Nov 9, 2018

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning
Source: Giphy

The U.S. Food and Drug Administration reportedly plans to roll out new restrictions next week on the sale of non-tobacco flavored e-cigarette pods, including a ban on such products within convenience stores.

  • This is a spiky speed-bump for Juul, most recently valued at over $15 billion by investors like Fidelity, as its top-selling flavor would be banned at retailers like 7-Eleven.
  • The FDA also plans to require online age verification, which Juul already does (although we don't know if the FDA thinks its system is adequate).
  • Juul, which is often quite chatty, didn't return requests for comment.
  • The most notable piece here is the timing. The FDA on September 12 gave e-cig companies 60 days to submit information and plans for combating underage use. Either all of those discussions finished up early, or the FDA made up its find before closing industry arguments.

Scooter scoop: On Wednesday we noted how Ford agreed to buy scooter company Spin. Now we've learned from multiple sources that the deal came after Spin had a signed Series B term sheet in hand, for $20 million on a $65 million pre-money valuation, led by New York's Rosecliff Ventures.

Location, location, location: The new rules that strengthen U.S. regulatory oversight of foreign investment includes an under-noticed clause related to real estate. Per a report from law firm Mayer Brown:

"In recent years, however, CFIUS has developed and begun to review transactions involving the acquisition of a U.S. business in close proximity to sensitive US government facilities. Under FIRRMA, CFIUS jurisdiction has been expanded to include any type of real estate transaction in which the property is located within or in close proximity to an air or maritime port, US military installation, or any other property of the US government determined to be related to national security."

As an aside, I once tried to get a propane tank filled at a local hardware store, but learned the store couldn't do that sort of business because it was next door to a post office.

Central bankers: The Fed left rates unchanged yesterday and was generally optimistic about the U.S. economy, but did highlight how business investment growth fell from 8.5% in Q2 to just 0.8% in Q3.

Other bankers: Goldman Sachs is under pressure for new revelations that then-CEO Lloyd Blankfein met with the former Malaysian prime minister and two men accused of laundering/plundering the country's sovereign wealth fund. Blankfein had been referred to anonymously in earlier court documents.

  • UBS is being sued civilly by the U.S. Justice Department for the way it sold residential mortgage-backed securities ahead of the financial crisis. The complaint puts the "catastrophic" losses at "many billions of dollars."

Stocking stuffers: There are now venture capitalist trading cards. Be sure to give them to that special someone who you really just want to leave you alone.

🎧 Pro Rata podcast: I speak with incoming Congresswoman Jennifer Wexton, one of the dozens of Democrats who flipped a House seat on Tuesday night, about what what's next for economic and tech policy. Listen here.

🏈 Go Pats!

The BFD

Illustration: Sarah Grillo/Axios

Apollo Global Management has been invited to re-bid for the auto battery business of Johnson Controls (NYSE: JCI), which had been thought to have around a $14 billion deal in place with Brookfield Asset Management, according to the WSJ.

  • Why it's the BFD: Because this would be for the world's largest maker of car batteries.
  • Bottom line: "Apollo, which had offered around $13 billion, stopped its work on the deal when it became clear that Brookfield had won the auction, but it remains interested in the asset and is likely to step back into the ring, they said. Apollo was further along than Brookfield in its due diligence in what would be a complicated carve-out." — Mirriam Gottfried, WSJ
Venture Capital Deals

• Turvo, a Sunnyvale, Calif.-based collaborative logistics platform, raised $60 million in Series B funding. Mubadala Ventures led, and was joined by G2VP and Next47. http://axios.link/lCjx

🚑 Rael, a Buena Park, Calif.-based maker of organic tampons and other women's wellness products, raised $17.5 million in Series A funding. Mirae Asset Management and GS Retail Fund co-led, and were joined by Pritzker Group VC, Toni Ko and return backers SoftBank Ventures Korea and BAM Ventures. http://axios.link/Yf3k

Quantela, a San Francisco-based smart cities automation platform, raised $10 million from Digital Alpha. www.quantela.com

Plus One Robotics, a San Antonio-based provider of 3D vision and control systems for robotic automation, raised $8.3 million in Series A funding. Pritzker Group Venture Capital led, and was joined by Zebra Technologies. www.plusonerobotics.com

🚑 Eximis Surgical, a Louisville, Colo.-based surgical platform for removing large specimens through small laparoscopic incisions, raised $7.5 million. Questa Capital led, and was joined by Venture Investors. www.eximissurgical.com

Coder, an Austin, Texas-based “server-powered” software development platform, raised $4.5 million co-led by Uncork Capital and Redpoint Ventures. www.coder.com

Spinny, an India-based online used car marketplace, is in talks to raise between $10 million and $15 million from Accel and Sequoia Capital, per DealStreetAsia. http://axios.link/NFSl

Private Equity Deals

Apollo Global Management has been invited to re-bid for the auto battery business of Johnson Controls (NYSE: JCI), which had been thought to have around a $14 billion deal in place with Brookfield Asset Management, according to the WSJ. Apollo’s initial bid had been for around $13 billion, but the firm “stopped its work on the deal when it became clear that Brookfield had won the auction.” http://axios.link/jar8

🚑 CVC Capital Partners and PAI Partners are among those short-listed in the auction for Bristol-Myers Squibb's (NYSE: BMY) French OTC business, per Reuters. Also on the list are German drugmaker Stada and Italy’s Angelini. http://axios.link/DhW6

Owndays, a Japanese eyewear maker, raised an undisclosed amount of funding from L Catterton Asia and Mitsui & Co. http://axios.link/jSS8

Public Offerings

Legacy Housing, a Bedford, Texas-based mobile home maker, filed for a $69 million IPO. It plans to trade on the Nasdaq (LEGH) with B Riley FBR as lead underwriter. The company reports $19 million of net income on $127 million in revenue for the first nine months of 2018.

🍔 TFI TAB Food Investments, a franchisor for Burger King and other quick-service restaurants in Turkey and China, withdrew registration for a $222 million IPO. The company, which reported $2.9 billion in revenue for the first nine months of 2017, had originally postponed the offering back in February, and had planned to list on the Nasdaq.

More M&A

II-VI (Nasdaq: IIVI) agreed to buy Sunnyvale, Calif.-based consumer electronics components maker Finisar (Nasda: FNSR) for around $2.3 billion in cash and stock, or $26 per share (37.7% premium to yesterday’s closing price). http://axios.link/FSi0

Allstate (NYSE: ALL) is exploring a sale of its fixed-annuities business, which has a book value of between $4 billion and $5 billion, per Bloomberg. http://axios.link/c0PK

🚁 Bristow Group (NYSE: BRS) agreed to acquire Aurora, Ore.-based Columbia Helicopters for $560 million. www.colheli.com

Edenred (Paris: EDEN) agreed to buy CSI, a Bonita Springs, Fla.-based provider of automated corporate payment software, for around $600 million.
http://axios.link/Nbon

Plantronics (NYSE: PLT), a Santa Cruz, Calif.-based maker of Bluetooth earpieces and headsets, is exploring a sale, according to Reuters. It has a market cap of around $2.5 billion. http://axios.link/fzia

Weimeizi, a Chinese maker of consumer dental products, is being circled by Colgate-Palmolive (NYSE: CL), Unilever (LSE: ULVR) and Church & Dwight (NYSE: CHD), per the South China Morning Post. A deal could be valued at up to $1 billion. http://axios.link/yIjH

Fundraising

M13 Ventures, a Los Angeles-based firm focused on consumer products startups, is raising up to $150 million for its second fund, per an SEC filing. www.m13.co

Revolution Ventures is raising up to $200 million for its third fund, per an SEC filing. www.revolution.com

Teamworthy Ventures of New York is raising up to $80 million for its second fund, per an SEC filing. www.teamworthy.com

Final Numbers: M&A
Source: Refinitiv
Dan Primack