Aug 9, 2018

Axios Pro Rata

Top of the Morning

Source: Giphy

A very merry un-merger Thursday to you:

Tribune Media terminated its $3.9 billion takeover by Sinclair Broadcasting, and also filed a lawsuit for breach of contract.

  • The merger would have created America's largest local broadcaster, and both sides are likely to pursue other M&A avenues.
  • But FCC chair Ajit Pai suggested that Sinclair hadn't been truthful about all of the transaction terms, which drew the Twitter wrath of President Trump.
  • The irony, per Axios' Sara Fischer, is that "it was the FCC's decision to roll back decades-old broadcast ownership rules last year that empowered Sinclair to pursue the deal in the first place."

Albertsons and Rite Aid mutually terminated an agreement whereby the Cerberus-owned grocer would have acquired the more than 2,500 Rite Aid stores that weren't sold earlier this year to Walgreens.

  • The move came less than 24 hours before Rite Aid shareholders were scheduled to vote, and amid vocal opposition from some of them (including Highfields Capital Management, which has a 4.46% stake).
  • Investor advisories ISS and Glass Lewis also opposed the tie-up, basically arguing the price was too low. Albertsons, which would have become publicly-traded via the deal, refused to increase its offer.
  • The bottom line, per Axios' Bob Herman, is that both companies now must worry that Amazon will eat their lunch on pharmacy and consumer staples.

CVS could have new troubles with its proposed $69 billion takeover of health insurer Aetna, as the American Medical Association yesterday asked the Department of Justice to intervene.

  • AMA argued the deal could raise prescription drug prices.
  • CVS, meanwhile, chimed in on the drug price debate during its Q2 earnings. Specifically, it tried rebutting claims that rebates (which are only vaguely defined) are correlated to higher drug prices, and broke out rebate-related earnings that were much lower than what some analysts had believed.

Recommended reading: Forbes' Dan Alexander scoops a private settlement between Commerce Secretary Wilbur Ross and one of his former private equity partners, who who alleged that Ross stole his money and then tried to cover it up:

Over several months, in speaking with 21 people who know Ross, Forbes uncovered a pattern: Many of those who worked directly with him claim that Ross wrongly siphoned or outright stole a few million here and a few million there, huge amounts for most but not necessarily for the commerce secretary. At least if you consider them individually. But all told, these allegations—which sparked lawsuits, reimbursements and an SEC fine—come to more than $120 million.
If even half of the accusations are legitimate, the current United States secretary of commerce could rank among the biggest grifters in American history.

LB-Uh-Oh: The SEC has asked Tesla for information related to CEO Elon Musk's tweets about taking the company private, per the WSJ.


Source: Giphy

Ambys, a Redwood City, Calif.-based developer of therapies for serious liver diseases, raised $60 million in Series A funding from Third Rock Ventures and Japan's Takeda Pharmaceutical. It also secured another $80 million from Takeda via a strategic partnership, which includes options that allow Takeda to buy partial rights to Ambys' first four drug candidates.

  • Why it's the BFD: Because it's become increasingly common for biotech startups to partner with big pharma, but most of those deals usually include the potential for control — either in terms of developed products or an option to buy the entire company. Ambys' deal with Takeda provides neither.
  • Bottom line: "The company is tackling three different avenues in liver disease: a cell therapy platform, a gene therapy, and gain-of-function small molecules. [Third Rock's Jeff] Tong said it was imperative that Ambys pursue all three areas at once... [because] many young biotechs make the fatal mistake of funneling all their cash into the first program that shows big promise." — Brittany Meiling, Endpoints
Venture Capital Deals

• Manbang Group, a Chinese truck-hail company that recently raised $1.9 billion from firms like SoftBank and Sequoia Capital China, is seeking $1 billion in new funding at around a $10 billion valuation, per the WSJ.

• LetGo, a New York-based used goods marketplace, raised $500 million in new funding commitments from Naspers ($150m called so far). The company previously raised over $400 million from firms like Accel, Insight Venture Partners and NEA.

TaskUs, a Santa Monica, Calif.-based provider of business process outsourcing solutions for tech companies, raised $250 million from Blackstone.

🚑 SQZ Biotech, a Watertown, Mass.-based cell therapy company, raised $72 million in Series C funding. Everblue, Illumina Ventures, Invus, Orient Life and Viva Ventures were joined by return backers Bridger Healthcare Partners, Global Health Science Fund, GV, JDRF T1D Fund, NanoDimension and Polaris.

🚑 Therachon, a Swiss biotech focused on rare diseases like achondroplasia, raised $60 million. Novo Holdings led, and was joined by Cowen Healthcare Investments, Pfizer Ventures, Tekla Capital Management and return backers Versant Ventures, OrbiMed, Bpifrance and Inserm Transfert Initiative.

🚑 Apexigen, a San Carlos, Calif.-based immune-oncology company, raised $58 million in Series C funding from firms like 3E Bioventures Capital, Virtus Inspire Ventures and SV Tech Ventures. It also disclosed a $15 million Series B round led by Decheng Capital.

Domino Data Lab, a San Francisco-based provider of test beds for predictive model development, raised $40 million in Series D funding co-led by Sequoia Capital and Coatue Management.

Professional Fighters League, a mixed martial arts league, raised $28 million in Series B funding. Backers include Elysian Park Ventures, SWaN Ventures, Ted Leonsis, Tony Robbins, Mark Burnett and Kevin Hart.

iS5Com, a Canadian provider of industrial connectivity systems, raised C$22 million led by Phoenix Contact Innovation Ventures.

Yesware, a Boston-based maker of email software for salespeople, raised $15 million in new funding and said its founding CEO is stepping down. Foundry Group led, and was joined by fellow return backers Battery Ventures, GV, IDG and Shea Ventures.

Taxfix, a Berlin-based maker of a mobile assistant for tax filing, raised $13 million in Series A funding. Valar Ventures led, and was joined by return backers Creandum and Redalpine.

Metro Bikes, an Indian motorbike on-demand service, raised $12.2 million co-led by Accel and Sequoia India.

🚑 Modulus Discovery, a Tokyo-based drug discovery startup, raised around $7.2 million in Series A funding. Fast Track Initiative led, and was joined by PeptiDream and DBJ Capital.

Private Equity Deals

Blackstone completed its previously-announced acquisition of PSAV, a Schiller Park, Ill.-based event experiences company, from Goldman Sachs and Olympus Partners. In related news, PSAV pulled its IPO registration.

Dun & Bradstreet (NYSE:DNB) agreed to be taken private for $6.9 billion (including $1.5b of debt), or $145 per share (18% premium), by an investor group that includes CC Capital, Cannae Holdings and Thomas H. Lee Partners.

⛽ Junction Energy Capital and Ara Partners have acquired Puralube, a Wayne, Penn.-based provider of re-refining technology for used lubricants and oil.

Providence Equity Partners acquired a majority stake in KPA, a Lafayette, Colo.-based EHS risk management company, from CIVC Partners.

🚑 Sotera Health, a Broadview Heights, Ohio -based portfolio company of Warburg Pincus, acquired Gibraltar Labs, a Fairfield, N.J.-based provider of outsourced microbiology and analytical chemistry testing for pharma and medical device companies.

Liquidity Events

🚑 Emergent BioSolutions (NYSE: EBS) agreed to buy PaxVax, a Redwood City, Calif.-based maker of vaccines to protect against infectious diseases, from Cerberus Capital Management and Ignition Growth Capital for $270 million in cash.

⛽ Orsted, a Danish energy company, agreed to buy Chicago-based onshore wind farm developer Lincoln Clean Energy for $580 million from I Squared Capital.

More M&A

Dada-JD Daojia, a Chinese online grocer, raised $500 million from Walmart and, per CNBC.

Dai-ichi Life Holdings (Tokyo: 8750) agreed to buy the life insurance unit of Australia’s Suncorp Group (ASX: SUN) for A$725 million.

🚑 Mylan (Nasdaq: MYL), a generic drugmaker with a market cap of over $20 billion, said it would form a strategic review committee to explore its options, amid falling prices for U.S. products.

🚑 Perrigo (NYSE: PRGO) said it will explore all separation options for its prescription pharma business, including a sale, merger or tax-free spinoff.

Walmart (NYSE: WMT) received Indian regulatory approval for its $16 billion purchase of online marketplace Flipkart.

It's Personnel

Adam Nash, the former Wealthfront CEO who has been serving as an entrepreneur-in-residence at Greylock, has joined Dropbox (Nasdaq: DBX) as VP of product.

🚑 Heather Preston joined Pivotal bioVenture Partners as a managing partner. She previously was a managing director with TPG Biotech.

Final Numbers
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Adapted from an Economic Policy Institute analysis of data from the Bureau of Labor Statistics and the Bureau of Economic Analysis. Note: Hourly pay refers to wages and benefits of nonsupervisory, private sector workers. Productivity refers to the output of goods and services, accounting for depreciation per hour worked. Chart: Harry Stevens/Axios

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