Jun 11, 2018

Axios Pro Rata

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Top of the Morning

Source: Giphy

Admit it. You figured the odds of trade war with Canada were akin to your kid's school musical winning a Tony award.

  • Among all the tweets, the most consequential may have been this one from President Trump, in which he wrote, "Our Tariffs are in response to [Canada's] of 270% on dairy!"
  • The U.S. has been justifying its new tariffs on national security grounds, not as an economic tit-for-tat. The former remains a tough rhetorical hill to climb, but at least it's a legal argument. The latter, on the other hand, could create troubles both domestically (courts/Congress) and internationally (WTO).
  • Axios special report: The new era of global trade wars

Breaking: Workday (Nasdaq: WDAY) has agreed to buy Adaptive Insights, a Palo Alto-based maker of cloud-based financial management software that had been planning to go public this week.

  • The price is $1.55 billion, which is more than double the $705 million fully-diluted value that Adaptive Insights would have fetched in the middle of its IPO range.

Situational awareness: Tomorrow we expect to get a judge's ruling on AT&T's proposed acquisition of Time Warner, which is opposed by the U.S. Justice Dept. Here's a refresher.

On deck: DraftKings is said to be speaking with investors about raising another $150 million to $200 million in funding, in order to better build out its sports wagering business. The Boston-based company recently partnered with Resorts Atlantic City to offer betting in New Jersey, and expects that it will have the required licenses by the start of NFL season.

  • This comes on the heels of the Supreme Court knocking down a federal ban on sports betting, with Delaware and NJ already legalizing, and rival FanDuel being acquired by Paddy Power Betfair.
  • We also hear that Platinum Eagle Acquisition Corp., the SPAC that earlier this year spoke about merging with FanDuel, has also reached out to DraftKings about a similar transaction.
  • DK isn't talking publicly about financing, but has told Axios that it's on an net revenue run rate of $192 million with 10 million registered users.

• Sidewalk wars: Last week we scooped that GV is leading a $250 million investment in e-scooter and e-bike sharing company Lime. Now we have some more details:

  • GV is investing $50 million, which will basically be matched by new investor IVP and return backer Andreessen Horowitz. Also participating is GV parent company Alphabet, with the remainder filled by insiders like Coatue Management ($15m or so).
  • As previously discussed, Sequoia is leading a $150 million investment into rival Bird, but there will be a second tranche (Delaware filing puts the total at $200 million). Pre-money for Lime is around $750 million, while Bird's pre-money is around $1 billion.
  • Related: Kia writes about Skip (fka WayBots), which wants to win the SF scooter wars by (gasp!) following the rules.

Jessica Alba's Honest Company last week announced $200 million in minority equity funding from L Catterton. Now there's a Delaware filing (per Lagniappe Labs) for $50 million in new Series F shares, suggesting a large secondary tranche, at a flat valuation to last year's Series E round (which was at a decreased valuation from the mid-2015 Series D, making it an under-corn).


Source: Giphy

KKR has agreed to acquire physician staffing and services company Envision Healthcare (NYSE: EVHC) for approximately $9.9 billion (including $4.33b in assumed debt), or $46 per share in cash.

  • Why it's the BFD: Because Envision has come under serious scrutiny for its ER billing policies, and going private could further decrease transparency.
  • Notable absence: Hospital operator HCA did not participate in the final agreement, despite prior reports that it was working with KKR.
  • Bottom line: "The company has gained business from hospitals that have come to rely on outside contractors to increase the efficiency of some areas, like emergency rooms, that have been financial drains in the past. The company lost $228 million last year, though it collected $7.8 billion in revenue." Michael de la Merced, NY Times
Venture Capital Deals

Byton, an electric car startup, raised $500 million from a group of backers that includes Chinese battery maker CATL. http://axios.link/qc2V

Gett, a New York-based ride-hail company, raised $80 million in new funding at around a $1.4 billion post-money valuation, led by existing backer Volkswagen. http://axios.link/NlVu

BlueVine, a Palo Alto-based provider of invoice factoring and small business lines of credit, raised $60 million in Series E funding led by Menlo Ventures. http://axios.link/mshI

Aye Finance, a provider of micro-loans to small businesses in India, raised $21.5 million in Series C funding. CapitalG led, and was joined by return backers SAIF Partners and LGT. http://axios.link/HH8t

Bedrock Analytics, an Oakland-based analytics and insights automation platform for the consumer packaged goods market, raised $7.2 million in funding co-led by Cervin Ventures and Illuminate Ventures. www.bedrockanalytics.com

WhyHotel, a Baltimore-based pop-up hotel startup, raised nearly $4 million in seed funding led by Camber Creek. http://axios.link/ZsOt

Eon Foundation, a blockchain game publishing startup, raised $5 million in funding led by Cherubic Ventures. http://axios.link/XznL

Private Equity Deals

Apollo Global Management and Starboard Restructuring Partners have offered to invest around $131 million in convertible notes for Brazilian appliance retailer Maquina de Vendas, per Reuters. http://axios.link/Ct9W

BCA Marketplace (LSE: BCA), a British used car auctioneer operating under the WeBuyAnyCar brand, said it has rejected a 1.6 billion takeover offer from Apax Partners. The 200 pence per share bid represented a 5.2% discount to Friday’s closing stock price. http://axios.link/y7df

ITRenew, a Newark, Calif.-based portfolio company of Zelnick Media Capital, has acquired Splitted-Desktop Systems, a French design and engineering firm focused on open hardware compute and storage systems. www.itrenew.com

Public Offerings

• 6 companies expect to price IPOs on U.S. exchanges this week: Avalara, Charah Solutions, Puxin, U.S. Express Enterprises, Verrica Pharmaceuticals and Far Point Acquisition (the SPAC led by ex-NYSE prez Tom Farley, which recently upsized to $500m). http://axios.link/ZF4E

🚑 Autolus Therapeutics, a British immune-oncology company, set IPO terms to 7.8 million shares at $15-$17. It would have a fully diluted market value of $620 million, were it to price in the middle. The pre-revenue company plans to trade on the Nasdaq (AUTL), with Goldman Sachs as lead underwriter. Shareholders include Syncona (40.6% pre-IPO stake), Woodford Investment Management (26.4%) and Arix Bioscience (9.1%). www.autolus.com

🚑 Kezar Life Sciences, a San Francisco-based developer of drugs to treat autoimmune diseases, set IPO terms to 4.7 million shares at $14-$16. It would have a fully diluted market value of $295 million, were it to price in the middle. The pre-revenue company plans to trade on the Nasdaq (KZR) with Jefferies as lead underwriter. It has raised around $78 million from firms Cormorant Asset Management and Morningside Ventures (15.5% pre-IPO stake), Cormorant (9.9%), Cowen Healthcare (7.6%), EcoR1 Capital (5.5%) and Omega Funds (5.2%). www.kezarlifesciences.com

🚑 Magenta Therapeutics, a Cambridge, Mass.-based developer of bone marrow transplant therapeutics, set IPO terms to 6.7 million shares at $14-$16. It would have a fully diluted market value of $538 million, were it to price in the middle. The pre-revenue company plans to trade on the Nasdaq (MGTA) with J.P. Morgan as lead underwriter. It around $150 million from firms like Third Rock (28.91% pre-IPO stake), Atlas Venture (17.48%), GV (12.05%) and Casdin Capital (5.9%). www.magentatx.com

Mercari, a Japanese marketplace app for secondary goods, priced its IPO at the top of its indicative range, meaning it would raise around $1.19 billion at a $3.7 billion valuation. It plans to begin trading in Tokyo next week. The company has raised over $160 million from firms like East Ventures, Global Brain, ITOCHU, Mitsui & Co. and World Innovation Lab. http://axios.link/D4z3

Xiaomi, the Chinese consumer electronics giant prepping for an IPO, disclosed a $1.1 billion loss on revenue of $5.4 billion for 2018 Q1 because of one-time accounting charges. Excluding those charges, it reported $265 million in profit. http://axios.link/pUON

Liquidity Events

🚑 Mars Petcare has agreed to acquire AniCura, an operator of 200 animal hospitals in Europe, from Nordic Capital and Fidelio Capital. http://axios.link/CQBa

Splunk (Nasdaq: SPLK) is acquiring VictorOps, a Boulder, Colo.-based incident management and IT alerting platform, for $120 million. VictorOps had raised around $36 million in VC funding from firms like Foundry Group, Costanoa VC and Shea Ventures. http://axios.link/QZ9A

Uber is considering a takeover offer for Motivate, the bike-share company behind such programs as CitiBike in New York and Ford GoBike in San Francisco, Axios first reported on Friday. http://axios.link/0HZc

Workday (Nasdaq: WDAY) is acquiring Rallyteam, a San Francisco-based talent development platform that last year raaised $8.6 million in Series A funding from Norwest Venture Partners, Storm Ventures, Cornerstone OnDemand and Wilson Sonsini Goodrich & Rosati. http://axios.link/ToPe

More M&A

Inmarsat (LSE: ISA), a British satellite operator, rejected a takeover offer from EchoStar (Nasdaq: SATS). http://axios.link/KCgx

Rent-A-Center (Nasdaq: RCII) said it is ending a strategic review after not receiving any adequate acquisition offers. http://axios.link/Kkq4


Firstminute Capital, a London-based early-stage VC firm, raised $100 million for its debut fund. http://axios.link/hbnQ

Treun Capital has been launched as a new European private equity firm by Paul Canning (ex-H.I.G. Capital) and Alex White (ex-BDO). http://axios.link/V215

It's Personnel

Mark Garrett, former EVP and CFO of Adobe Systems, has joined General Atlantic as a special advisor. www.generalatlantic.com

RBC fired Blair Fleming, head of U.S. investment banking and capital markets, for failing to disclose a workplace relationship, per the FT. http://axios.link/qQbn

Greg Rosen, a former principal at BoxGroup, is joining venture firm Benchmark as a principal, effective in August.

Final Numbers
Expand chart
Data: CoinDesk; Chart: Axios Visuals
  • What happened? A South Korean crypto exchange called Coinrail was hacked over the weekend, with crooks stealing around $40 million of alt-coins. It's a small exchange and a (relatively) small theft, but further highlighted security problems that still plague the cryptocurrency markets.

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