Nov 15, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Bleary-eyed greetings from the home office, after an overnight flight back from the West Coast. Please be sure to send feedback and tips via email at dan@axios.com or via our anonymous submission form (http://axios.com/tips). Okay, here we go...

Top of the Morning

Ding dong, the dumb deal is dead.

Sen. Orrin Hatch, chair of the Senate Finance Committee, released markups to the Senate tax plan, and gone was the bit about taxing stock options and restricted stock units at the time of vesting. Moreover, it largely mirrored a House plan to allow startup employees to defer taxes on exercised options until there is a liquid market for the underlying securities.

As National Venture Capital Association president Bobby Franklin just emailed, "the entrepreneurial ecosystem can breathe a sigh of relief."

Other big Senate tax plan changes:

  • Individual tax cuts would expire in 2025, but the corporate cut to 20% would be permanent. Certain new pass-through entity rules also would be temporary.
  • Obamacare's individual mandate would be revoked, thus decreasing the likelihood of tax legislation actually getting passed in 2017 (which the stock markets have clearly noticed).

• Market warning yesterday from Yale University investment boss David Swensen (via Bloomberg): "When you compare the fundamental risks that we see all around the globe with the lack of volatility in our securities markets, it's profoundly troubling... [It] makes me wonder if we're not setting ourselves up for an '87, or a '98 or a 2008-2009."

• Waaaaay too soon: Justin Caldbeck is attempting a comeback — not as a venture capitalist, but as someone who can help steer other men clear of becoming part of "tech bro culture." At the same time, Binary Capital limited partners say that Caldbeck remains somewhat involved behind the scenes, as tentative agreements to remain the general partner on Funds I and II remain... well, tentative.

• Let's try that again: Yesterday I linked you to a video of Rep. Diane Black's bizarre comments on carried interest taxation, but the CNBC video cut out before the relevant portion. Problem solved (skip to 6:40).

• Quiz time: Can you name the CPG startup that just got acquired for $100 million by a Fortune 50 company? Hint: Based on the West Coast and this isn't the serial entrepreneur's first sale.

• It gets stranger: Venture capitalist Steve Juvertson wrote on Facebook last night that his departure from DFJ was "because of interpersonal dynamics with my partners" that began to break down after "vicious and wholly false allegations about sexual predation and workplace harassment." Read his full post.

  • It continues to be notable that there are no public allegations of "workplace harassment" against Jurvetson, and the only public allegation of "sexual predation" is vague at best. A shoe may still fall loudly, but it hasn't happened yet.

• All hail breaks loose: As of late yesterday, SoftBank had not yet communicated a tender price for Uber shares.

The BFD

Indigo Partners, a Phoenix-based private equity firm focused on transportation, has agreed to acquire 430 planes from Airbus (Paris: AIR). The planes, which will be leased out to four budget carriers, have a list price of $49.5 billion — although Airbus "regretfully" says that Indigo didn't pay full freight.

  • Why it's the BFD: This is the largest aircraft sale by volume in history and, even with a discount, likely is too on price.
  • Rivals: This was a welcome win for Airbus, which had been seen as falling behind at the Dubai Air Show. But while champagne corks were popping in Paris, Boeing struck back a bit with a sale of at least 175 planes to FlyDubai at a book price of $27 billion.
  • Trump bait: Indigo founder Bill Franke, the former US Air and America West CEO known for his pre-IPO investment in Ireland's RyanAir, noted that final assembly of the French planes will be done in Mobile, Alabama.
Venture Capital Deals

• yMatou.com, a Chinese cross-border e-commerce company, has raised more than $100 million in Series C funding led by China Merchants Capital. http://axios.link/tWum

• Poshmark, a Redwood City, Calif.-based social marketplace for fashion, has raised $87.5 million in Series D funding. Temasek led, and was joined by Mayfield, Menlo Ventures, GGV Capital, Inventus Capital, Uncork Capital, Union Grove Venture Partners and Cross Creek Advisors. http://axios.link/sXNv

• Maimai.cn, a Chinese social network focused on business and careers, has raised $75 million in Series C funding. DCM Ventures led, and was joined by Zhaopin Ltd. and return backers IDG Capital and Morningside Venture Capital. http://axios.link/lKeP

🎼 United Masters, a next-gen record label led by former Interscope Records president Steve Stoute, has raised $70 million from Alphabet, Andreessen Horowitz and 20th Century Fox. http://axios.link/nISB

🚑 Inozyme Pharma, a Cambridge, Mass.-based developer of medicines to treat rare diseases of calcification, has raised $49 million in Series A funding. Longitude Capital led, and was joined by NEA, Novo Ventures and Sanofi Ventures. http://axios.link/gNEy

• Beijing Jinying, a Chinese mobile app for book and movie reviews, has raised $40 million in Series B funding co-led by Yunfeng Capital and Xiaomi. Other backers include Fosun International and SIG Asia. http://axios.link/aXFo

🚑 ImmusanT, a Cambridge, Mass.-based developer of a therapeutic vaccine to induce immune tolerance in celiac disease, has raised $40 million in Series C funding from Arch Venture Partners and Vatera Healthcare Partners. http://axios.link/aWCs

🚑 Health IQ, a Mountain View, Calif.-based life insurance provider for healthy people, has raised $34.6 million in Series C funding. Andreessen Horowitz is leading, and was joined by CRV, First Round Capital and Foundation Capital. http://axios.link/L1FW

🚑 Torque, a Cambridge, Mass.-based immuno-oncology startup, has raised $25 million from Flagship Pioneering. http://axios.link/CqJA

• TrueAccord, a San Francisco-based debt collection startup, has raised $22 million in new funding. Arbor Ventures led, and was joined by Abhor, Nyca Investment Partnership, Assurant Growth Investing, Caffeinated Capital Fund, Felicis Venture, TenOneTen and Crystal Towers. http://axios.link/8gsX

🚑 Locus Biosciences, a Raleigh, N.C.-based developer of CRISPR-based antimicrobial drugs, has raised $19 million in Series A funding. Artis Ventures led, and was joined by Tencent, Abstract Ventures and the North Carolina Biotechnology Center. http://axios.link/YH3l

• Medigate, an Israeli cybersecurity startup focused on connected medical devices, has raised $5.35 million in seed funding from YL Ventures and Blumberg Capital. http://axios.link/m5eo

• WireWheel.io, an Arlington, Va.-based data privacy and protection platform, has raised $3.1 million in seed funding co-led by PSP Growth and NEA. www.wheelwire.io

Private Equity Deals

ADT, the physical security company owned by Apollo Global Management, is expanding into cybersecurity via the purchase of Scottsdale, Ariz.-based Datashield. http://axios.link/oTnv

• Ametros Financial, a Wilmington, Mass.-based provider of post-settlement medical administration solutions, has raised an undisclosed amount of growth capital funding from Long Ridge Equity Partners. www.ametroscards.com

Arlington Capital Partners has acquired Cadence Aerospace, an Anaheim, Calif.-based maker of aerospace components and assemblies, from Court Square Capital Partners. www.cadenceaerospace.com

🚑 Arlington Capital Partners has acquired a majority stake in Grand River Aseptic Manufacturing, a Grand Rapids, Mich.-based contract manufacturing company focused on parenteral pharmaceuticals. Sellers include the Municipal Employees' Retirement System of Michigan. http://axios.link/xLFY

🚑 The Carlyle Group has expressed interest in Envision Healthcare (NYSE: EVHC), a $3.4 billion healthcare services company that is under pressure from activist Starboard Value, according to Bloomberg. Also circling is a consortium that includes Onex Corp., Clayton Dubilier and Hellman & Friedman. http://axios.link/CT6Z

🚑 Odyssey Investment Partners has acquired TrialCard, a Morrisville, N.C.-based provider of pharma market access solutions, from Excellere Partners. http://axios.link/nwDr

OMERS Private Equity has agreed to acquire a majority stake in Trescal, a French calibration services company, from Ardian at an enterprise value of around €670 million. http://axios.link/PWp6

Siris Capital Group has completed its previously-announced purchase of Intralinks, a provider of data sharing and enterprise collaboration solutions, from Synchronoss Technologies (Nasdaq: SNCR) for approximately $1 billion. http://axios.link/gH5E

Public Offerings

• Hudson Group, a UK-based travel retail concessions company controlled by Dufry (SWX:DUFN), has filed for a $100 million IPO. The company plans to trade on the NYSE under ticker HUD, with Credit Suisse listed as left lead underwriter. It reports $24.2 million in net income on around $1.35 billion of revenue for the first nine months of 2017. www.hudsongroup.com

• SendGrid, a Denver-based email marketing platform, raised $131 million in its IPO. The company priced 8.2 million shares at $16 (vs. plans to offer 7.7m shares at $13.50-$15.50). It will trade on the NYSE under ticker SEND, while Morgan Stanley and J.P. Morgan served as lead underwriters. SendGrid reports a $3 million net loss on $38 million in revenue for the first half of 2017, and had raised over $80 million in VC funding from firms like Foundry Group (29.64% pre-IPO stake), Bessemer Venture Partners (22.51%), Highway 12 Ventures (13.9%) and Bain Capital Ventures (7.03%). http://axios.link/1Kje

Liquidity Events

• Olympus Partners has agreed to sell Centerplate, a Stamford, Conn.-based stadium catering company, to Sodexo (Paris: EXHO) for $675 million in cash. http://axios.link/cavJ

More M&A

🚑 Bayer has paid upwards of $1.55 billion (including $400m upfront) to develop and commercialize a group of TRK inhibitors owned by Loxo Oncology (Nasdaq: LOXO). http://axios.link/yP61

🚑 Cardinal Health (NYSE: CAH) has agreed to sell its China business to Shanghai Pharma for an enterprise value of $1.2 billion (including of shareholder loans). http://axios.link/huJi

• Cerberus Capital Management has acquired a 3% stake in Deutsche Bank, making it the German bank's fourth-largest shareholder. http://axios.link/5T5z

• Cloudflare, a San Francisco-based web performance and security platform, has acquired Neumob, a Sunnyvale, Calif.-based startup focused on speeding up mobile apps and increasing conversions. Neumob had raised nearly $11 million in VC funding from firms like Accel. http://axios.link/3tIt

• Go-Jek, an Indonesian ride-hail company, has acquired a majority stake in local payment services provider Kartuku for around $50 million, according to DealStreetAsia. Go-Jek backers include DST, JD.com and Lombard Investments. http://axios.link/Jpn8

⛽ SandRidge Energy (NYSE: SD) has agreed to acquire rival oil and gas company Bonanza Creek (NYSE: BCEI) for $746 million in cash and stock. http://axios.link/F7sl

Fundraising

• Arrowroot Capital Management, a Santa Monica, Calif.-based growth equity firm focused on software companies, has closed its third fund with $177 million. www.arrowrootcapital.com

• Sapphire Ventures is raising up to $100 million for what it's calling the SportsTech Fund. www.sapphireventures.com

• XVC, a Beijing-based venture firm led by Boyu Hu (ex-Blue Lake, DCM) is raising up to $100 million for its debut fund, per an SEC filing.

It's Personnel

• Grant Beard, chairman of Advanced Energy (Nasdaq: AEIS), has been named an executive-in-residence with Summit Partners. www.summitpartners.com

• Ben Kahn has joined Boston-based private equity firm Exaltare Capital Partners as a managing director. He previously was a principal with H.I.G. Growth Partners. www.exaltarecapital.com

• DJ Patil, former U.S. Chief Data Scientist under President Obama, has joined VC firm Venrock as an advisor. http://axios.link/0vcx

• President Trump is considering former PIMCO and Harvard Management Co. boss Mohamed El-Erian for the Federal Reserve's vice chairman role, according to the WSJ. http://axios.link/bnbF

Dan Primack