Axios Pro Rata
April 21, 2017
Bleary-eyed greetings from the home office, after a series of canceled and delayed flights out of D.C. Some notes before naptime...
Top of the Morning
• Blackstone Ventures? The Blackstone Group is working to launch both infrastructure and venture capital programs, according to comments made during yesterday's Q1 earnings call.
The former is a fairly obvious move, particularly given Trump's ask for the private sector to match a $200 billion federal outlay on infrastructure by a 5:1 ratio over 10 years. The latter is a bit more surprising, even though Blackstone has been doing some growth deals out of its Tactical Opportunities unit. No specifics yet, outside of CFO Michael Chae noting that Blackstone recently added veteran VC Jim Breyer to its board of directors, and that the firm has "what I think is an extremely exciting concept."
Two quotables from the Blackstone earnings call:
- President Tony James: "I would say, in general, there's no pressure on fee structures."
- CEO Steve Schwarzman: "I've been racking my brain to make sense of this disconnect. If our shares were valued the same as the average S&P company based on dividend yield, the share price would be over $100 a share instead of the $30, where it now is. If we were valued using the average P multiple, the price would be over $50. That's just math. In any case, this disconnect remains a mystery to me. I leave it to you to figure it out."
• Never mind: Earlier this month, Uber chief product officer Jeff Holden told the following to a conference audience (video at 13:00):
"We found a startup at Carnegie Melon with some ex-CMU professors called Carnegie Robotics that had this great concentration of people who were just perfect for this and we bought the company."
Only trouble, as Kia reports, is that Uber never actually bought Carnegie Robotics (which remains an independent company, although its CTO did leave for Uber before returning to CR earlier this year). An Uber spokesman says that Holden "misspoke."
• Speaking of Uber: The ride-hail company is extending its internal investigation into claims of sexual harassment and discrimination, which originally had been slated to end by the end of April. To be sure, getting this right is paramount. But it's bordering on bizarre that the delay is partially due, per Recode, to hired-gun investigator Eric Holder having "not gotten interviews with several key figures in the investigation, including top HR execs." Moreover, this means any culpable individual(s) ― particularly in the specific situations detailed by Susan Fowler, were Holder to validate her allegations ― get an extra month of salary, vesting and opportunity to make life miserable for female Uber employees.
• Coming attractions: Expect a big pickup in U.S. IPOs next week, with eight offerings expected. Highlights include Cloudera and Carvana.
• Coming concerns: It's not too early for the biz world to begin thinking about a Frexit.
• Bag of chips: All indications on Toshiba's giant semiconductor unit sale are that Japanese geopolitical concerns will play a major role when it comes to picking a buyer, perhaps as much as price. Similar to what we're seeing in the U.S. when it comes to Toshiba's bankrupt Westinghouse unit.
• Tax talk: Treasury Sec. Mnuchin yesterday backtracked on his prior backtrack when it comes to the White House timeline for releasing its tax plan.
• Where in the World: I'll be at the Milken Conference in Los Angeles in a couple of weeks, moderating a session on Shaping Digital Finance.
• Have a great weekend. Go Celts!
Schroders PLC (LSE: SDR) has agreed to acquire Swiss private equity firm Adveq Management, which has around $7 billion in assets under management, for an undisclosed amount.
- Why it's the BFD: Private equity has been one of the few missing strategies at Schroders, a FTSE 100 investment management company with a whopping $465 billion in AUM. So this helps it fill out the asset cupboard, while also helping Adveq expand well beyond its mostly Swiss and German client base (Adveq is expected to keep its entire team and global investment strategy). It's also the latest in an accelerating trend of private equity firms becoming acquisition targets themselves, either for total control of minority stakes.
Venture Capital Deals
• Microvast Power System, a Chinese developer of rapid-charging solutions for batteries and a subsidiary of Texas-based Microvast, has raised $400 million in new VC funding. CITIC Securities led the round, and was joined by CDH Investment and National Venture Capital. http://bit.ly/2o9Df1y
• Gladly, a San Francisco-based of cloud-based contact center solutions, has raised $36 million in Series C funding. GGV Capital led the round, and was joined by return backers Greylock and NEA. http://tcrn.ch/2pHcnmT
• Yeecall, a Chinese mobile app for making free voice and video calls, has raised $12 million in new VC funding led by Addor Capital. http://bit.ly/2p15zSX
• Narrative Science, a Chicago-based provider of natural language generation for the enterprise, has raised $11 million in Series D funding. Jump Capital and Sapphire Ventures were joined by return backers like USAA. http://bit.ly/2pXcslJ
• Groq, a stealth next-gen computing startup led by former members of Google's Tensor Processing Unit, have raised $10.3 million in VC funding from Social Capital, per CNBC. http://cnb.cx/2oskjHg
• Invertex, an Israeli fashion tech startup, has raised $2 million in seed funding from OurCrowd and Permoda. http://bit.ly/2pHCGcC
Private Equity Deals
• American Securities has completed its previously-announced purchase of Colorado-based medical helicopter operator Air Methods for around $2.5 billion, or $43 per share.
• Insight Venture Partners has acquired Spanning Cloud Apps, an Austin, Texas-based provider of SaaS data protection, from Dell EMC for an undisclosed amount. http://bit.ly/2oPOZoJ
• Marketo, a portfolio company of Vista Equity Partners, has agreed to acquire ToutApp, a San Francisco-based email management and analytics platform for sales, according to Fortune. No financial terms were disclosed. ToutApp raised just over $20 million in VC funding from firms like Andreessen Horowitz, Jackson Square Ventures, Founder Collective and Launch Fund. http://for.tn/2pIU7cK
• Select Energy Services, a Texas-based provider of water services for hydraulic fracturing, raised $122 million in its IPO. The Crestview Capital-backed company priced 8.7 million shares at $14 per share (below $15-$18 range), and will trade on the NYSE under ticker symbol WTTR. Credit Suisse was listed as left lead underwriter. www.selectenergyservices.com
• Creador said that it has fully exited its remaining stake in Somany Ceramics, a listed Indian ceramic tile-maker, adding that its total three year-old investment generated a 5.3x return and 77% IRR. http://bit.ly/2p2tHVh
• Insight Venture Partners has hired Evercore Partners to run a sale proves for SmartBear, a Somerville, Mass.-based software testing company that is expected to generate more than $30 million in 2017 EBITDA, according to a WSJ newsletter. http://on.wsj.com/2owThhn
• Microsoft (Nasdaq: MSFT) is in talks to acquire Israeli cloud storage analytics company Cloudyn for between $50 million and $70 million, according to a local media report. Cloudyn has raised over $20 million in VC fundiung from firms like Infosys, Carmel Ventures, Titanium Investment, RDseed and Rafael Development Corp. http://tcrn.ch/2ouoyBq
• Optimizely, a San Francisco-based experimentation platform for customer experience, has acquired Experiment Engine, a Buda, Texas-based conversion optimization platform. No financial terms were disclosed. Optimizely has raised over $150 million in VC funding, while Experiment Engine was seeded by Corsa Ventures, Founder Collective, Mercury Fund and Right Side Capital Management. http://tcrn.ch/2pB0NMU
• Unilever (LSE: ULVR) has agreed to acquire Sir Kensington's, a New York-based ketchup brand, for an undisclosed amount. Sellers include Verlinvest. http://nyti.ms/2oODT32
• BP (LSE: BP) is thinking about selling its stakes in three Canadian oil sands projects, according to Reuters. http://bit.ly/2oR9aT0
• Kindred Healthcare (NYSE: KND) is exploring a sale, according to Reuters. The Louisville, Ky.-based home health and hospice provider closed trading yesterday with a market cap of around $767 million. http://reut.rs/2owc5xe
• SNC-Lavalin Group (TSX: SNC) has agreed to acquire UK-based engineering and consulting firm WS Atkins (LSE: ATK) for US$2.67 billion. http://reut.rs/2pXgBG4
• Anacapa Partners, a San Mateo, Calif.-based lower middle-market private equity firm, is raising upwards of $100 million for its third fund, per an SEC filing. www.anacapapartners.com
• DFJ Growth has closed its third fund with $535 million in capital commitments. http://tcrn.ch/2pWk5Zm
• Growth Street Partners, an "early growth" venture firm led by ex-Mainsail Partners investors Stephen Wolfe and Nathan Grossman, has raised $70 million for its debut fund, per an SEC filing. www.growthstreetpartners.com
• Integral Group, a Japanese mid-market buyout firm, has closed on its third fund with around $670 million in capital commitments. http://bit.ly/2oQMoLk
• Top Tier Capital Partners is raising up to $200 million for its second "velocity" fund, which targets 2/3 venture secondaries and 1/3 co-investments, per an SEC filing. It already has closed on over $100 million. www.ttcp.com
• Anthony Choe has stepped down as a general partner with consumer-focused PE firm Brentwood Associates, according to Buyouts newsletter. http://bit.ly/2otm3QA
• Alex Hay has joined UK-based Sovereign Capital as a partner. He previously was a partner with RJD Partners. www.sovereigncapital.co.uk
• Emily-Jane Finigan is stepping down as a VP at Landmark Partners, in order to focus on a role within the impact investing space.
• Chris Moody has joined VC firm Foundry Group as a partner. He previously was VP and GM of data and solutions at Twitter. www.foundrygroup.com
• Chris Neale has joined UK-based Phoenix Equity Partners as a partner. He previously was an investment director with LDC. http://bit.ly/2obgPgx
• Seth Rosenberg has joined venture firm Greylock, before which he was a Facebook product manager focused on Messenger. www.greylock.com
• Philip Yau has joined GI Partners as a senior advisor. He previously was a managing director in the private funds group of UBS.