Oct 10, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Tuesday greetings from the home office. We'll know by end-of-day if Nelson Peltz or P&G prevail in their massive proxy battle, while the energy industry is prepping for Trump's repeal of the Clean Power Plan. Be sure to email me tips or drop em here anonymously. Okay, here we go...

Top of the Morning

Several months ago we first discussed the prospect of anti-trust action against technology giants. Pressure seemed to be coming from the right, in terms of Trump Administration animosity toward Silicon Valley antagonists. It also seemed to be coming from the left, in terms of income inequality and growing recognition that this generation's Masters of the Universe don't work on Wall Street. Some was just under the aegis of "I know it when I see it," in terms of everything from Facebook's relationship to media to Amazon's relationship with consumers.

The tech execs I spoke with mostly shrugged their shoulders, and then one more time for de-emphasis once Steve Bannon left the West Wing. But those sentiments are shifting, and it has nothing to do with mergers or market share.

What changed: Facebook's acknowledgment that Russian agents purchased ads around last year's election is a bit like stealing a car and then accidentally rear-ending a cop. Russia may be the initial bump, but it's liable to spark all sorts of other inquiries into big tech business models and products — with each new hearing or interview increasing D.C. knowledge of how Silicon Valley and its satellites actually work. Oh, and now it looks like Google might have done something similar.

Even if the Russia/social media story fades into oblivion, it could create regulatory ripples in everything from privacy to antitrust.

Bottom line: "This piqued the interest of people who didn't really care about so-called big tech before," says a senior D.C. rep of a major West Coast tech company. "Now they have reason to take out their magnifying glasses."

The BFD

Honeywell (NYSE: HON) announced that it will spin off its Homes and ADI global distribution business, which generates around $4.5 billion in annual revenue, into a separate stand-alone company. It also will do the same with its transportation systems unit, which brings in around $3 billion per year.

  • Why it's the BFD: Because Honeywell is playing honey badger to activist investor Third Point, which has been calling for a spin-off of the company's aerospace division. In fact, by spinning off those other units instead, Honeywell is effectively doubling down on aerospace at a time when the pending merger of Rockwell Collins and United Technologies (which Honeywell tried to buy) could make competing more difficult.
  • Bottom line: "Honeywell CEO Darius Adamczyk, like his peers at other industrial conglomerates, has been under pressure to pull apart a portfolio of disparate businesses that includes automotive turbo chargers, burglar alarms, and the Xtratuf boots popular in Alaska's fishing industry." — Reuters
Venture Capital Deals

• Tujia, a Chinese Airbnb rival, has raised $300 million in new funding at a $1.5 billion valuation co-led by Ctrip and All-Stars Investment. http://axios.link/LBnv

• Mapbox, a Washington, D.C.-based mapping and location platform for developers, has raised $164 million in Series C funding. SoftBank Vision Fund led the round, and was joined by return backers Foundry Group, DFJ Growth, DBL Partners, and Thrive Capital. http://nyti.ms/2gafjIt

• Tongdun Technology, a Chinese provider of risk control solutions, has raised $72.8 million in new VC funding co-led by Temasek and Xindahanshi Capital. http://axios.link/zN6c

• Huishoubao, a Chinese smartphone recycling company, has raised $45 million in Series B funding. Strait Capital led the round, and was joined by Source Code Capital, SMC Capital China, CITIC and Chengwei Capital.

• Verve (f.k.a. StreetTeam), a UK-based online sales platform for advocacy programs, has raised $18.5 million in Series B funding. Draper Esprit led the round, and was joined by return backers Kindred Ventures, Frontline Ventures and Backed. http://tcrn.ch/2y6VRAU

• Ascendify, a San Francisco-based provider of predictive analytics for talent management, has raised $11 million in Series A funding. Canaan Partners led the round, and was joined by GE Ventures and Cisco Investments. http://axios.link/CzVf

🚑 Sight Sciences, a Menlo Park, Calif.-based ophthalmic medical device startup, has raised $10 million in Series C funding led by Allegro Investment Fund. http://axios.link/Xr0W

🚑 ImaginAb, an Inglewood, Calif.-based immuno-oncology imaging company, has raised $8 million in new VC funding led by Adage Capital. Other backers include the Parker Institute for Cancer Immunotherapy, NVF, Cycad Group, Nextech Invest and Jim Pallotta. http://axios.link/pmNt

• Visor, an online tax filing and advisory startup, has raised $6.5 million in seed funding. Obvious Ventures led the round, and was joined by Social Capital, Maveron, Lux Capital, Fika Ventures, Box Group and individuals like Niklas Zennström. www.myvisor.com

• Veeba Food Services, a Mumbai-based condiments and sauce maker, has raised around $6 million in Series C funding led by existing backer Verlinvest, per LiveMint. http://axios.link/iXzE

• Standard Cognition, a San Francisco-based developer of automated retail checkout solutions, has raised $5 million in seed funding. CRV led the round, and was joined by Initialized Capital and Y Combinator. http://tcrn.ch/2kDzEYl

Private Equity Deals

🚑 The Halifax Group has acquired Delphi Behavioral Health Group, an operator of substance abuse treatment centers in California and Florida. No financial terms were disclosed. www.delphihealthgroup.com

• Ionisos, a provider of cold sterilization services in France and Spain, today has acquired sterilization specialist Scandinavian Clinics Estonia, a specialist in sterilization solutions. No financial terms were disclosed. Ionisos is a portfolio company of Ardian. www.ionisos.fr

🚑 KKR has acquired Covenant Surgical Partners, a Nashville-based owner and operator of ambulatory surgery centers focused on endoscopy and ophthalmology, from DFW Capital Partners. No financial terms were disclosed. www.covenantsurgicalpartners.com

• Marlin Equity Partners has acquired a majority stake in AppRiver, a Gulf Breeze, Fla.-based provider of cybersecurity and productivity software and services. No financial terms were disclosed. http://axios.link/euiS

• TPG Capital has completed its previously-announced acquisition of Transplace, a Frisco, Texas-based provider of transportation management services, from Greenbriar Equity Group. No financial terms were disclosed. www.transplace.com

Public Offerings

• Bakkavor, a British prepared meals maker, is prepping a London IPO for next month that could value the company at upwards of £1.5 billion, per Reuters. http://reut.rs/2kAwaWg

• HelloFresh, a German meal kit subscription service, said that it will launch a Frankfurt IPO that could raise between €200 million and €300 million (thus valuing the company at up to €1.5 billion). http://reut.rs/2gq53ZF

⛽ Lone Star Funds is considering an IPO for British gas station operator MRH, which could value the business at around £1.5 billion, according to Bloomberg. https://bloom.bg/2ycHNrX

Liquidity Events

• Gridiron Capital is seeking a buyer for Dent Wizard, a Bridgeton, Mo.-based provider of auto reconditioning services, according to Dow Jones. www.dentwizard.com

• L Catterton is seeking a buyer for Singapore-based restaurant chain Crystal Jade Group, according to DealStreetAsia. http://axios.link/PCo0

More M&A

• General Motors' self-driving car unit Cruise has acquired Strobe, a Pasadena, Calif.-based startup developing LiDAR, for an undisclosed amount. http://axios.link/zCfZ

• Public Securities Group, a unit of Brookfield Asset Management, has agreed to buy Center Coast Capital, a Houston-based energy infrastructure investment firm with over $4 billion in AUM. http://reut.rs/2y79umd

🚑 Pfizer (NYSE: PFE) announced that it is reviewing strategic alternatives for its consumer healthcare business –including brands like Advil and Centrum – which generates around $3.4 billion in annual revenue.

Fundraising

• Ascribe Capital is raising up to $1.25 billion for its fourth distressed debt fund, per Dow Jones. www.ascribecapital.com

• Carrick Capital Partners is raising up to $400 million for its third fund, per an SEC filing. www.carrickcapitalpartners.com

• The Public Investment Fund of Saudi Arabia has launched a $1 billion private equity and venture capital fund-of-funds.

• Vickers Venture Partners of Singapore has closed its fifth fund with $230 million in capital commitments. http://axios.link/h2Na

It's Personnel

🚑 Michelle Dipp has joined General Atlantic as a New York-based managing director, focused on healthcare investments. She previously was a general partner with Longwood Fund. General Atlantic also has added Andy Slavitt, former Acting Administrator for the Centers for Medicare & Medicaid Services, as a senior advisor. www.generalatlantic.com

Dan Primack