Jun 20, 2018

Axios Pro Rata

By Dan Primack
Dan Primack

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Top of the Morning
Source: Giphy

The private equity industry now has 359 limited partners with at least $1 billion allocated to the asset class, up 14% from last year, according to new research from Preqin.

  • The majority are based in North America, and 46% are pensions.
  • The largest is Canada Pension Plan Investment Board with $54.8 billion in current PE allocation, while the top U.S. group is the California Public Employees' Retirement System (#7 with $26.9 billion).
  • 48% utilize specialized structures like custom accounts, while 63% seek to co-invest.

Why it matters, per Preqin:

"As more investors work towards their target allocations, we will likely see the $1 billion Club continue to grow; and, with capital concentration becoming more pronounced in private equity fundraising, so too will the influence exerted by these influential institutions in the industry."

Over the top: Disney this morning raised its bid for the entertainment assets of 21st Century Fox to $38 per share in cash or stock, valuing the deal at $71.3 billion. This is 36% higher than both Disney's original $28 per share bid, and also above Comcast's rival $35 per share, all-cash offer.

  • Bottom line: Don't be surprised to see Comcast go even higher. Both companies believe they need these assets but, as Axios' Sara Fischer wrote yesterday, Comcast has fewer alternatives.
  • The AT&T-Time Warner ruling alleviates a lot of antitrust risk related to Comcast's bid, but obviously it's ramping up a defense strategy anyway. One source familiar with the company's strategy says that it would present itself as a "regional player," using AT&T as a comp. Yeah, I'm also laughing while I write it.

• Breaking: Dr. Atul Gawande has been named CEO of the healthcare joint venture between Amazon, Berkshire Hathaway and J.P. Morgan. It's a pretty unexpected choice given that Gawande — a high-profile physician and writer — doesn't appear to have business experience.

Capitol Hill: In January we discussed how an immigration bill proposed by conservative House Republicans would criminalize non-student DACA recipients if their annual income falls below 125% of the federal poverty rate. The result was that a covered individual making the federal minimum wage would be unable to miss a single hour of work in an entire year, let alone take a sick day or vacation day.

  • Not only is that absurd provision still in the bill, which will be debated this week, but it also made its way into the "compromise" bill being pushed by House GOP leadership. Speaker Ryan's spox didn't return a request for comment.
Source: Giphy

Emulate, a Boston-based developer of "organs-on-chips," raised $36 million in Series C funding. Founders Fund led, and was joined by ALS Investment Fund, SciFi VC and Glass Wall Syndicate.

  • Why it's the BFD: Because this technology could reduce the large number of animals used each year in pharmaceutical lab testing, without sacrificing efficacy. So far Emulate has partnerships with such drug-makers as AstraZeneca, Merck, Roche, Takeda and Johnson & Johnson.
  • Bottom line: "The translucent Emulate chips, roughly the size of a AA battery, have tiny channels lined with human cells and tissue. These chips are engineered to recreate the physiology and mechanical forces encountered by the cells of an organ, such as the flow of blood or air. Emulate has developed organ chips for the liver, intestine, lung, and the brain. Those chips are part of a broader system that includes instruments for conducting experiments and software to analyze data and model different diseases." — Frank Vinluan, Xconomy
Venture Capital Deals

Crowdstrike, a Sunnyvale, Calif.-based endpoint protection and response platform, raised $200 million in Series E funding at a valuation north of $3 billion. General Atlantic, Accel and IVP co-led, and were joined by CapitalG and March Capital. http://axios.link/8Cba

Cylance, an Irvine, Calif.-based cyberthreat prevention company, raised $120 million in new funding led by Blackstone Tactical Opportunities. It had previously raised over $170 million. http://axios.link/7JQc

🚑 Freeline Therapeutics, a London-based gene therapy startup focused on liver expression, raised £88.4 million in Series B funding led by Syncona (LSE: SYNC). http://axios.link/Cbkf

SigFig, a San Francisco-based automated wealth management platform, raised $50 million in new funding. General Atlantic led, and was joined by return backers Bain Capital Ventures, DCM, Eaton Vance, New York Live, Nyca Partners, UBS and Union Square Ventures. http://axios.link/Tjv4

SmartAsset, a San Francisco-based financial modeling and decision-making tool, raised $28 million in Series C funding from Focus Financial Partners, Javelin Venture Partners, TTV Capital, IA Capital, Contour Venture Partners and Citi Ventures. http://axios.link/dsry

🚑 Aaptiv, a New York-based digital health and wellness content company, raised $22 million in Series C funding. Millennium Technology Value Partners led, and was joined by return backer Insight Venture Partners. www.aaptiv.com

Feed, a French developer of Soylent-like meal replacement products, raised €15 million from Alven and Otium Brands. http://axios.link/tAIF

Supermercato24, an Italian grocery delivery startup, raised €13 million in Series B funding. FII Tech Growth led, and was joined by Endeavor Catalyst and return backers 360 Capital Partners and Innogest. http://axios.link/Lziu

Scratchpay, a Los Angeles-based provider of payment plans for veterinary services, raised $6.4 million in Series A funding from Companion Fund, Struck Capital, TTV Capital and SWS Venture Capital. http://axios.link/y0dI

Prifender, a Bellevue, Wash.-based data privacy compliance startup, raised $5 million in seed funding led by Firstime VC. http://axios.link/fIIi

TinyTap, an Israeli educational game creation platform, raised $5 million led by Aleph VC. http://axios.link/fX53

Falkonry, a Sunnyvale, Calif.-based provider of operational machine learning solutions for large industrial companies, raised $4.6 million in Series A funding. Presidio Ventures led, and was joined by Fortive Corp., Basis Set Ventures, Polaris Partners, Start Smart Labs and Zetta Venture Partners. www.falkonry.com

🚑 Micrima, a UK-based breast cancer screening startup, raised £4.4 million in new funding from Technology Venture Partners, The Angel CoFund and Venture Founders. http://axios.link/Hwgh

Pulse Q&A, a San Francisco-based decision-making platform for C-suite execs, raised $4 million in seed funding from backers like True Ventures and YC. http://axios.link/mAF6

Jjumpp, a Lehi, Utah-based digital marketing SaaS platform for small businesses, raised $3 million from Arthur Ventures. www.jjumpp.com

Private Equity Deals

Blackstone has agreed to acquire PSAV, a Schiller Park, Ill.-based event experiences company, from Goldman Sachs and Olympus Partners. www.psav.com

Capital Dynamics completed its $977 million take-private acquisition of 8point3 Energy Partners, a San Jose, Calif.-based solar power joint venture between First Solar and Sun Power. www.8point3energypartners.com

The Carlyle Group and Taiyo Nippon Sanso (Tokyo: 4091) are front-runners for around $8 billion in assets being divested by gasses companies Linde (DE: LIN1) and Praxair (NYSE: PX), related to their planned $79 billion merger, per Reuters. http://axios.link/rhek

🚑 CVC Capital Partners is in advanced talks to buy a control stake in Italian drugmaker Recordati (Milan: RECI) for more than €3 billion, per the FT. http://axios.link/s9nt

Drake Automotive Group, an aftermarket car accessories and restoration parts company owned by Huron Capital, has acquired DV8, a Riverside, Calif.-based maker of off-road accessories and wheels. www.dv8offroad.com

EMR Capital has agreed to buy the Cerro Colorado copper mine in Chile from BHP Billiton (LSE: BLT) for upwards of $320 million. http://axios.link/DoiZ

Grain Management has agreed to acquire Great Plains Communications, a telecom provider in Nebraska. http://axios.link/opRE

Linet Group, a Dutch maker of hospital and nursing beds, is talking to private equity firms like Advent International and CVC Capital Partners about selling a stake in the company, per Reuters. http://axios.link/fg1o

Morgan Stanley Capital Partners has acquired Comar, a Voorhees, N.J.-based rigid plastics packaging manufacturer. www.comar.com

Novacap acquired Horizon Telecom, a Chillicothe, Ohio-based provider of fiber-optic bandwidth infrastructure services, for $220 million. Co-investors included Hamilton Lane, HarbourVest Partners and RCP Advisors. www.horizontel.com

Public Offerings

⛽ Vitol has launched an A$5 billion float for its Australian refinery and fuel supply network (Vitol Energy). It would be Australia’s largest IPO in four years and is expected to list on July 13. http://axios.link/06ED

Liquidity Events

AT&T (NYSE: T) is in talks to buy AppNexus, a New York-based provider of ad management software, per the WSJ. AppNexus has raised over $340 million in VC funding, most recently at a $1.6 billion valuation, by firms like TCV, Venrock and First Round Capital. http://axios.link/pqTO

KKR is seeking a buyer for Dutch telecom operator United Group, which could fetch upwards of €3 billion, per WSJ. http://axios.link/qL72

More M&A

⛽ PTT, a listed Thai energy company, has agreed to acquire domestic power company Glow Energy from France’s Engie for more than $4 billion. http://axios.link/VFCr

Porsche has agreed to acquire a 10% stake in Croatian electric car parts company Rimac Automobili. http://axios.link/6qLo

Synnex (NYSE: SNX) is in talks to buy Convergys (NYSE: CVG), a Cincinnati-based call center operator with a market cap of around $2.3 billion, per Reuters. http://axios.link/8Dea


⛽ Grey Rock, an energy-focused private equity firm based in Dallas, closed its third fund with $233 million. www.greyrockep.com

Goldman Sachs is launching a fund-of-funds focused on female-led private equity funds, as part of a $500 million investment strategy focused on businesses and financial services led by women. http://axios.link/YFhC

Redpoint Ventures has closed its seventh fund with $400 million. http://axios.link/PRZi

It's Personnel

Wei Cai is stepping down as a managing director with FountainVest Partners in order to join Goldman Sachs as co-head of China investment banking. http://axios.link/TBJg

Salem Shuchman (managing partner of Entrepreneur Partners, ex-Apax) has joined Star Mountain Capital as an operating partner. www.starmountaincapital.com

Final Numbers
Dan Primack