food-based coatings to extend produce freshness, raised $70 million in Series C funding. Viking Global Investors led, and was joined by return backers Andreessen Horowitz, Upfront Ventures and S2G Ventures.
- Why it's the BFD: Because food waste costs an estimated $2.6 trillion per year, much of which is because of spoilage. This includes around $18 billion in annual losses for food retailers, which Apeel believes it can not only stem but reverse — claiming that its early tests on avocados have resulted in consumers buying more product.
- Bonus: As part of the deal, ex-Whole Foods co-CEO Walter Robb joined the Apeel board.
- Bottom line: Apeel CEO James Rogers tells me that the idea is to basically build a "little micro-climate" for individual pieces of produce, slowing down the rate liquid escapes and oxygen enters. The company applies the coatings itself for large suppliers, but has a self-serve option for smaller growers, including an organic micro-greens farm in Santa Barbara that was its first customer.
Venture Capital Deals
• Brandless, a San Francisco-based direct-to-consumer products company, raised $240 million in Series C funding at a post-money valuation just north of $500 million. SoftBank Vision Fund led, and was joined by return backers NEA, Redpoint Ventures, GV and Sherpa Capital. http://axios.link/TKHl
• Freshworks, a maker of customer support software, raised $100 million in Series G funding at around a $1.5 billion valuation. Accel and Sequoia Capital co-led, and were joined by CapitalG. http://axios.link/qBfB
• Xiangwushuo, a Shanghai-based mobile app for swapping used goods, raised $50 million in new funding led by Sequoia Capital. Other backers include Hillhouse Capital, IDG Capital, GGV Capital, Matrix Partners and ZhenFund. http://axios.link/BJqD
🚑 ReViral, a British developer of a treatment for respiratory syncytial virus (RSV) infections, raised €47 million in Series B funding. New Leaf Venture Partners and Novo Ventures co-led, and were joined by return backers Andera Partners, OrbiMed and Brace Pharma Capital. http://axios.link/p6UY
• Yellowbrick Data, a Palo Alto-based data warehouse startup, raised $44 million in Series A funding from DFJ, GV, Menlo Ventures, Samsung Ventures and Third Point Ventures. http://axios.link/ceb2
🚑 Evidation Health, a San Mateo, Calif.-based developer of digital biomarkers, raised $30 million in Series C funding. SV Health Investors and return backer B Capital Group co-led, and were joined by GE Ventures and Sanofi Ventures. With this funding, Evidation has raised a total of $61 million. www.evidation.com
• Espressive, a Santa Clara, Calif.-based developer of AI for enterprise service management, raised $23 million from General Catalyst Partners and Wing VC. www.espressive.com
🚑 Mammoth Biosciences, a Santa Clara, Calif.-based disease detection startup that leverages Crispr, raised $23 million in Series A funding. Mayfield led, and was joined by 8VC and NFX. http://axios.link/bB8x
• Skyline AI, an Israeli property discovery startup for real estate investors, raised $18 million in Series A funding. TLV Partners and seed backer Sequoia Capital co-led, and were joined by JLL Spark. http://axios.link/qKEw
• Formlabs, a Somerville, Mass.-based 3D printing company, raised $15 million in Series D funding at a valuation north of $1 billion. NEA led, and was joined by Shenzhen Capital Group and Pitango Venture Capital. http://axios.link/JofK
• Test.ai, a bot-based app testing startup, raised $11 million in Series A funding. Gradient Ventures led, and was joined by e.ventures, Uncork Capital and Zetta Venture Partners. http://axios.link/S4Vv
• Crowdstreet, a Portland, Ore.-based commercial property investment marketplace, raised $8 million in Series B funding. Grotech Ventures led, and was joined by Rally Ventures, Seven Peaks Ventures and Green Visor Capital. http://axios.link/TOep
• Xwing, an autonomous aviation software startup, raised $4 million in seed funding led by Eniac Ventures. http://axios.link/XyMz
• Labelbox, a San Francisco-based data labeling platform for enterprises, raised $3.9 million in seed funding. Kleiner Perkins led, and was joined by First Round Capital and Gradient Ventures. www.labelbox.com
• ZecOps, a San Francisco-based cybersecurity startup that “learns from attackers' mistakes,” raised $3.5 million in seed funding led by KPN Ventures. www.zecops.com
⛽ Blueprint Power, a New York-based platform to help buildings sell their excess electricity, raised $3.5 million in Series A funding from firms like Congruent Ventures and MetaProp Ventures. www.blueprintpower.com
• California Dreamin, a San Francisco-based maker of cannabis-infused sodas, raised $2.3 million in seed funding from Y Combinator, Babel Ventures, Justin Wong and Paul Buchheit. www.drinkdreamin.com
Private Equity Deals
• ATL Partners acquired a majority stake in Rock-It Cargo, a provider of international freight forwarding solutions to end markets like music touring and humanitarian relief. http://axios.link/WOgZ
• Belcan, a Cincinnati-based portfolio company of AE Industrial Partners, acquired Omega Engineering Services, a British tester and developer of control equipment used in the aerospace and industrial sectors, from Passionate About People. www.belcan.com
• Blue Sage Capital and Hanover Partners invested in Ligchine, a Darien, Wis.-based maker of laser-guided concrete screeds. www.ligchine.com
🚑 Century Park Capital Partners acquired Dominion Youth Services, a Richmond, Va.-based provider of behavioral health services to children and young adults. http://axios.link/ddvF
Core & Main, a St. Louis-based portfolio company of Clayton Dubilier & Rice, acquired select assets of DOT Sales Co., a Fontana, Calif.-based distributor and manufacturer’s representative of waterworks products.
🚑 Diagnostics Medical Corp., a Chinese developer of diagnostic testing reagents that was founded in 1999, raised around $293 million in funding led by Legend Capital ($100m). Other backers include Matrix Partners, Ping An Ventures, High Light Capital, Zhongjin Kangrui Healthcare Industrial Fund and Shanghai Free Trade Zone Equity Fund. http://axios.link/lsUQ
• DreamBox Learning, a Bellevue, Wash.-based K-8 digital math program, raised $130 million from The Rise Fund. http://axios.link/9bBE
🌲 Exponent acquired Dennis Publishing, the UK publisher of news magazine The Week and adult comic Viz, for £166 million. Proceeds will be used to plant trees in an English forest. http://axios.link/doSJ
🚑 Encore Textile Services, a Turlock, Calif.-based portfolio company of Highland Avenue, acquired Emerald Textiles, a San Diego-based provider of healthcare linen services.
🚑 Galen Partners has acquired SMP Pharmacy Solutions, a Miami-based specialty pharmacy focused on niche areas like fertility. www.smppharmacy.com
• Industrial Opportunity Partners acquired SignResource, a Los Angeles-based maker of interior signage and brand identification solutions. www.signresource.com
• NexPhase Capital acquired Brandt Information Services, a Tallahassee, Fla.-based provider of recreational licensing software to local, state and federal governments. www.brandtinfo.com
• Resource Label Group, a Franklin, Tenn.-based portfolio company of First Atlantic Group and TPG Growth, acquired Ingenious Packaging, a Toronto-based labeling company. www.ingeniouspkg.com
• The Riverside Company agreed to sell Blue Microphones, a Westlake Village, Calif.-based maker of high-end mics, to Logitech (Nasdaq: LOGI) for $117 million in cash. http://axios.link/CvwW
• Valtris Specialty Chemicals, an Independence, Ohio-based portfolio company of H.I.G. Capital, acquired ICT (Dutch and Belgian maker of chlorinated toluenes) and Baleycourt (French marker of chemicals for end markets like polymer additives) from INEOS Enterprises. www.valtris.com
Liquidity Events
• Amadeus IT Group of Spain confirmed it's in talks to buy TravelClick, a New York-based hotel reservations platform, from Thoma Bravo. The deal reportedly could be worth upwards of $3 billion. http://axios.link/OApB
⛽ Ardian agreed to sell its 25% stake in European utility Encevo to state-owned China Southern Power Grid. http://axios.link/Tpzt
• DocuSign (Nasdaq: DOCU) agreed to buy SpringCM, a Chicago-based provider of document generation and contract lifecycle management software, for around $220 million in cash. SpringCM raised around $135 million in VC funding from firms like Crestline Investors, Foundation Capital, North Bridge Venture Partners, Square 1 Bank, Bluestem Capital Company and Panorama Point Partners. www.springcm.com
• Splunk (Nasdaq: SPLK) acquired Krypton, a San Francisco-based operations and maintenance systems platform that was seeded by Costanoa VC, True Ventures, Fuel Capital and Stanford University Venture Fund. www.kryptoncloud.com
• SS&C Technologies (Nasdaq:SSNC) agreed to buy Eze Software, a Boston-based maker of enterprise investment software, from TPG Capital for $1.45 billion. http://axios.link/qDD5
More M&A
🚑 Bayer agreed to sell its prescription dermatology brands to Denmark’s Leo Pharma. http://axios.link/5cmO
• CJ CheilJedang of South Korea is among the bidders for Schwan’s, a Marshall, Minn.-based frozen food company that could fetch around $1.8 billion, per Reuters. http://axios.link/fy7o
• Dialog Semiconductor said it has ended talks to buy Synaptics (Nasdaq: SYNA), a San Jose, Calif.-based touchpad maker with a market cap of around $1.7 billion. http://axios.link/LkUH
Fundraising
• Felicis Ventures closed its sixth early-stage fund with $270 million. It also hired Victoria Treyger, former chief revenue officer at Kabbage, as its fourth managing director.
It's Personnel
⛽ Jean-Michel Aubertin, former CEO of CG Power and Doosan Power Systems, joined Clayton Dubilier & Rice as an operator advisor for European energy deals. www.cdr-inc.com
• Cowen named Elizabeth Flisser Rosman as head of investment management. She joined the firm in 2017 as a managing director and head of strategy. www.cowen.com
Final Numbers