Jan 27, 2017

Axios Pro Rata

Early delivery this morning, as I get to be the "mystery reader" for a group of kindergarteners (I picked Goldie Locks & the Three Dinosaurs). Thanks for all your emails (keep em coming), and have a great weekend...

Top of the Morning

• Harvard hybrid RIP: Don't know how I left this out yesterday, but Harvard University on Wednesday announced plans to cut around half of the 230 investment professionals who manage its $35.7 billion endowment. Here's the memo, as obtained by Axios.

Most of the cuts will hit in-house managers, which basically signals the death knell for Harvard's so-called "hybrid model." Expect some of these folks ― such as the direct real estate team ― to spin out into new outside firms that will still manage some Harvard money, although the financial details haven't yet been worked out. Interesting timing, in light of how many big pension systems (first in Canada, but now stateside too) are beginning to bring some of their investment management in-house (particularly private equity).

• Shhhhhhh: Last year, the SEC received 204 confidentially-submitted filings for IPOs. Since the JOBS Act was enacted in April 2012, the total number stands at approximately 1,250.

• Wndrful: Several news outlets yesterday picked up on a Form D filing for WndrCo, which is best-known as the new investment group put together by former DreamWorks CEO Jeffrey Katzenberg. The filing revealed that WndrCo had raised just shy of $600 million. Some additional notes, after speaking to people familiar with the situation:

  • This is only a first close. Expect the final number to be closer to $750 million. Original plans were to target $500 million, but commitments came in fast and furious over the past several weeks (particularly from China).
  • Katzenberg is the big name, but he's only one of three partners in WndrCo. The others are Ann Daly, former president of DreamWorks Animation, and Sujay Jaswa, the former Dropbox CFO who also spent time at venture firm NEA. '
  • Others involved on a full-time basis (but not listed on the Form D) include Anthony Saleh (best known as the music manager who got Nas into the VC world), ChenLi Wang (ex-head of product management at Dropbox), finance director Nilesh Vashee (ex-Virgin America/Yale Investment Office). Part-time advisors include Jason Hirschhorn and Fazal Merchant.
  • The actual investment strategy has moved around a lot, which means most folks are really betting on the team more than the plan. A Fortune profile of Katzenberg from last fall suggested that WndrCo is likely to follow a flexible, model in the vein of IAC (where Katzenberg began his career), and that may still be the best way to think about it.

• Bitcoin boom? Bitcoin advocates have long talked about how one of the cryptocurrency's most promising applications would be financial remittances. If the Trump Administration ultimately opts to freeze remittances between Mexican immigrants and their families back home ― as a way to pressure Mexico into paying for the border wall ― then we could finally see this thesis played out.

• Speaking of that wall: We went back to at Trump's past statements about how much it would cost (plus some from Paul Ryan, who bumped it by $1 billion in less than 24 hours). Here's the history.

The BFD: Verizon kicking Charter's tires

Verizon (NYSE: VZ) is considering a merger with Charter Communications (Nasdaq: CHTR), per the WSJ. CNBC poured some cold water on the report earlier this morning, but didn't dismiss it entirely. Shares of both companies fell yesterday on the news, although Charter's market cap remains just shy of $90 billion.

• Why it's the BFD: This combination would bring together America's largest wireless company with its second-largest broadband provider (and Verizon isn't too shabby on broadband either). If Trump thinks AT&T and Time Warner is too big, wait until he gets a look at this.

• Bottom line: "New FCC Chairman Ajit Pai generally favors a hands-off approach to merger reviews if the companies can show how deals serve the 'public interest.' Trump Attorney General pick Jeff Sessions indicated the DOJ should weigh big mergers on antitrust grounds rather than 'some other discreet agenda that's not reasonably connected to the merger itself.' -- Kim Hart

Venture Capital Deals

• WorkFusion, a New York-based provider of intelligent automation solutions, has raised $35 million in Series D funding. Georgian Partners led the round, and was joined by Mohr Davidow Ventures, iNovia, Nokia Growth Partners, Greycroft Partners and RTP Ventures. www.workfusion.com

• Raisin, a Berlin-based financial marketplace for term deposits, has raised €30 million in Series C funding. Thrive Capital led the round, and was joined by return backers Ribbit Capital and Index Ventures. http://read.bi/2k8XjhQ

• Skinjay, a French developer of in-shower devices "to deliver essential oils to the skin and into the lungs," has raised €3.5 million in VC funding from Seventure Partners. http://bit.ly/2kmIEwz

• Jiobit, a developer of location-tracking devices, has raised $3 million in new VC funding. Backers include Math Venture Partners, Sandalphon Capital, Bridge Investments, Wakestream Ventures, Inflection Equity and Nameless Ventures. http://bit.ly/2kyrcoa

• Lighthouse.io, an Australian developer of employee and asset tracking software, has raised A$1.25 million in seed funding. Tamarisc led the round, and was joined by Morningside Technology Ventures and Storm Industries Investments. http://tcrn.ch/2jUKtB5

• Gimmal, a Houston-based provider of enterprise content management solutions, has secured an undisclosed amount of equity funding from Rubicon Technology Partners. www.gimmal.com

Private Equity Deals

• Chrysalot, a North Sea-focused oil company backed by EIG Partners, is in advanced talks to acquire a large portion of Royal Dutch Shell's North Sea oil and gas assets for $3 billion, according to Reuters. http://reut.rs/2jwx0ky

• Cinven and CVC Capital Partners have completed their previously-announced acquisition of NewDay, a UK-based consumer credit card company with £1.6 billion of receivables, from Varde Partners. The deal reportedly was valued at around £1 billion. http://bit.ly/2dLBIan

• CriticalPoint Capital has agreed to acquire JackRabbit, a Denver-based retail of specialty running products, from Finish Line (Nasdaq: FINL). http://bit.ly/2ksIbJr

• J.H. Whitney Capital Partners has acquired 3B Scientific, a Tucker, Ga.-based maker of anatomical and biological teaching aids. No financial terms were disclosed. www.3bscientific.com

• Toshiba Corp. has been working with Goldman Sachs on selling between 20% and 30% of its chip business, and has now settled on a plan to split the sale among Canon Inc. and several private equity funds, per Bloomberg. http://bloom.bg/2jTHzww

• VITAC, a Canonsburg, Penn.-based portfolio company of Gores Small Capitalization Partners, has acquired Caption Colorado, a Greenwood Village, Colo-based provider of captioning services. No financial terms were disclosed. www.captioncolorado.com

Public Offerings

• Detsky Mir, a Russian retailer of children's goods, is planning to raise upwards of $435 million in a Moscow IPO. http://reut.rs/2jklKnO

• Jagged Peak Energy, a Denver-based oil and gas E&P company backed by Quantum Energy Partners, raised $474 million in its IPO. The company priced 31.6 million shares at $15 per share, compared to plans to price 38.2 million shares at between $16 and $18 per share. http://reut.rs/2kyKauK

• JELD-WEN Holding, a Charlotte, N.C.-based residential door and window manufacturer, raised $575 million in its IPO. The company priced million shares at $23 per share (middle of range), for an initial market cap of around $2.3 billion. It will trade on the NYSE under ticker symbol JELD, while Barclays and Citigroup served as lead underwriters. The company was acquired for $871 million by Onex Partners in 2011. www.jeld-wen.com

• Jounce Therapeutics, a Cambridge, Mass.-based developer of cancer immunotherapies coupled to patient selection strategies, raised $104 million in its IPO. The company priced 6.5 million shares at $16 per share (above $13-$15 range), for an initial market cap of approximately million. It will trade on the Nasdaq under ticker symbol JNCE, while J.P. Morgan and Cowen & Co. served as lead managers. Shareholders include Third Rock Ventures (53.5% pre-IPO stake), Fidelity (12.1%), Celgene (11.4%), Wellington Management Co., Redmile Group, Nextech Invest, Pharmstandard International, Cormorant Asset Management, Omega Funds, Casdin Capital and Foresite Capital Management. http://bit.ly/2jbBJcY

• REV Group Inc., a Milwaukee-based maker of ambulances and other specialty vehicles, raised $275 million in its IPO. The company priced 12.5 million shares at $22 per share (above $19-$21 range), for an initial market cap of around $1.4 billion. It will trade on the NYSE under ticker symbol REVG, while Goldman Sachs, Morgan Stanley and Baird served as lead underwriters. The company reported around $23 million of net income on $1.7 billion in revenue for its most recent fiscal year. REV is owned by American Industrial Partners. www.revgroup.com

Liquidity Events

• United Rentals (NYSE: URI) has agreed to acquire NES Rentals, a Chicago-based construction equipment rental company, from Diamond Castle Holdings for approximately $965 million in cash. http://reut.rs/2k92vCa

• All Market, the New York-based maker of Vita Coco coconut water, is seeking to be acquired for upwards of $1 billion, per Reuters. J.P. Morgan is managing the process. Current shareholders include Reingwood Group and Verlinvest. http://reut.rs/2jlPgJQ

• Green Dot (NYSE: GDOT) is in exclusive talks to acquire UniRush, a smaller pre-paid card rival co-founded by Russell Simmons, per Bloomberg. Sellers would include The Carlyle Group. http://bloom.bg/2kpCyeR

• Silver Lake has agreed to sell Vantage Data Centers Management, a Santa Clara, Calif.-based data center operator, to Digital Bridge Holdings for more than $1 billion (including assumed debt), according to Reuters. http://reut.rs/2jbDFlD

More M&A

• Ant Financial, a payment affiliate of Alibaba (NYSE: BABA), has agreed to acquire money transfer service MoneyGram International (Nasdaq: MGI) for approximately $880 million, or $13.25 per share (11.5% premium over Wednesday's close). http://on.ft.com/2jklCVr

• Lionsgate (NYSE: LGF) reportedly is in talks to sell its stake in cable channel Epix to fellow shareholders MGM and Paramount. http://bit.ly/2jEzT02

• Tesco (LSE: LSCO) has agreed to acquire British grocery wholesaler Booker (LSE: BOK) for £3.7 billion (12% premium over Thursday's closing price). http://reut.rs/2jwF70B


• Congruent Ventures, a new sustainability-focused VC firm based in Oakland, is raising a pair of $50 million funds, per SEC filings. http://bit.ly/2k7tlu7

• e.Ventures is raising up to $115 million for its second growth equity fund, according to an SEC filing.

• FuturePerfect Ventures of New York is raising up to $30 million for its second early-stage VC fund, according to an SEC filing.

• Venrock has closed its eighth VC fund with $450 million in capital commitments. http://tcrn.ch/2jjVxGc

It's Personnel

• Raed Elkhatib has joined placement agent Atlantic-Pacific Capital as a partner and CEO. He previously was a managing director in Credit Suisse's private funds group. The firm also has added Hank Gurley (ex-Fortress Group) as a principal. www.apcap.com

• Chris Lynch is stepping down as a partner with Boston-area VC firm Accomplice, although he will retain his current portfolio board seats. The move comes as Accomplice plans a geographic strategy shift, whereby it will invest around half of its next fund (marketing begins later this year) in the Bay Area, where it is currently seeking a new partner and junior investment staff. Lynch had joined in 2012, after selling Vertica to HP for $350 million. http://bit.ly/2jbD5o2

• Lime Rock, an energy-focused private equity firm, has promoted Greg Highberger to managing director. It also has promoted Blair Barlow to director, Any Mehta to deputy general counsel and chief compliance officer, Andrew Gautier-Winther to VP and Ben Burns to senior associate. www.lrpartners.com

• Andrew Rueff has joined Waud Capital Partners as an operating partner focused on the fintech sector. He previously was VP of M&A with payment processing company Nova. http://bit.ly/2k8Xz08

Final Numbers