Oct 17, 2017

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

Serial tech entrepreneur and investor Rick Marini has launched Protocol Ventures as the first-ever fund-of-funds for cryptocurrencies, Kia reports.

  • Why it matters: An increasing number of investors are interested in cryptocurrencies as values skyrocket, but they aren't yet comfortable parsing through white papers or picking from the dozens of nascent crypto hedge funds. This is where Marini says his fund-of-funds can help.
  • Who? Marini is best known as the founding CEO of BranchOut, an online recruiting startup that seemed to be everywhere on Facebook until the social network altered its policies. The team was later acqui-hired by Hearst, where Marini remained for two years. His angel deals have proven more successful, with a portfolio that includes Snap, Reddit, Poshmark and AngelList.
  • Marini on ICOs: "Probably 97% of them are garbage and that's a problem the industry needs to clean up."

• Seeing blue: It has been three months since Kevin SigRist stepped down as chief investment officer for the $94 billion North Carolina Retirement Systems, but the NC Treasurer's Office has yet to formally post a listing for his full-time successor (the role is currently being split on an interim basis by two portfolio managers).

In fact, the Treasurer only has a single investment job listed right now, even though a full quarter of the investment staff present for the March 2017 investment committee meeting are no longer with the NCRS. Maybe that's because NCRS hasn't actually made any new investment commitments since new Treasurer Dale Folwell came into office in January — as its only major transaction has been some public fund redemptions that were plugged directly into cash and bonds. No comment yet from a Treasury spox.

• Well, well... Saudi Aramco has asked FTI Consulting to halt all IPO investor relations work, according to Reuters, which adds that China has offered to directly buy up to 5% of Saudi Aramco. Doesn't exactly sound like the 2018 float remains entirely "on track," as the Saudis insisted yesterday.

  • Bigger picture, per Axios' Ben Geman: "The deal, if it came to pass, would deepen the energy ties between Saudi Arabia and China, the world's second-largest oil consuming nation after the U.S."

New firm alert: Anthem Venture Partners vets Jon Bauch and Brian Mesic have quietly formed Ankona Capital, a Los Angeles-based firm that will invest in "early growth capital" deals for software companies.

The BFD

Nordstrom (NYSE: JWN) said that it will halt its pursuit of a take-private transaction, until at least after the holiday shopping season. The luxury retailer's market cap climbed to nearly $7.8 billion last month on news that it was in talks with Leonard Green & Partners, but now has fallen back to $6.7 billion.

  • Why it's the BFD: Because it's a reminder that not all leveraged loans are originated equally. Bloomberg reports that lenders were tying a 13% interest rate to prospective Nordstrom notes, thus souring the deal. Not only were banks spooked by luxury retail, but also recent events like the Toys "R" Us bankruptcy and a drop in the price of PE-backed PetSmart bonds.
  • Go deeper: Dollar stores are thriving in rural America
  • Bottom line: "Nordstrom announced that the going-private transaction is on hold and that they'll revisit it after the holidays. I doubt it. When M&A transactions slow down, they tend not to get revived in such a short time. Part of that is financial and part of that is psychological." — Richard Kestenbaum, Triangle Capital
Venture Capital Deals

• Digital Asset Holdings, the Blythe Masters-led blockchain startup that built a distributed ledger settlement platform, has raised over $40 million in Series B funding led by Jefferson River Capital. http://axios.link/LSqQ

• Spotahome, a Madrid-based platform for booking mid-to-long-term accommodations, has raised €13.6 million in Series A funding from backers like Passion Capital, Seaya Ventures, Howzat Partners, Samaipata Ventures, Mexico Ventures and Samos Investments. http://axios.link/fsm8

• Chope, a Singapore-based dining discovery and reservations app, has raised $13 million in VC funding. Square Peg Capital led the round, and was joined by C31 Ventures, Moelis Australia and return backers NSI Ventures, Susquehanna International Group, DSG Consumer Partners, and SPH Ventures. www.chope.co

🚑 Mission Bio, a South San Francisco-based developer of single-cell DNA analysis, has raised $10 million in Series A funding led by Mayfield Fund. www.missionbio.com

• Blue Hexagon, an enterprise security startup led by former Qualcomm R&D chief Nayeem Islam, has raised $6 million in Series A funding led by Benchmark. www.bluehexagon.ai

• Snaps, a New York-based conversational marketing platform for brands, has raised $6 million in additional Series A funding from Signal Peak Ventures. www.makesnaps.com

• Pluto TV, a Los Angeles-based online television viewing service, has raised $5 million from Samsung Ventures. http://axios.link/ON9B

• BridgeU, a British provider of university prep and career guidance software, has raised £4 million in Series A funding. Octopus Ventures led the round, and was joined by Downing Ventures and return backer Fresco Capital. http://axios.link/FRk2

Private Equity Deals

🍔 Affinity Equity Partners has agreed to acquire franchise rights to Burger King in Japan for an undisclosed amount. http://axios.link/lyxp

• The Blackstone Group has completed its previously-announced purchase of Harvest Fund Advisors, an investment management firm focused on U.S. midstream energy assets. No financial terms were disclosed, except that Harvest has around $10 billion in assets under management. http://axios.link/ICCt

• Ferrara Candy, owned by L Catterton, and The Hershey Co. (NYSE: HSY) are among those expected to submit initial bids this week for Nestle's U.S. confectionary business, which includes such sweets as Butterfinger and Baby Ruth, according to CNBC. The deal could be worth upwards of $2.5 billion. http://axios.link/JcWC

⛽ Hull Street Energy has agreed to acquire nine hydroelectric power facilities in New Hampshire from Eversource (NYSE: ES) for $83 million, subject to regulatory approvals. Eversource also has agreed to sell its fossil fuel-based power plants in New Hampshire for $175 million to a partnership between Atlas Holdings and Castleton Commodities International. http://axios.link/prPG

• Littlejohn & Co. has agreed to acquire Strategic Materials, a Houston-based environmental services company and glass recycler, from Willis Stein & Partners and Vision Capital. No financial terms were disclosed. www.strategicmaterials.com

• Morgenthaler Private Equity has acquired Bettcher Industries, a Birmingham, Ala.-based maker of food processing, foodservice equipment and medical devices. No financial terms were disclosed, except that Bettcher's ESOP will retain a minority stake. www.bettcher.com

• SFW Capital Partners has acquired a stake in DZone (a.k.a. AnswerHub), a Cary, N.C.-based provider of technical content for software developers. No financial terms were disclosed. www.answerhub.com

• Summit Partners has acquired Harvey Performance Co., a Rowley, Mass.-based provider of cutting tools for precision machining applications. No financial terms were disclosed. www.harveyperformance.com

• Transom Capital Group has agreed to acquire the brands of Loud Technologies, including Mackie, Ampeg and Martin Audio. No financial terms were disclosed. www.loudtechinc.com

• Truck Hero, an Ann Arbor, Mich.-based provider of aftermarket accessories for pickup trucks and Jeeps, has agreed to acquire Omix-ADA, a Suwanee, Ga.-based provider of Jeep and off-road parts and accessories. No financial terms were disclosed. Truck Hero is majority-owned by CCMP Capital, while TA Associates holds a minority stake. http://axios.link/fEKP

• The Weinstein Company said today that it will receive a rescue investment from Colony Capital, which also has entered into exclusive negotiations to buy some or all of The Weinstein Company's assets. http://axios.link/ktKa

Public Offerings

• ForeScout, a Campbell, Calif.-based cybersecurity company, has set its IPO terms to 4.8 million shares being offered at between $20 and $22 per share. It would have a fully-diluted market cap of around $942 million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol FSCT, while Morgan Stanley is listed as left-lead underwriter. Forescout reports around a $47 million net loss on $91 million in revenue for the first half of 2017, and has raised over $150 million in VC funding (most recently at a $1 billion valuation).

• MongoDB, a New York-based open source database system, has increased its proposed IPO price range from $18-$20 per share to $20-$22 per share. It still plans to offer 8 million shares, and trade on the Nasdaq under ticker symbol MDB. Morgan Stanley is listed as left-lead underwriter. MongoDB has raised $300 million in VC funding, most recently at a post-money valuation of around $1.7 billion, from firms like Sequoia Capital (16.9% pre-IPO stake), Flybridge Capital (11.6%), Union Square Ventures (9.7%), NEA (7.2%), Future Fund (6.2%), Fidelity, Altimeter Capital Management and T. Rowe Price. www.mongodb.com

🚑 National Vision, a Duluth, Ga.-based discount optical retailer owned by KKR, has set its IPO terms to 15.8 million shares being offered at between $18 and $20 per share. It would have a fully-diluted market cap of around $1.5 billion, were it to price in the middle of its range. The company reports $1.3 billion in revenue for its most recent fiscal year, and plans to trade on the Nasdaq under ticker symbol EYE. http://axios.link/T5qd

• Toys "R" Us reportedly is considering an IPO for its Asia business, which operates as a joint venture with the Fung brothers. http://axios.link/8Q3V

Liquidity Events

🚑 Boston Scientific (NYSE: BSX) has completed its previously-announced purchase of Apama Medical, a Campbell, Calif.-based developer of atrial fibrillation technologies, for upwards of $300 million in cash (including $175m upfront). Apama had raised around $44 million in VC funding from firms like Ascension Ventures, Broadview Ventures, Grant Park Ventures, Medvance Incubator Partners and ONSET Ventures. http://axios.link/yadL

• Facebook (Nasdaq: FB) has acquired tbh, a seed-funded mobile app for making polls and sending compliments to other users, for an undisclosed amount. http://axios.link/x0uk

• Leonard Green & Partners is seeking a buyer for Hong Kong luxury fitness chain Pure Group, which could fetch up to $500 million, according to Bloomberg. http://axios.link/PNmx

• Riverside Partners has sold Pilgrim Quality Solutions, a Tampa, Fla.-based provider of quality and compliance management software for life sciences, to an undisclosed strategic acquirer for an undisclosed amount. www.pilgrimquality.com

• Splunk (Nasdaq: SPLK) has acquired selected assets of Rocana, a San Francisco-based provider of analytic solutions for the IT market. No financial terms were disclosed. Rocana raised around $19 million in VC funding from firms like GV, General Catalyst and Toba Capital. www.splunk.com

More M&A

• Bryan Cave, a St. Louis-based law firm, reportedly is in talks to merge with UK-based Berwin Leighton Paisner. http://axios.link/qhWj

• Fandango (LSE: FHP) has agreed to acquire online film ticketing rival MovieTickets.com for an undisclosed amount. http://axios.link/dVya

⛽ Frontera Energy (TSX: FEC), in which Catalyst Capital holds around a 30% stake, has agreed to acquire the 36.36% stake it didn't already own in Pacific Midstream, a Canadian owner and operator of oil pipeline and electrical power transmission lines, from International Finance Corp. for $225 million in cash.

⚽ Mike Ashley is seeking a buyer for Premier League club Newcastle United. http://axios.link/P1qx

Fundraising

🚑 Illumina Ventures has closed its debut fund with $230 million in capital commitments. The group had been launched in mid-2016 with a $100 million commitment from Illumina (Nasdaq: ILMN). http://axios.link/QO1u

• India's National Investment and Infrastructure Fund has secured a $1 billion commitment from Abu Dhabi Investment Authority. http://axios.link/cTsH

• Thomas H. Lee Partners is raising its eighth flagship buyout fund, per SEC filings. Dow Jones reports the target is $3 billion.

It's Personnel

• Jeff Gruccio has joined AlpInvest Partners as a principal focused on primary investments. He previously was with Prudential Financial. www.alpinvest.com

• Steve Schlafman has stepped down as a principal with RRE Ventures. No word yet on his future plans. Schlafman will not maintain any of his RRE board seats, which included TheSkimm.

Final Numbers

Dan Primack