Nov 20, 2017

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

The word coming out of Broadcom is that it's fully prepared to nominate a slate of directors for Qualcomm by the Dec. 8 deadline, unless the two chipmakers agree to a merger beforehand. Or, put another way, Broadcom will nominate a slate of directors for Qualcomm by the Dec. 8 deadline.

  • PE angle: Silver Lake, which is committing up to $5 billion in financing to support the deal, does not have any hostile takeover restrictions in its limited partnership agreements. As for its rhetorical about-face from the Dell/Blackstone/Icahn days, the (tenuous) argument here would be that Silver Lake is backing an existing management team (Broadcom) rather than being a purely hostile actor (no, Qualcomm wouldn't see it quite so generously).

• All hail breaks loose: SoftBank still has not launched its tender for Uber shares, and is not to expect it until next week at the earliest. I'm also told that, once the 20-business day clock does begin, SoftBank has the ability to change its offer price at least once within the tender period.

• Big name hire: Former U.S. Treasury Secretary Jack Lew has joined private equity firm Lindsey Goldberg as a partner.

  • This means both Obama-era treasury secretaries are now private equity executives, as Tim Geithner previously joined Warburg Pincus as president.
  • This is expected to be a fulltime job for Lew, although he'll remain as visiting professor at Columbia University.
  • Lew and Lindsay Goldberg CEO Alan Goldberg both live in the same town (Riverdale, N.Y.).

• Meredith cries wolf: Time Inc. rank-and-file I speak with aren't thrilled about the prospect of a Koch-backed takeover bid from Meredith, but they also aren't too freaked out yet — largely because Meredith has been "preparing a takeover bid" several times before. Until something official crosses the wire, many Time employees won't believe it.

• Silver stitching: I spoke on Friday with Stitch Fix CEO Katrina Lake about her company's IPO price disappointment, competing with Amazon and its focus on profitability over unicorn fundraising. Read it here.

  • Thought bubble: Stitch Fix struggled in its early days to raise VC funding, partially due to both its industry (fashion) and founder demographics (Asian female). But even though most of Sand Hill Rd. was clearly wrong back in 2013, the IPO reception feels a bit like history repeating itself.

• Symmetry: We're still waiting to see if the Justice Dept. will do it alone in blocking AT&T's proposed takeover of Time Warner, after getting shut out by state AGs. In the meantime, let's remember that AT&T has some Thanksgiving week history when it comes to mega-mergers:

  • 2011: The FCC announced on the Wednesday before Thanksgiving that it would oppose AT&T's proposed $39 billion takeover of T-Mobile. AT&T then withdrew its merger application from the FCC on Thanksgiving morning, apparently to prevent the release of an FCC report on its reasons for opposing the deal (a 109-page report that the FCC still published the following week).
  • "As God is my witness, I thought turkeys could fly." — Legendary radio executive Arthur Carlson

Alibaba Group (NYSE: BABA) has agreed to invest around $2.87 billion for a 36.16% stake in Chinese hypermart operator Sun Art (HK: 6808).

  • Why it's the BFD: Because this is a major shot at both Amazon and Wal-Mart in the battle for global retail supremacy. In terms of Amazon, this is just Alibaba's latest addition to a brick-and-mortar wall that predates and towers over Whole Foods and automated convenience stores. If Alibaba chooses to go physical in the U.S., it will have much more knowledge and data than does Amazon. For Wal-Mart, this is a direct challenge to its China business.
  • Bottom line: "Alibaba has invested upwards of $9.3 billion in brick-and-mortar stores since 2015. It has launched many un-staffed concept shops in the past year, including grocery and coffee stores." — Reuters
Venture Capital Deals

• Shouqi Limousine & Chauffeur, a Chinese ride-booking app backed by local taxi company Shouqi Group, has raised around $105 million in Series B funding from NIO Capital, Baidu and Silk Road Huachuang Beijing.

• Deliveroo, a London-based food delivery company, has raised $98 million in additional Series F funding (bringing the round total to $482m). No word on new investors. Existing backers include T. Rowe Price, Fidelity, DST Global, General Catalyst, Accel and Index Ventures.

• aCommerce, a Bangkok-based e-commerce enabler for existing brands, has raised $65 million in Series B funding. KKR-backed Emerald Media led, and was joined by return backers Blue Sky, MDI Ventures and DKSH.

• GoSpotCheck, a Denver-based field execution management SaaS platform, has raised $21.5 million in Series B1 funding co-led by return backers Insight Venture Partners and Point Nine Capital.

• Scalyr, a San Mateo, Calif.-based log management and server monitoring service, has raised $20 million in Series A funding. Shasta Ventures led, and was joined by return backers Bloomberg Beta, Susa Ventures and Heroic Ventures.

• Trocafone, a Brazil-based online marketplace for used electronics, has raised $15 million in new VC funding from Callfort, MIT Castor Ventures Fund, FJ Labs, Rocketship and the Mercado Libre Fund.

🚑 Oviva, developer of an anti-obesity app, has raised $12 million in Series A funding from Albion Capital, Eight Roads Ventures, F-Prime Capital Partners, Partech Ventures and Walking Ventures.

🚑 Ncardia, a Belgium-based developer of stem cell-derived therapies for cardiac and neural conditions, has raised €10.5 million in Series B funding led by Épimède.

• AISense, a Los Altos, Calif.-based provider of voice conversation digitization software, has raised $10 million in Series A funding. Horizons Ventures led, and was joined by Draper Associates and DraperDragon Fund.

• VidMob, a New York-based video creation network and platform, has raised $7.5 million in Series A funding from Manifest Investment Partners, Interlock Partners, Stampede Ventures, Acadia Woods Partners and Macanta Investments.

• Tech in Asia, a Singapore-based media and events startup, has raised $6.6 million in funding led by South Korean conglomerate Hanwha.

• Zego, a UK-based pay-as-you-go insurance provider, has raised £6 million in Series A funding from Balderton Capital.

🚑 Physera, a Palo Alto, Calif.-based app for managing physical therapy, has raised $2.8 million from Innovation Endeavors, Lux Capital, Expa, Slow Ventures and iD Ventures.

• Gainfully, a San Francisco-based B2B insurance and financial distribution marketplace, has raised $2.5 million in funding led by MassMutual Ventures.

• Tortuga Logic, a Palo Alto, Calif.-based developer of chip-level system security solutions, has raised $2 million in seed funding from Eclipse Ventures.

• Visage, a San Francisco-based job candidate sourcing startup, has raised $1.5 million in seed funding from the Urban Innovation Fund, GrowthX, NewFund and FundersClub.

Private Equity Deals

⛽ Ancala Partners has acquired stakes in two North Sea gas pipelines from Apache Corp. (NYSE: APA).

• Blue Equity has acquired Liquor Barn, a Kentucky chain of alcohol retailers, from Liquor Stores (TSX: LIQ).

⛽ FCX Performance, a Columbus, Ohio-based portfolio company of Harvest Partners, has acquired The Eads Co., a Stafford, Texas-based distributor of flow control products to end markets like petrochemical, from CapStreet.

• KKR and Nordic Capital are circling Hyperion, a Fair Lawn, N.J.-based manufacturer of metal cutting and drilling equipment, which is currently owned by Swiss-listed Sandvik, according to Reuters. Binding offers are due next month for Hyperion, which is expected to fetch more than $400 million.

Public Offerings

Casa Systems, an Andover, Mass.-based maker of cable and mobile edge devices, has filed for a $150 million IPO. It plans to trade on the Nasdaq under ticker CASA, with Morgan Stanley and Barclays serving as lead underwriters. The company reports $6 million of net income on $234 million in revenue for the first nine months of 2017. Shareholders include Summit Partners (52% pre-IPO stake) and Liberty Global Ventures (6%).

More M&A

• Marvell Technology Group (Nasdaq: MRVL) has agreed to acquire rival chipmaker Cavium (Nasdaq: CAVM) for around $6 billion, according to Reuters.

• Santander is in talks to buy most of Deutsche Bank's business in Poland, per Reuters.

• Maria Contreras-Sweet, former head of the U.S. Small Business Administration, is part of an investor consortium that it offering $275 million to buy embattled film producer The Weinstein Co.

⛽ Vale SA has agreed to sell its fertilizer manufacturing facility in Cubatão, Brazil to Norway's Yara International for $255 million.

⛽ VNG, a German gas supplier, has hired Citi to sell a 51% stake in its Norwegian and Danish business, according to Reuters. The deal could be worth up to $500 million.


The Canada Pension Plan Investment Board is considering investing in new venture capital funds again, more than a decade after bailing on the asset class.

• Crosslink Capital is raising up to $250 million for its eighth VC fund, according to an SEC filing.

• SK Telecom, Hyundai Motor Co., Hanwha and Element AI have formed a $45 million venture fund focused on global AI startups.

It's Personnel

Sarah Catanzaro has joined VC firm Amplify Partners as a principal. She previously was a data partner with Canvas Ventures and, before that, head of data for Mattermark.

• Pierre-Olivier Desplanches has joined Montagu Private Equity as a Paris-based director, after having spent the past two decades with The Carlyle Group.

• Shasta Ventures has promoted principals Nikhil Basu Trivedi, Jacob Mullins and Nitin Chopra to partner.

Final Numbers

More year-to-date debt data from Thomson Reuters:

  • Global debt capital markets activity is down 2% from 2016.
  • China investment-grade corporate debt is down 21%.
Dan Primack