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Illustration: AΓ―da Amer/Axios

Bernardo Hees is out as CEO of Kraft Heinz, with news this morning that he'll be succeeded by former Anheuser-Busch InBev chief marketing officer Miguel Patricio.

The official story: Slumping sales, a floundering stock price, dividend reductions, massive write-downs and an SEC investigation into accounting and procurement activities.

The unofficial story: Brazilian private equity firm 3G Capital and Warren Buffett paid nearly $24 billion to buy the food giant in 2013, after which 3G embarked on the sort of truculent cost-cutting for which Buffett criticizes other private equity firms.

  • Per Fortune's Jennifer Reingold, at the time: "With Kraft, the short-term profit gains will be major, but can brutal efficiency turn around the secular decline of consumer packaged goods companies? It seems like, in addition to cuts, what Kraft Heinz really needs are some creative thinkers. But they might take up too many chairs at headquarters."
  • Per CNBC's Lauren Hirsch today: "As Kraft Heinz’s sales have stalled, analysts have wondered whether 3G cut too deeply and quickly, starving brands of investment needed for growth. They have questioned whether that approach works without deal-making to give the company needed fat to cut."

The bottom line is that 3G is making at least a mild concession, as Hees has been a partner with the firm since 2010. But it still has one of its own as chairman, and Patricio is a veteran of a brewing conglomerate that 3G helped create (first by creating InBev, and later by merging it with Anheuser-Busch). So change is coming, but slowly... kind of like waiting for ketchup to pour from a glass bottle.

β€’ Puffed up: Pax Labs, the San Francisco-based marijuana vaporizer company that spun out Juul in 2017, raised $420 million at what TechCrunch reports is a $1.7 billion post-money valuation.

  • We reported in January that Pax was seeking to raise a small amount of funding at a valuation of between $500 million to $600 million, and then at least another $100 million at $1 billion+.
  • But it supercharged those plans due to intense investor interest, per The Information.
  • Like with last week's conditional merger between Canopy Growth and Acreage Holdings, this is largely a bet on the continued expansion of U.S. cannabis legalization (even though Pax does not itself touch the plant).

β€’ Lyft is facing a pair of investor lawsuits, alleging that it misrepresented its market share and that the company should have alerted investors to its e-bike recall plans.

  • It's not surprising to see such suits after a hyped IPO slumps in the aftermarket, and most are either dismissed or settled out of court. The only difference here is the speed with which the Lyft suits were filed.
  • As Bloomberg reports, the first Snap lawsuits came 10 weeks post-IPO, while Blue Apron was 7 weeks post-IPO. The Lyft suits came after 3 weeks.

πŸ“… Coming attractions: No companies expect to price IPOs on U.S. exchanges this week, but we do plan to see a slew of IPO road-show launches. Expect packed hotel ballrooms for Beyond Meat, iHeartMedia, Yunji and more.

  • Uber is allowed to launch its road-show on Friday, although companies with such calendars usually wait until the following Monday. No word yet on its plans.
The BFD

Illustration: Lazaro Gamio/Axios

Sinclair Broadcasting (Nasdaq: SBGI) is the front-runner to buy a package of regional sports networks being sold by Walt Disney Co. (NYSE: DIS), following a bid of around $10 billion, per Fox Business Network. A deal could be announced as early as this week.

  • Why it's the BFD: Because this would represent a major reversal of fortunes for Sinclair, which last year was blocked from buying Tribune Media after allegedly lying to the FCC and acting in bad faith with Tribune's board.
  • Backstory: Disney, which owns ESPN, agreed to sell the RSNs in order to get regulatory approval for its $52 billion purchase of 21st Century Fox's entertainment assets. Other bidders include Major League Baseball (now working with Liberty Media), the BIG3 basketball league and Amazon (which reportedly only wants one RSN, the NY Yankees-centric YES).
  • Bottom line: "Disney initially sought as much as $20 billion for the entire package... [But] most of the interest came from parties looking to snap up the RSNs at a low-ball price. Industry trends show declining cable profitability due to cord cutting and sports leagues maintaining ownership (rather than the networks), of the all-important digital rights for games to be viewed on wireless devices." β€” Lydia Moynihan & Charlie Gasparino, Fox Business Network
Venture Capital

πŸš‘ Poseida Therapeutics, a San Diego-based developer of CAR-T product candidates, raised $142 million in Series C funding. Novartis led with a $75 million investment, and was joined by Aisling Capital Management, Pentwater Capital Management, Perceptive Advisors and return backers Malin Corp., Longitude Capital, Vivo Capital and Boxer Capital. www.poseida.com

β€’ HappyFresh, a grocery delivery service in Southeast Asia, raised $20 million in Series C funding. Mirae Asset-Naver Asia Growth Fund led, and was joined by Line Ventures, Singha Ventures, Grab Ventures, Samena Capital, Vertex Ventures, SMDV, 500 Startups and BeeNext. http://axios.link/8Vhq

πŸš‘ Avidity Biosciences, a La Jolla, Calif.-based developer of precision medicines for cancer treatment, raised $15 million from Eli Lilly (NYSE: LLY), as part of a global licensing and research deal that also includes a $20 million upfront payment and upwards of $405 million in earn-outs. It previously raised $30 million in VC funding. www.aviditybiosciences.com

πŸš‘ The Well, a New York-based upscale wellness club chain, raised $14 million in Series A funding led by NEA. http://axios.link/MkpL

Private Equity

β€’ The Blackstone Group agreed to buy a majority stake in listed Indian packaging firm Essel Propack, at an enterprise value of up to $462 million. http://axios.link/GRqk

β€’ Montage Partners acquired MetalFx, a Willits, Calif.-based provider of precision sheet metal fabrications, enclosures, assemblies and wood products. The seller is Avista Corp. (NYSE: AVA), which will retain a minority equity stake. www.metalfx.com

Public Offerings

πŸ” Beyond Meat, an El Segundo, Calif.-based maker of vegan meats, set IPO terms to 8.75 million shares at $19-$21. It would have an initial market cap of $1.15 billion (double its last private round), were it to price in the middle, and plans to trade on the Nasdaq (BYND) with Goldman Sachs as lead underwriter. The company reports a $30 million net loss on $88 million in revenue for 2018, and raised $142 million in VC funding from Kleiner Perkins (16.1% stake), Obvious Ventures (10.4%), Tyson Foods (6.6%), Cleveland Avenue (5.4%), Union Grove Partners, Bill Gates, Leonardo DiCaprio and ex-McDonald's CEO Don Thompson.

β€’ SciPlay, an Las Vegas-based social gaming company being spun out of Scientific Games (Nasdaq: SGMS), set IPO terms to 22 million shares at $14-$16. It would have an initial market cap of $1.9 billion (double its last private round), were it to price in the middle, and plans to trade on the Nasdaq (SCPL) with BAML as lead underwriter. The company reports $73 million of net income on $416 million in revenue for 2018.

πŸš‘ TransMedics, an Andover, Mass.-based developer of organ preservation technology, set IPO terms to 4.7 million shares at $15-$17. It would have an initial market cap of around $308 million, were it to price in the middle, and plans to trade on the Nasdaq (TMDX) with Morgan Stanley and J.P. Morgan as co-lead underwriters. The company reports a $24 million net loss on $13 million in revenue for 2018, while shareholders include Flagship Pioneering (13.1% pre-IPO stake) and Kleiner Perkins (6.8%). www.transmedics.com

Liquidity Events

🍦 Arbor Investments sold Fieldbrook Foods, a Dunkirk, N.Y.-based private-label ice cream manufacturer, to Wells Enterprises. http://axios.link/oZZB

More M&A

β€’ Charoen Pokphand Foods, a Thai agricultural conglomerate, agreed to buy Canadian pork producer HyLife Investments for C$498 million. http://axios.link/6hYZ

β€’ Engie (Paris: ENGI) is considering a takeover offer for Emcor Group (NYSE: EME), a Norwalk, Conn.-based provider of electrical and mechanical construction and facilities services, per Bloomberg. Emcor has a market cap of nearly $4.5 billion. http://axios.link/ENCB

β›½ Saudi Aramco agreed to buy Royal Dutch Shell’s (LSE: RDS) 50% stake in their Saudi refining joint venture SASREF for $631 million. http://axios.link/9c6i

β›½ Schlumberger (NYSE: SLB) plans to sell its Saudi drilling business to Arabian Drilling Co., per Al Maaal. http://axios.link/mRn0

β€’ Thomas Cook (LSE: TCG) has been approached about a takeover, per Sky News. The London-based travel services company has a market cap of around Β£376 million. http://axios.link/jP9J

Fundraising

β€’ Drive Capital, a Columbus, Ohio-based VC firm, raised $307 million for its third flagship fund and $250 million for a $400 million-targeted later-stage fund, per SEC filings. www.drivecapital.com

β€’ North Castle Partners raised $400 million for its seventh buyout fund focused on consumer businesses in the healthy, active and sustainable living space. www.northcastlepartners.com

It's Personnel

β€’ Rich Friedman is stepping back from running day-to-day operations of private equity investing for Goldman Sachs, per the WSJ. He’ll be succeeded by Sumit Rajpal and Andrew Wolf Sumit Rajpal, who currently oversees corporate-buyouts funds, and Andrew Wolff, based in London, the people said. http://axios.link/8hbF

πŸš‘ Maha Katabi joined Sofinnova Investments, a biopharma-focused VC firm, as a partner. She previously was a partner with Sectoral Asset Management. www.sofinnova.com

Final Numbers: No end to merger mania
Source: EY survey of over 2,900 global CEOs and other C-suite executives. Full report here.