Jun 13, 2018

Axios Pro Rata

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Top of the Morning

Source: Giphy

A federal judge yesterday swatted down the U.S. Department of Justice like it was a 30 year-old refusing to leave his parents' house, giving AT&T a clean victory in its efforts to buy Time Warner for $85 billion. Read the ruling.

Three big things to know:

  1. This will set off a wave of M&A activity. The most immediately will be a Comcast vs. Disney battle for 21st Century Fox, but the ruling also emboldens vertical mergers in other industries like healthcare. Go deeper.
  2. The judge fully accepted AT&T's fundamental argument that the line between media creation and media distribution is gone, thanks to the rise of companies like Netflix and Facebook. Sprinkle in the reversal of net neutrality rules, and it's a brand new Internet.
  3. The White House must be smarting. Not only because of the time and money spent by DoJ, but also because of President Trump's loud opposition to the deal from nearly the moment it was announced. One silver lining for Trump may be that AT&T has no need to appeal, perhaps to a judge who would have been willing to hear arguments that the CNN-hating White House influenced DoJ's actions. One worry for everyone is that that DoJ will now be gun-shy going forward, even in more clear-cut antitrust cases.

• SPAC stuff: Far Point Acquisition, the fintech-focused blank check company formed by former New York Stock Exchange president Tom Farley and Dan Loeb's Third Point, began trading yesterday after raising $550 million in its IPO.

I spoke with Farley, who told me his move was partially borne of seeing all the interesting fintech acquisitions that NYSE turned down because they weren't a good strategic fit. He also had a CEO itch, which he was unlikely to scratch at NYSE with Jeff Sprecher firmly in place atop parent company ICE.

"I had learned a lot about the SPAC structure from all the ones that went public on NYSE, but one big fly in the ointment is that investors can redeem... So I made one phone call to Dan Loeb, who I'd gotten to know over the years, and asked him to provide a $400 million backstop as a partner and to provide expertise. He said yes, and here we are."

Expect Far Point to seek out B2B players in overlooked sectors like market infrastructure, with Farley saying it's more likely to seek out a 6% growth business he can try bringing to 12%, as opposed to a hypergrowth business.

"My last day at NYSE was the Friday before Memorial Day, and my colleagues surprised me by having me ring the bell. I walked out onto the floor and got a standing ovation, which brought tears to my eyes. But then they had me ring the bell again for Far Point, just two weeks later. Now everyone's looking at me like the uncle who stayed too long at the party."

Source: Giphy

Bloom Energy, a Silicon Valley fuel cell company that has raised over $1 billion in funding, has filed for an IPO. It plans to trade on the NYSE under ticker BE with J.P. Morgan as lead underwriter, and reports a $22 million net loss on $169 million in revenue for Q1 2018.

  • Why it's the BFD: Because many (yes, including me) had lost faith that 17 year-old, mega-hyped Bloom would ever go public.
  • Flashback: Sitting in a Bloom investor's office in 2010, being told the company would go public within a year at a valuation "floor" of $20 billion.
  • Comp: CEO KR Sridhar made a base salary of $524k last year, while directors Colin Powell and Kelly Ayotte received total cash and stock comp of $432k and $355k, respectively.
  • Bottom line: "Bloom Energy converts standard low-pressure natural gas or biogas into electricity through an electrochemical process without combustion. The Bloom Energy Server provides high efficiency energy with lower emissions. Bloom Energy systems are typically installed with electricity sold as a service. The company's customer base includes 25 of the Fortune 100." – Larry Dignan, ZDNet
Venture Capital Deals

Grab, a Southeast Asia-focused ride-hail company, raised $1 billion from Toyota at a reported valuation north of $10 billion. The company recently bought Uber’s Southeast Asia business. http://axios.link/Bl2V

🏠 Opendoor, a San Francisco startup that buys and sells homes, has raised $325 million in new funding led by General Atlantic, Access Technology Ventures and home-builder Lennar. http://axios.link/biS5

9f Group, a Beijing-based online lending company, raised $65 million in Series D funding from Famous Group and Plentiful International. http://axios.link/qG0u

Back Market, a French online marketplace for refurbished electronic products and appliances, raised $48 million from Groupe Arnault, Eurazeo, Aglaé Ventures and Daphni. www.backmarket.com

Amino, a developer of fan community apps, raised $45 million in Series C funding from Hearst Ventures and return backers GV, Venrock, Union Square Ventures, Goodwater Capital and Time Warner Investments. http://axios.link/cEUn

🚑 Broncus Medical, a San Jose, Calif.-based developer of diagnostic and therapeutic technology for lung disease, raised $15 million in Series A funding from Intuitive Surgical (Nasdaq: ISRG). www.broncus.com

Exotec Solutions, a French developer of robots for e-commerce warehouses, raised €15 million from Iris Capital and return backers 360 Capital Partners and Breega. http://axios.link/3bIW

🚑 Andrew Alliance, a Geneva-based developer of liquid handling robotics for life sciences, raised $14 million in Series C funding from Tecan Group, Waters Corp., Inpeco, Rancilio Cube, Sam Eletr Trust and Omega Funds. www.andrewalliance.com

Jane.ai, an employee-facing digital assistant, raised $8.4 million in Series A funding from undisclosed investors. http://axios.link/1pvT

Macy’s (NYSE: M) has acquired a minority equity stake in B8ta, a Palo Alto-based retail-as-a-service startup whose backers include Comcast Ventures and Khosla Ventures, as part of a strategic partnership. http://axios.link/vKGP

Private Equity Deals

BC Partners has acquired Italian pastry company Forno d'Asolo from 21 Partners at an enterprise value of around €300 million, per Reuters. http://axios.link/dGfR

Blackstone has agreed to acquire Investa Office Fund (ASX: IOF), an Australian real estate investment trust, for A$3.08 billion. http://axios.link/lRjZ

Blackstone and KKR made it to the second round of bidding for a minority stake in Swiss sports data group Sportradar, which is owned by EQT Partners, per Reuters. The deal is being managed by Evercore, and could value the company north of €2 billion. http://axios.link/rCAR

🚑 Family Treatment Network, a portfolio company of Pharos Capital Group, has acquired CCMC School, a New Britain, Conn.-based provider of special ed services for students with behavioral, emotional and learning challenges. www.ccmcschool.com

🚑 Platinum Equity has agreed to buy diabetes monitoring business LifeScan from Johnson & Johnson (NYSE: JNJ) for $2.1 billion. http://axios.link/uNJN

Serent Capital has invested in Kore Software, a New York-based provider of business management software for the sports and entertainment industries. www.koresoftware.com

Vintage Capital has increased its takeover offer for Rent-A-Center (Nasdaq: RCII) from to $14 per share, after the company said it was no longer for sale. Vintage owns 6% of the company, and had originally bid $15 per share before lowering its offer to $13 per share. http://axios.link/eJfq

Public Offerings

Adyen, a Dutch payments platform that has raised more than $250 million in VC funding, priced its IPO at a €7.1 billion valuation, and saw its shares pop over 66% at market open in Amsterdam. http://axios.link/PPVZ

⛽ Apollo Global Management has filed confidential IPO docs for a blank check company that would invest in North American oil and gas pipeline infrastructure, per Bloomberg. http://axios.link/ecEX

More M&A

⛽ CK Infrastructure Holdings (HK: 1038) has offered to buy APA Group (ASX: APA), Australia’s largest gas pipeline company, for nearly A$13 billion. http://axios.link/6NPc

Societe Generale (Paris: SOGN) is seeking a buyer for its Poland business (Eurobank), per Reuters. http://axios.link/8elT


🚑 Alta Partners has raised $130 million for a new VC fund focused on biotherapeutics and tech-enabled healthcare services. www.altapartners.com

Blackstone held a $2.3 billion final close on its debut Asia private equity fund. It also raised around $7.1 billion for its second Asia real estate fund. www.blackstone.com

Dyal Capital Partners is in advanced talks to buy an ownership stake in credit manager HPS Investment Partners, according to Reuters. http://axios.link/OrHA

LLR Partners has closed its fifth lower middle-market private equity fund with $1.2 billion. www.llrpartners.com

Mubadala Investment Co. has launched a $400 million VC fund focused on European tech companies. Limited partners include SoftBank.

Triton, a London-based turnaround firm, is planning to seek at least €3 billion for its fifth flagship fund, per PE International. http://axios.link/5gLh

Final Numbers
Source: 2014 research paper by Dennis Coates, U Maryland econ professor and president of the North American Association of Sports Economists.

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