Top of the Morning
Today's Washington, D.C. lesson is that $195,000 doesn't buy as much influence as it used to.
- That's the amount that T-Mobile executives spent at the Trump International Hotel after the company agreed to buy rival mobile carrier Sprint for $26 billion, as disclosed this past March.
- But the Department of Justice was unswayed by all of those suite stays, let alone the companies' PR strategy of talking up Trump-bait like job growth and 5G leadership.
- Expectations are that a deal with Dish Networks will be announced within the next 48 hours, whereby Dish would pay around $3.5 billion for wireless spectrum. It also would pay around $1.5 billion for a prepaid mobile business that the merging companies agreed to divest as part of an earlier FCC agreement, and pledge to hold all the acquired assets for at least three years.
- There had been talk that Amazon had interest in the prepaid business. In general, Amazon just seems to have a tire-kicking fetish.
- Elon Musk must be ready to take a flame-thrower to SEC social media regulators, given how John Legere appears to have skated for his misleading (and still available) tweet about DOJ objection to the original deal structure.
Why it matters, beyond America's mobile market no longer consolidating from four major national carriers to three:
- This could embolden top U.S. antitrust regulator Makan Delrahim, who looked to be on his heels after being handed his legal hat on the AT&T/Time Warner deal, just as the DOJ confirmed that it will launch an investigation into the power and behavior of online platforms.
WeWork is planning to launch its IPO in September, according to The Wall Street Journal. That's a bit earlier than anticipated, but still within the "second half of 2019" time-frame that the company had been signaling. An investor day remains scheduled for a week from today.
- Perhaps more notable is that the pre-IPO debt facility appears to have been upsized, with the paper reporting plans to secure between $5 billion and $6 billion.
- Axios reported last Friday that WeWork co-founder and CEO Adam Neumann does not plan to sell any shares into the IPO, even though he is said to be the company's largest single shareholder (yes, even larger than SoftBank).
- We also delved into an earlier WSJ report that Neumann already "cashed out" $700 million of WeWork shares, which was a bit overstated.
- Specifically, around $300 million was in the form of stock sales, most recently via an October 2017 tender offer from WeWork investor SoftBank. The remainder was loans, taken out against the value of his remaining WeWork shares.
- Go deeper here.
🕒 It's Day 11 of Leon Black, CEO of Apollo Global Management, refusing to confirm or deny that his family foundation was the source of a $10 million donation to Jeffrey Epstein's charity in 2015. Multiple reports now say that it was.
🎧 Pro Rata Podcast digs into the Puerto Rico protests, which reportedly will force the resignation of Gov. Rosselló. My guest is NY Times correspondent Frances Robles, who's been on the ground in San Juan. Listen here.
HipCamp, an online marketplace for public and privately-held campsites, raised $25 million in Series B funding. Andreessen Horowitz led, and was joined by return backers Benchmark, August Capital and OATV.
- Why it's the BFD: Because camping has never been more popular in the U.S., even if some of that is driven by folks whose primary motivation is getting the perfect Instagram of a campfire-seared avocado toast against the setting sun.
- Bottom line: The company launched to focus on privately-held campsites, basically as an Airbnb for the tent and RV crowd, but a recent change to the federal bureaucracy has since allowed it to also provide real-time information on around 100,000 federal sites.
Venture Capital Deals
• Gusto, a Denver-based provider of payroll and HR benefits software for SMBs, raised $200 million in new funding co-led by Fidelity and Generation Investment Management. http://axios.link/XhyW
🚑 Freenome, a South San Francisco-based developer of early colorectal cancer testing via blood draw, raised $160 million in Series B funding. RA Capital Management and Polaris Partners co-led, and were joined by Perceptive Advisors, T. Rowe Price, Roche Venture Fund, Kaiser Permanente Ventures, the American Cancer Society and return backers Andreessen Horowitz, GV, DCVC, Section 32 and Verily Life Sciences. http://axios.link/jIzE
🚑 Frequency Therapeutics, a Woburn, Mass.-based drug-maker focused on hearing loss, raised $62 million in Series C funding. Perceptive Advisors led, and was joined by Deerfield Management, RTW Investments, Mizuho Securities Principal Investment and return backers Polaris Founders Capital, Taiwania Capital Management, Axil Capital and CoBro Ventures. http://axios.link/UoyY
🚑 X-Vax Technology, a Jupiter, Fla.-based vaccine developer, raised $56 million in Series A funding from Johnson & Johnson, Adjuvant Capital, Serum Institute, Alexandria Venture Investments and a Founders Fund affiliate. http://axios.link/T6ve
🚑 Benchling, a life sciences R&D cloud platform, raised $34.5 million in Series C funding. Menlo Ventures led, and was joined by Lead Edge Capital, YC Continuity and return backers Benchmark and Thrive Capital. www.benchling.com
• vCita, an Israeli provider of small business management software, raised $15 million led by Forestay Capital. http://axios.link/uchY
• Cambridge Touch Technologies, a UK-based provider of multi-force and touch technologies, raised $10 million in Series B funding. by Kureha Corp. led, and was joined by Puhua Capital, Futaba Corp. and return backers Parkwalk, Downing Ventures, CM Ventures and Amadeus Capital Partners. http://axios.link/G3dt
🚑 Tivic Health Systems, a San Francisco-based bioelectronic medical device startup, raised $8 million in seed funding from Sand Hill Angels, Astia Angels, Golden Seeds, HBS Angels, Sierra Angels, Lateral Capital and Skylight Investments. http://axios.link/rnZD
• Freedom Robotics, a San Francisco-based provider of robotic fleet control and monitoring software, raised $6.6 million in seed funding. Initialized Capital led, and was joined by Toyota AI Ventures, Liquid 2 Ventures and individuals. http://axios.link/6Dez
• EasyMovie, a Paris-based video content creation platform for internal campaigns, raised €5 million from Ring Capital. http://axios.link/zJTu
• FlipGive, a Toronto-based fundraising platform for youth sports teams, raised $5 million in Series A funding from Framework Venture Partners, iGan Partners and FJ Labs. http://axios.link/Osj0
• Pomona, an Indonesian provider of omnichannel marketing and sales software for consumer brands, raised $3 million in Series A2 funding led by Vynn Capital. http://axios.link/CvXp
Private Equity Deals
• Aurora Capital Partners acquired Cold Chain Technologies, a Franklin, Mass.-based provider of single-use and reusable passive thermal packaging solutions.
• AVI-SPL, a Tampa, Fla.-based portfolio company of H.I.G. Capital, acquired Digital Video Networks, a Phoenix-based provider of digital workplace collaboration solutions. www.avispl.com
• Apollo Global Management and Starwood Capital Group each submitted offers to buy General Electric’s (GE) aircraft financing unit, which could fetch over $4 billion, per Bloomberg. http://axios.link/jkPN
• Compass Datacenters, a Dallas-based wholesale data-center developer backed by RedBird Capital Partners and Ontario Teachers' Pension Plan, acquired ROOT Data Center, a Montreal-based wholesale data-center provider. www.compassdatacenters.com
• Cooper’s Hawk Winery & Restaurants, an Orland Park, Ill.-based winery and restaurant operator, raised an undisclosed amount of private equity funding from Ares Management. www.chwinery.com
• Equistone agreed to buy Heras, a Dutch provider of perimeter parking solutions, from CRH (Ireland: CRG).
• KKR agreed to buy Arnott’s, an Australian biscuit and snack-maker, from Campbell Soup Co. (NYSE: CPB) for US$2.2 billion. http://axios.link/vuqp
• WestJet Airlines (TSX: WJA) shareholders approved a C$3.5 billion takeover by Onex Partners. http://axios.link/WmfT
• Apollo Global Management has halted talks to sell French glass bottle maker Verallia, and instead will move forward with an IPO that could value the company at around €4.5 billion, per Reuters. Apollo had been pursuing a dual-track process. http://axios.link/51rf
• L Catterton sold its non-control stake in restaurant chain Punch Bowl Social to Cracker Barrel Old Country Store (Nasdaq: CBRL), with Cracker Barrel saying that it would invest up to $140 million. http://axios.link/h7Ee
☕ Jollibee Foods, a Philippines-listed fast food company, agreed to buy California-based coffee shop chain The Coffee Bean & Tea Leaf for $350 million. http://axios.link/56Mw
• Quad/Graphics (NYSE: QUAD) canceled its $1.4 billion agreement to buy Wisconsin-based printing rival LSC Communications (NYSE: LKSD), following antitrust objections by the U.S. Department of Justice.
• Adam Nelson, a former partner with Social Capital, joined venture firm FirstMark Capital as a partner. http://axios.link/jIox
• Derek Rapp joined RiverVest Venture Partners as a managing director. He previously was president and CEO of JDRF, an organization funding Type 1 diabetes research. www.rivervest.com
- Go deeper: Extreme volatility in the Fed funds market