Jan 19, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Greetings from Washington, D.C., where I've been in town for the Axios launch (and last night's launch party, which included such cliched groupings as Joe Biden, Kellyanne Conway and Tony Romo). New York tomorrow for a Wharton PE/VC conference and then back to the Boston home office. Okay, let's get to it...

Top of the Morning

• Oh Wilbur In advance of his Commerce Dept confirmation hearings yesterday, private equity vet Wilbur Ross filed financial disclosures and ethics statements that reflected a vast maze of limited partnership interests. Almost all of it was related to his firm WL Ross & Co., which he sold in to Invesco in 2006, most (but not all) of which he plans to divest within 180 days. But he also has stakes in funds managed by defunct Silicon Valley venture firm Formation 8 and its Joe Lonsdale-led spin-out 8VC. "No comment" from Lonsdale on his connection to Ross, or how Ross will dump his stake in the recently-raised 8VC vehicles.

• Related: Treasury nominee Steve Mnuchin's only private equity exposure (outside of film partnerships) is an LP stake with Goldman Sachs Capital Partners (he's ex-GS) and between $500k-$1 million worth of Blackstone Group stock. He has pledged to divest all of it, if confirmed.

• Policy piece: I recently spoke with Bobby Franklin, president and CEO of the National Venture Capital Association, about his post-election policy thoughts on issues like legal immigration reform ("more skeptical"), ACA repeal, taxes and that Trump tech meeting ("I'm glad we weren't at that table."). Read more here.

• Snap IPO stuff: (1) Jess Lessin has a good piece up on the complicated relationship between Snapchat and Silicon Valley. (2) There has been lots of speculation that a successful Snap IPO will open the floodgates for other tech issuers, but I just don't see it. This is a stand-alone sort of offering, both in terms of size and sector. Mutual fund managers won't think about Snap when deciding to buy or pass on the net $200 million enterprise SaaS IPO. (3) NYSE and NASDAQ are going through some amusingly ridiculous lengths to get this listing, per Reuters.

• Tech talk: This morning we posted a joint interview with outgoing U.S. chief technology officer Megan Smith (ex-Google) and her deputy Alex Macgillivray (ex-Twitter), in which they discussed their experiences, legacies and whether or not other technologists should follow in their footsteps. Two items that didn't make the post:

(1) Smith hasn't yet decided on her next move, but it sounds like she's leaning against a return to the private sector. She says that she's become taken with public/advocacy service, particularly around issues of diversity.

(2) Trump has not yet named anyone to the CTO role (which was created by Obama), nor to run the parent Office of Science and Technology. That said, both offices do have career civil servants who will remain in place, and Smith says her office has had conversations with the Trump transition. Unfortunately, our chat occurred before Trump named Reed Cordish (a real estate and restaurant developer) as Assistant to the President for Intragovernmental and Technology Initiatives. The transition team has not responded to requests for comment as to how Cordish's appointment will affect the CTO's office, nor why such an explicitly non-technical person was named to this role.

• Mea culpa: Yesterday's "BFD" section included a quote from what I referred to as the Twitter account of Doron Kempel, CEO of SimpliVity (being acquired by HP Enterprise). The account was not created or managed by Kempel, per both SimpliVity and HPE. My sincere apologies for the error.

• Where in the world? Tomorrow afternoon I'll be at the Wharton VC/PE Conference in New York, for a keynote interview with Annie Lamont of Oak HC/FT. Expect that we'll talk a lot about healthcare investing (particularly services) in an age of uncertain reimbursements. More info here.

The BFD: China Oceanwide buying IDG

• China Oceanwide Holdings Group Co. is leading a purchase of International Data Group, a Boston-based tech group whose businesses include publishing (PCWorld, etc.), market research (IDC) and venture capital (IDG Ventures). Also involved on the buyside is Hugo Shong, who co-founded IDG Capital in 1993 with IDG founder Pat McGovern. No financial terms were disclosed, but the WSJ earlier reported that the purchase price was expected to be south of $1 billion.

• Why it's the BFD: This is a punctuation mark on arguably the most important tech media company of the pre-Internet era (and even beyond, with Apple continuing to unveil new product at MacWorld shows until 2009). It's also kind of fitting that it goes to a Chinese buyer, given that McGovern was one of the earliest U.S. tech execs who launched new businesses and made investments in China.

• Bottom line: "This was obviously the [offer] that intrigued us the most, and no small part of that was the fact that part of our future could be entrusted to somebody like Hugo. That gave us a great sense of satisfaction, knowing that we could continue Pat's legacy." -- IDG chairman Walter Boyd

Venture Capital Deals

• Salsify, a Boston-based SaaS platform for product content management, has raised $30 million in Series C funding. Underscore.vc led the round, and was joined by return backers Venrock, Matrix Partners and North Bridge Venture Partners. http://bit.ly/2jCeIyE

• ProtectWise, a Denver-based enterprise security platform, has raised $25 million in Series B funding from firms like Arsenal Venture Partners, Top Tier Capital Partners and Tola Capital. http://dpo.st/2jbX0iA

• Deputy, an Australian provider of workforce management software, has raised A$25 million in Series A funding led by OpenView Venture Partners. http://bit.ly/2jXIqLw

• DigiLens, a Sunnyvale, Calif.-based provider of waveguide diffractive optical technology and nanomaterials for AR/VR, has raised $22 million in Series B funding. Backers include Sony, Foxconn, Continental, Panasonic, Alsop Louie Partners, Bold Capital, Nautilus Venture Partners and Dolby Family Ventures. http://tcrn.ch/2k4gl5b

• Two Bit Circus, a Los Angeles-based experiential entertainment company, has raised $15 million in Series B funding. Jazz Venture Partners led the round, and was joined by return backers Foundry Group, Techstars Ventures, and Intel Capital. New investors include Dentsu Ventures and Georgian Pine. www.twobitcircus.com

• Cristal Therapeutics, a Dutch developer of nanomedicines for cancer and other diseases, has raised €12.8 million in new VC funding. Aglaia BioMedical Ventures and DROIA Oncology Ventures co-led the round, and were joined by BOM, LIOF, LBDF and return backers Chemelot Ventures, BioGeneration Ventures, Utrecht University Holding and Nedermaas Hightech Ventures. www.cristaltherapeutics.com

• FLYR, a San Francisco-based provider of predictive analytics and machine learning solutions for the travel market, has raised $8 million in Series A funding. Peter Thiel led the round, and was joined by return backers JetBlue Technology Ventures, Streamlined Ventures, AXA Strategic Ventures, Amadeus, Western Technology Investment, Plug and Play and Chasm Capital Management. www.flyrlabs.com

• Split, a Redwood City, Calif.-based platform for controlled rollouts, has raised $8 million in Series A funding. Accel led the round, and was joined by Lightspeed Venture Partners and Sway Ventures. http://bit.ly/2jbYI3c

• Rhythm Superfoods, an Austin, Texas-based maker of organic and non-GMO plant-based superfood snacks, has raised $6 million in Series D funding. General Mills led the round via its 301 INC venture unit, and was joined by Blueberry Ventures and CircleUp. http://for.tn/2jCsn99

• Headset, a Seattle-based provider of retail analytics solutions for cannabis-related businesses, has raised $2.5 million in new VC funding from Hypur Ventures and Salveo Capital. www.headset.io

• Laugh.ly, a New York-based streaming mobile app built for stand-up comedy, has raised $2.25 million in seed funding. New York Angels led the round, and was joined by Wharton Alumni Angel Network, Social Capital, Backstage Capital, Treehouse Capital, Barbara Corcoran, Accelerator Ventures and Atlas Holdings. http://tcrn.ch/2k0dn1G

• Iris Automation, a developer of "sense and avoid" technology for UAVs for industrial use, has raised $1.5 million in seed funding. Bee Partners led the round, and was joined by Social Capital, GGV Capital and Liquid 2. http://tcrn.ch/2iINxhu

Private Equity Deals

• Bain Capital has teamed with Key Safety Systems on a turnaround bid for troubled Japanese airbag maker Takeda Corp., according to Reuters. http://reut.rs/2iVVHqk

• Modere, a Springville, Utah-based portfolio company of Z Capital Partners, has agreed to acquire Jusuru International, an Anaheim, Calif.-based maker of nutraceuticals for younger-looking skin. No financial terms were disclosed. www.jusuru.com

• ViewRay (Nasdaq: VRAY), a Cleveland-based developer of radiation therapy technology for the treatment of cancer, has raised $26.1 million via a private placement of common stock and warrants. Puissance Capital Management led the infusion, and was joined by Acuta Capital Partners and existing shareholders OrbiMed Advisors and Kearny Venture Partners. http://bit.ly/2iMZAdF

Public Offerings

• Evry, a Norwegian IT services company backed by Apax Partners, is prepping an IPO, per a local news report. The deal could value Evry at upwards of $1.88 billion.

Liquidity Events

• Eli Lilly (NYSE: LLY) has agreed to acquire CoLucid Pharmaceuticals (Nasdaq: CLCD), a Durham, N.C.-based developer of oral and intravenous treatments for migraine and other headache pain. The deal is valued at $960 million in cash, or $46.50 per share (33% premium over Tuesday's closing price). CoLucid shareholders include Pappas Ventures (10.33% stake), Care Capital (8.03%) and TVM Capital (7.77%). http://bit.ly/2jxnUVs

• Ekuti Nasional Berhad, a Malaysia state-backed private equity group, has agreed to sell its 42.3% stake in offshore support vessel provider Icon Offshore Berhad to UMW Oil & Gas. http://reut.rs/2jc0Gkh

• Source Capital has sold Bills Khakis, a Reading, Penn.-based men's sportswear maker, to NEJ Inc. No financial terms were disclosed. www.billskhakis.com

More M&A

• Alphabet has agreed to buy a group of developer tools, including Fabric and Crashlytics, from Twitter for an undisclosed amount. http://bloom.bg/2jLxpO2

Cosco Group, a Chinese conglomerate, is in talks to acquire Hong Kong-based shipping company Orient Overseas (HK: 316) for upwards of $4 billion, according to the WSJ. http://on.wsj.com/2jP4Krr


• GGV Capital is in talks to raise its first yuan-denominated fund. The VC fund has offices in both China and Silicon Valley, and last year raised $1.2 billion for a pair of global funds. http://reut.rs/2k6JHUL

• Rocket Internet has raised $1 billion for a new fund focused on early-stage and growth-stage tech startups. Goldman Sachs served as placement agent. http://bit.ly/2iFaqHt

• Sagard Private Equity Partners of France has re-opened its third fund to investors, doubling its size to €800 million. http://bit.ly/2jP3ynZ

• Silver Point Capital has raised $552 million for a new credit fund, per an SEC filing. http://bit.ly/2jbZU6G

It's Personnel

• Daphne Dufresne has joined GenNx360 Capital Partners as a managing partner. She previously was a founding partner and managing director at RLJ Equity Partners. www.genx360.com

• Joe Fortunato has joined J.W. Childs Associates as an operating partner, with a focus on the specialty retail market. He currently is executive chairman of Comoto Holdings, the parent company of Cycle Gear and Revzilla.com. www.jwchilds.com

• Fatine Layt, former chair and managing partner of Oddo Corporate Finance, has joined investment and merchant bank LionTree to launch a Paris office.

• Jay Leek has stepped down as chief information security officer at The Blackstone Group, where he will be succeeded by his deputy Adam Fletcher. Leek's next role will be as a managing director with venture firm ClearSky.

• Scott McCorkle, former CEO of Salesforce Marketing Cloud, has joined Indianapolis-based venture studio High Alpha as an executive in residence. www.highalpha.com

• Axel Meyersiek has joined BC Partners as a Frankfurt-based senior partner. He previously was a managing director with TowerBrook Capital Partners. http://bit.ly/2k43j7X

• Lenny Pruss has joined early-stage VC firm Amplify Partners as a partner, after having spent the past year as a principal at Redpoint Ventures. Amplify also has promoted David Beyer to principal, and added Ted Stinson (executive-in-residence) and Evan Sparks (entrepreneur-in-residence). http://bit.ly/2iEZycA

• Sun Capital Partners has promoted Daniel Florian, Jeremy Stone and Jared Wien to managing director. It also promoted Todd Plosker to managing director and head of capital markets. www.suncappart.com

• Arnaud van Tichelen has joined PAI Partners in Paris, after having spent the past two years at CPP Investment Board as an associate focused on direct private equity investments.

• Arboretum Ventures has promoted Tom Shebab to managing director. He joined the firm in 2014 as a principal. www.arboretumvc.com

Final Numbers: 2016 Mid-Market M&A
Dan Primack