Jul 3, 2018

Axios Pro Rata

A quick programming note, as you prepare for BBQ and fireworks: Pro Rata will be off for the rest of the week, returning Monday. But I'll still be (sorta) working, so be sure to send me news and scoop (dan@axios.com or http://axios.com/tips).

Top of the Morning

Photo by Damien Meyer/AFP/Getty Images

Last fall we discussed how tech entrepreneur Zain Jaffer was arrested on a variety of awful charges, including sexual assault of a child. He was immediately canned as CEO of mobile video ad company Vungle and the legal process began its slow roll toward justice.

But, in this case, justice is total exoneration.

A judge yesterday dismissed all charges at the request of San Mateo D.A. Steve Wagstaffe, who tells Axios' Kia Kokalitcheva:

  • Jaffer was taking two prescription medications, prescribed by different doctors, and didn't know that they could cause an adverse psychological reaction if taken at the same time.
  • Suddenly it's the middle of the night and he's acting erratically, including punching his son and father, the latter of whom called the cops.
  • Zaffer also is an avid martial artist, and the "sexual assault" actually appears to have been a martial arts hold he was performing.

Zaffer's statement after the dismissal was extremely diplomatic, and there is no indication he plans to sue either the San Mateo DA's office or the local police department. He may, however, try to regain a management role at Vungle, where he remains the largest shareholder (after Jaffer's arrest, the company promoted CFO/COO Rick Tallman to the top role). Per Jaffer:

“I was incredibly fortunate that I was able to defend myself through the legal system, but I am aware that many others are not. Moving forward, I plan on examining ways that I can help others who are innocent and are seeking to obtain justice.”  

• Juul's giant fundraise — which we discussed yesterday — is being led by existing investor Tiger Global, according to The Information. A source also let us know that TPG (former employer of Juul CEO Kevin Burns) has looked at Juul in the past, but isn't participating.

  • Juul also filed Delaware docs for at least the first tranche of the round, provided to Axios by Lagniappe Labs, which shows the Series E preferred shares are priced at $179.25 each. Pretty big bump from the $3.10 per share price of Series D preferred.

Amazon's $1 billion deal for PillPack roiled pharmacy stocks last week, but Axios' Bob Herman writes that the tech giant still has a long way to go if it really wants to disrupt the drug supply chain:

"Amazon is buying a small player in a highly regulated industry dominated by powerful incumbent companies that aren't willing to give up their turf. It will have to build or acquire more parts to make a big difference.
The big unresolved issue is payment. Uninsured people or patients willing to pay cash for their prescriptions can easily switch to PillPack, but that is a tiny part of the market."
Go deeper here

• The latest Social Capital departure is Jonathan Hsu, a partner and head of data science. A firm spokeswoman confirmed the exit. He is expected to take on an investing role with a new venture fund being formed by ex-SC partner Arjun Sethi (and maybe at least one more SC vet).


Source: Giphy

Automation Anywhere, a 15 year-old robotic process automation company, raised $250 million in Series A funding at a $1.8 billion post-money valuation. NEA and Goldman Sachs co-led, and were joined by General Atlantic and World Innovation Lab.

  • Why it's the BFD: Because the San Jose, Calif.-based company is a test case for the labor force replacement debate, with an outsourced, cognitive bot army that helps global enterprises automate rote tasks like processing insurance claims and mortgage applications.
  • Bottom line: "Part of Automation Anywhere’s mission, CEO Mihir Shukla says, is also to use the power of automation to 'remove the mundane from everybody’s life,' allowing human workers to focus on higher-order tasks. From his own observations, he says, the transformation doesn’t shrink the human workforce at client companies. Such companies attract more applicants, Shukla says, because they move fast and create more jobs." —Bernadette Tansey, Xconomy
Venture Capital Deals

🚀 iSpace, a Chinese rocket startup, raised around $91 million in funding led by Matrix Partners China. http://axios.link/bVkp

Airwallex, an Australian provider of international business payment solutions, raised US$80 million in Series B funding co-led by return backers Tencent and Sequoia Capital China. http://axios.link/eflW

Harper Wilde, a Los Angeles-based bra startup, raised $2 million in seed funding led by CRV. http://axios.link/r7WQ

Private Equity Deals

Ardian acquired a minority stake in MKD, a Spanish online platform for outsourced fleet maintenance and repair services. http://axios.link/cQ4T

Consolo Services Group, a Lexington, Ky.-based portfolio company of Bluff Point Associates, has acquired ADS Data Systems, a Stevenson, Md.-based provider of adult day care SaaS. www.consoloservices.com

Golden Gate Capital acquired The Learning Experience, a Deerfield, Fla.-based childcare center operator. No financial terms were disclosed, but we hear the senior secured credit facility (administered by Varagon) was $155 million. www.thelearningexperience.com

🚑 Humana (NYSE: HUM), TPG and Welsh Carson Anderson & Stowe completed their previously-announced take-private acquisition of Louisville-based acute care provider Kindred for around $4.1 billion (including assumed debt). http://axios.link/JHN4

Intergulf, a LaPorte, Texas-based portfolio company of Kinderhook Industries, has acquired Lonestar Ecology, a Pasadena, Calif.-based wastewater treatment company. www.intergulfcorp.com

KKR completed its previously-announced purchase of Hyperion, a manufacturer of industrial tool components, from Sanvik (Oslo: SAND). http://axios.link/ekxG

Macquarie Group is in advanced talks to buy a majority stake in T5 Data Centers, an Atlanta-based data center operator, from Iron Point Partners at an enterprise value of around $800 million, per Bloomberg. http://axios.link/f4KS

Platinum Equity has acquired PLI Card Marketing Solutions, a Las Vegas-based provider of gift and loyalty card marketing solutions, plus hotel keycards. www.plicards.com

Platinum Equity completed its purchase of the the global production mail business of Pitney Bowes (NYSE: PBI) for $361 million. www.pitneybowes.com

Pronovias Group, a portfolio company of BC Partners, has agreed to acquire European bridalwear brand Nicole.

🍜 Wagamama, a British noodle restaurant chain backed by Duke Street and Hutton Collins, is receiving private equity interest from such firms as Bridgepoint, CVC, KKR and L Catterton, per the FT. Goldman Sachs is managing the process. http://axios.link/PjXo

Liquidity Events

Facebook (Nasdaq: FB) is paying upwards of $30 million to acquire Bloomsbury AI, a London-based provider of natural language processing technology, per TechCrunch. Bloomsbury was seeded by firms like Fly Venture, IQ Capital Partners, London Co-Investment Fund and Seedcamp. http://axios.link/8fLa

🐶 Nestlé is in talks to buy Canadian pet food maker Champion Petfoods for more than $2 billion from Bedford Capital, per the WSJ. http://axios.link/DuZs

Power Products, a portfolio company of Genstar Capital, agreed to sell its marine and mobile business to Brunswick Corp. (NYSE: BC) for $910 million in cash. http://axios.link/iOq2

More M&A

🍺 Anheuser Busch InBev has restarted talks to sell German beer brands Hasseroeder and Diebels, after talks stalled with CK Corporate Finance. http://axios.link/Sgx1

🚑 Athenex (Nasdaq: ATNX) has secured a $100 million equity and debt investment from Perceptive Advisors and is forming a Chinese joint venture with Xiangxue Pharma that will focus on T-cell receptor technology. http://axios.link/ei7G

🚑 Catalent (NYSE: CTLT) has agreed to buy Boston-based women’s health company Juniper Pharmaceuticals (Nasdaq: JNP) for around $128 million, or $8.70 per share (32% premium to yesterday’s closing price). http://axios.link/PogB

CMC, a Chinese state-backed media and entertainment company, has raised $1.49 billion in funding from firms like Alibaba, Tencent and China Vanke Co. http://axios.link/a0oq

Commerzbank (DE: CBKG) will sell its equity markets and commodities unit to Societe Generale (Paris: SOGN). http://axios.link/5Amn

Lyft is acquiring bike-sharing company Motivate, which operates urban services like Ford GoBike in San Francisco and Citibike in New York City. Sources tell Axios the deal was for $250 million, though Lyft declined to confirm.


Riverside Partners of Boston is raising up to $600 million for its sixth private equity fund, per SEC filings. www.riversidepartners.com

⛽ Waterous Energy Fund, a Calgary-based energy investment firm, raised C$1.4 billion for its debut fund. www.waterous.com

It's Personnel

Eric Leathers, the former head of financial services investing for TPG, is joining Further Global Capital Management, a firm founded by Olivier Sarkozy, the former head of fin services investing for The Carlyle Group, per Bloomberg. http://axios.link/JWmH

• Alexandre Lazarow has joined Cathay Innovation as a San Francisco-based director. He previously was a principal with Omidyar Network. www.cathayinnovation.com

• Trive Capital, a Dallas-based private equity firm, promoted Shavran Thadani to managing director. www.trivecapital.com

• Julie Underwood has joined CalSTRS as CFO. She spent the past eight years as CFO of the San Bernardino County Employees’ Retirement Association. www.calstrs.com

Final Numbers
Expand chart
Reproduced from Pew Research Center; Note: "Summer" is an average of June, July, and August; Chart: Axios Visuals

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