Nov 8, 2018

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

Photo by Al Drago, Pool/Getty Images

President Trump yesterday said during a lengthy press conference that he'd be open to raising taxes on corporations, as part of a hypothetical compromise with House Democrats to lower individual rates on the middle class.

  • Trump said this in response to a specific question, not spontaneously or from prepared remarks.
  • He also said any upward adjustment would have to be proposed by House Democrats, and cautioned that it would be difficult to get through the GOP-controlled Senate.
  • But, caveats aside, he could have simply said: "No, we're keeping corporate rates where they are." He didn't.
  • The markets either didn't notice, didn't care, or didn't believe him. Or they took Trump at his word that he won't do deals with House Democrats if they investigate his administration (which they will).
  • It's also theoretically possible that a compromise could include changes to carried interest tax treatment, which Trump (and many Democrats) wanted in the original tax cut bill but didn't get.

Trump and Republicans intended for the corporate tax cuts to be permanent, while most of the individual cuts are scheduled to sunset in 2025. But there isn't really such as thing as "permanent" when it comes to tax rates, which are always subject to legislative adjustment.

• More from the midterms: Yesterday's Pro Rata podcast focused on what we still don't know, what comes next and the role Silicon Valley could play in 2020. Listen here.

Chuckles from Omaha: Hedge funds in October had their worst month in seven years, despite a Halloween rally, according to multiple reports. The big downward driver appears to have been tech stocks.

💡 Bright idea: Power utility National Grid is launching a corporate venture capital group that aims to invest around $250 million into at least 30 companies over the next few years.

  • It will be led by Lisa Lambert, who previously was a managing partner with The Westley Group, before which she spent 19 years at Intel Capital.
  • Axios energy reporter Ben German goes deeper: "The new branch is designed to be an in-house VC firm for the power giant. But more broadly, it's aiming to help incubate and develop companies, while bringing more innovation overall to National Grid, which provides power and gas to millions of customers in the U.K. and northeast U.S. states."
No, she's not involved. But she is a cousin to those who are.

Margarita Louis-Dreyfus has secured around $900 million in financing to raise her stake in global commodities trader Louis Dreyfus Co. from 80% to 99.6%. She did not disclose the new capital source, although she's previously obtained loans from Credit Suisse.

  • Why it's the BFD: Because Louis-Dreyfus is legally obligated to purchase the shares by year-end, per an arbitration agreement with estranged family members, but it had been unclear if she'd be able to come up with the funds.
  • Bottom line: "LDC, which shipped 81 million tons of commodities last year, is part of a small group of trading houses that dominate global agricultural trade
    flows." — Neil Hume, FT
Venture Capital Deals

• Hellobike, a Chinese bike-share company, is in talks to raise more than $400 million in a SoftBank-led funding round, per Reuters.

• TripActions, a Palo Alto-based corporate travel management company, raised $154 million in Series C funding at a post-money valuation north of $1 billion. Andreessen Horowitz led, and was joined by return backers Lightspeed Venture Partners, Zeev Ventures and SGVC.

• Grab, a Singapore-based ride-hail and finance company, raised $50 million from Kasikornbank PCL. The deal presages Grab’s expansion of its digital wallet product into Thailand, and comes just one day after Grab raised $250 million from automakers Kia and Hyundai.

• RealtimeBoard, a San Francisco-based visual collaboration platform, raised $25 million in Series A funding. Accel led, and was joined by seed backer AltaIR Capital.

• Mayvenn, an Oakland-based online seller of haircare prodects and services, raised $23 million led by Essence Ventures.

🚑 Oncology Analytics, an Atlanta-based provider of oncology benefits management software, raised $21 million in Series B funding. Oak HC/FT led, and was joined by McKesson Ventures and return backers Blue Cross Blue Shield Venture Partners and Sandbox Advantage Fund.

• Zopa, a British P2P lender, raised £16 million in new funding.

• ShipMonk, a Deerfield Beach, Fla.-based provider of e-commerce order fulfillment services and inventory management software, raised $10 million in Series A funding. SJF Ventures led, and was joined by Grotech Ventures and Supply Chain Ventures.

• Flex Lighting, a Chicago-based provider of front lighting for low power displays, raised $9 million in Series B funding. Energy Foundry led, and was joined by SABIC Ventures and Bascom Ventures.

🚑 Opternative, a Chicago-based developer of digital eyecare technologies, raised $9 million. Trust Ventures and Pritzker Group VC co-led, and were joined by return backer Jump Capital.

• BigBox VR, a Seattle-based developer of online VR multiplayer games, raised $5 million in seed funding led by Shasta Ventures.

• Drivetime, a San Francisco-based developer of voice games for drivers, raised $4 million in eed funding from Felicis Ventures, Fuel Capital, Steadfast Venture Capital, Webb Investment Network, Sinai VC, Canaan Partners, Access Ventures, Founders Fund, Index Ventures and The Chernin Group.

• Yulife, a London-based employee life insurance startup, raised £3 million led by LocalGlobe.

🚑 HuiyiHuiying, a Chinese medical imaging startup, raised an undisclosed amount of funding from Intel Capital.

• KKday, a Taiwanese online travel startup KKday raised an undisclosed amount of Series B funding from Line Ventures, Alibaba, CDIB Capital and Monk’s Hill Ventures.

Private Equity Deals

CommScope (Nasdaq: COMM) agreed to buy Suwanee, Ga.-based set-top box maker Arris International (Nasdaq: ARRS) for approximately $7.4 billion in cash (including debt), or $31.75 per share. As part of the deal, The Carlyle Group will invest $1 billion for a minority equity stake in CommScope, which it has once owned but sold out of in 2016.

Continental, a Troy, N.Y.-based food management company owned by New Heritage Capital, acquired Ferndale, Mich.-based United Vending.

Drilling Tools International, a Houston-based portfolio company of Hicks Equity Partners, acquired RIK Inc., a Casper, Wy.-based renter of downhole drilling tools.

• iCapital Network, a New York-based fintech platform for alternative investments, raised an undisclosed amount of funding from The Carlyle Group. Last week it announced investments from Blackstone, BlackRock, Credit Suisse, Morgan Stanley and UBS.

• Pamlico Capital invested in TRG Screen, a New York-based provider of enterprise subscription management solutions.

Public Offerings

CNFinance Holdings, a Chinese provider of home equity loans, raised $49 million in its IPO. The company priced 6.5 million shares at $7.50 (low end of range), for an initial market cap of $567 million. It will trade on the NYSE (CNF) and used Roth Capital Partners as lead underwriter. The company originally filed to raise $200 million, co-led by J.P. Morgan and Credit Suisse.

Liquidity Events

🛴 Ford Motor Co. (NYSE: F) agreed to buy San Francisco-based e-scooter company Spin, as first reported by Axios' Kia Kokalitcheva. The deal is worth close to $100 million, according to two sources, though another earlier put the price tag in the range of $40 million, which is around where Spin was valued after its Series A funding last year from backers like Exponent and Grishin Robotics.

One Equity Partners agreed to sell PeroxyChem, a Philadelphia-based provider of chemicals to the pharma and cosmetics markets, to Germany’s Evonik for $625 million.

Symantec (Nasdaq: SYMC) acquired Appthority, a San Francisco-based provider of mobile app security analysis that had raised around $27 million from firms like Symantec, ForgePoint Capital, Blue Coat Systems, Knollwood Investment Advisory, Venrock, USVP and Correlation Ventures.

Symantec also bought Javelin Networks, a cybersecurity company focused on Microsoft Active Directory (AD) attacks. Javelin, originally founded in Israel but now located in the U.S., raised around $5 million last year from RSL Capital, Hillsven and UpWest Labs.

More M&A

Anadarko Petroleum Corp. (NYSE: APC) agreed to sell almost all of its midstream assets to Western Gas Partners (NYSE: WES) for $4.02 billion.

McMillan Shakespeare (ASX: MMS) agreed to buy rival Australian administrative services company Australian Eclipx Group (ASX: ECX) for A$911 million in cash and stock.

The Muse, a New York-based recruitment site, acquired TalentShare, a San Francisco-based job candidate matching platform that had raised around $11 million from firms like Cervin Ventures and Great Oaks VC. The Muse’s investors include Aspect Ventures and DBL Partners.

Toshiba agreed to pay $806 million for China’s ENN Ecological Holdings Co. to take over Toshiba’s U.S. liquified natural gas business.

Wells Fargo (NYSE: WFC) is considering a sale of its retirement services unit, which could fetch over $1 billion, per Bloomberg.

Xilinx (Nasdaq: XLNX) is working on a takeover bid for Silicon Valley chipmaker Mellanox (Nasdaq: MLNX), which has a market cap of around $5 billion, according to CNBC.


🚑 Biomatics Capital Partners, a Seattle-based VC firm, raised $300 million for its second fund.

It's Personnel

Scott Brown joined Sapphire Ventures as VP of marketing. He previously was with Quantcast.

Mary Kayser joined San Francisco Equity Partners as CFO and chief compliance officer. She previously served in similar roles at VMG Partners.

Richard Saltzman has been ousted as CEO of Colony Capital, and will be succeeded by firm founder Tom Barrack.

Jeff Wright joined Pantheon as a principal on its client services team. He previously was with HarbourVest Partners.

Final Numbers
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Data:; Chart: Axios Visuals

Shares of medical marijuana company Tilray surged yesterday after Jeff Sessions resigned as attorney general.

  • Tilray stock was already climbing as part of a broader market rally and some pro-weed results on state ballot initiatives, but really took off after the mid-afternoon announcement.

The bottom line: Sessions was viewed as particularly antagonistic toward legalized marijuana, for either medicinal or recreational use. Acting AG Matthew Whitaker does not appear to have made many public comments on the matter, outside of a 2009 resignation letter in which he cited his success in reducing the availability of marijuana and other drugs.

Dan Primack