Jun 27, 2018

Axios Pro Rata

By Dan Primack
Dan Primack

Greetings from the home office, before I hop on a cross-country flight to LA. If this was forwarded to you, please subscribe. And remember you can send scoop and feedback via email (dan@axios.com) or anonymous tip (http://axios.com/tips). Here we go...

Top of the Morning
Illustration: Lazaro Gamio/Axios

The White House will not propose new investment restrictions on China or other countries, outside of what Congress was already planning to do in terms of strengthening The Committee on Foreign Investment in the U.S. (CFIUS).

  • In May, the White House said it "will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology. The list of restrictions and controls will be announced by June 30, 2018."
  • Then the WSJ reported on Sunday that Treasury would impose not only new, China-focused restrictions on inbound investment, but also on U.S. tech exports.

But neither of those things are happening, which will cause partial sighs of relief from Wall Street to Silicon Valley ("partial" because the broader tariff issues remain, and the Commerce Dept is still pursuing a "Section 232" investigation).

Instead, Trump said he supports the bipartisan CFIUS strengthening bill (FIRRMA) which we've discussed previously. The House version passed yesterday 400-2 (not a typo) and also passed the Senate as part of a broader defense bill. Next it will head into conference.

  • Bottom line: This more modest approach comes as Senate Republicans have been considering ways to limit Trump's authority on trade, and is the latest example of how the President's bark on trade is often worse than its bite.

Fintech fall: Nadeem Shaikh, a former top exec with First Data, is out as CEO of Anthemis Group, the London-based VC firm he founded to invest in financial tech startups. Employees were told it related to some unspecified behavior not consistent with firm values — which is the sort of explanation that creates more questions than it answers.

The Justice Department doesn't believe that Monday's Supreme Court ruling on American Express would make it harder to bring antitrust actions against big tech companies that use two-sided marketplaces, per comments yesterday by DoJ antitrust chief Makan Delrahim:

"I was more worried the Supreme Court would come up with a test [that would] cause harm to new business models like Uber and Airbnb."

Today in Abraaj: The firm is telling investors that it needs to close the previously-announced sales to Colony Capital by July 1, but WSJ reports that some investors are objecting. Meanwhile, UAE authorities have issued an arrest warrant for Abraaj founder Arif Naqvi, based on allegations that he wrote a bad check.

The BFD
Source: Giphy

Conagra Brands (NYSE: CAG) has agreed to buy Pinnacle Foods (NYSE: PF), whose brands include Bird's Eye and Vlasic, for around $8.2 billion in cash and stock (not including assumed debt).

  • Why it's the BFD: Because it's reflective of how legacy food companies are hoping that increased size can help offset changing consumer tastes.
  • Terms: The deal works out to $68 per share, a 23% premium to where Pinnacle was trading before activist investor Jana Partners disclosed a 9.5% equity stake and began pushing for a sale. Pinnacle shareholders will receive $43.11 per share in cash and 0.65 shares of Conagra common stock, and would hold around a 16% stake in the combined company.
  • Bottom line: "The pressure on packaged-food makers to get bigger has intensified in the aftermath of Whole Foods' sale last year to Amazon. Frozen food, however, is considered relatively resistant to Amazon’s push to get shoppers to buy more groceries online because they’re tricky to deliver." — Bloomberg
Venture Capital Deals

🚑 Precision BioSciences, a Durham, N.C.-based developer of a genome editing platform, raised $110 million in Series B funding. ArrowMark Partners led, and was joined by Franklin Templeton, Cowen, Brace Pharma Capital, Pontifax AgTech, OCV Partners, Adage Capital Management, Cormorant, Gilead, Vivo Capital, Alexandria Venture Investments, Ridgeback Capital, Agent Capital, Leerink Partners and return backers venBio, F-Prime, RA Capital, Amgen Ventures, Osage University Partners, DUMAC and the Longevity Fund. http://axios.link/lFRu

Celonis, a German provider of process mining software, raised $50 million in Series B funding at a $1 billion valuation from return backers Accel and 83North. http://axios.link/CSxx

CloudBees, a San Jose, Calif.-based enterprise DevOps startup, raised $37 million in new equity funding. Delta-v Capital led, and was joined by return backers Matrix Partners, Lightspeed Ventures, Unusual Ventures and Verizon Ventures. The company also secured $25 million in debt financing from Golub Capital. http://axios.link/LwNt

CashShield, a Singapore-based provider of online fraud management solutions, raised $20 million in Series B funding co-led by Temasek and GGV Capital. http://axios.link/b5O6

SimpleNexus, a Lehi, Utah-based mobile mortgage platform, raised $20 million from Insight Venture Partners. www.simplenexus.com

Honk Technologies, an Uber-for-towing, raised $18 million. Altpoint Ventures led, and was joined by Structure Capital and Venture 51. http://axios.link/Hhbx

Matternet, a Menlo Park-based provider of autonomous drone logistics, raised $16 million in Series A funding. Boeing HorizonX Ventures led, and was joined by Swiss Post, Sony Innovation Fund and Levitate Capital. www.mttr.net

WaterBit, a San Jose, Calif.-based provider of autonomous irrigation solutions, raised $11.4 million in Series A funding. NEA led, and was joined by Heuristic Capital and TJ Waters (ex-Cypress Semi CEO). www.waterbit.com

Homee, a Tampa, Fla.-based on-demand property maintenance platform, raised $11 million in new funding. Activate Capital Partners led, and was joined by Home Depot, Engage and return backers Florida Funders, FAN Fund and Bialla Venture Partners. http://axios.link/Td4s

Social SafeGuard, a Charlottesville, Va.-based provider of cybersecurity solutions focused outside corporate firewalls, raised $11 million in Series B funding from AllegisCyber and NightDragon Security. http://axios.link/THq6

Pared, an on-demand tool for restaurant workers, raised $10 million in new funding. CRV led, and was joined by return backers Uncork Capital and True Ventures. http://axios.link/jQNM

🚑 FirstVet, a Swedish provider of telehealth services for pets, raised €5.1 million in Series A funding led by Creandum. http://axios.link/8FfS

Cleeng, an Amsterdam-based provider of video e-commerce solutions for broadcasters, raised €5 million in Series B funding. Walvis led and was joined by return backer C4 Ventures. www.cleeng.com

Cypress.io, an Atlanta-based automated testing framework, raised $4 million in seed funding co-led by LOVC and Bessemer Venture Partners. http://axios.link/ZtQY

AIpark, a Beijing-based provider of smart urban parking management solutions, raised “hundreds of millions” in Series B funding led by NIO Capital. http://axios.link/FKcB

Private Equity Deals

Cerberus Capital Management completed its previously-announced purchase of ECI, a St. Louis-based maker of wire harnesses and other assemblies for consumer and industrial electronics from KPS Capital Partners.

Elite SEM, a New York-based digital marketing agency backed by Mountaingate Capital, acquired Email Aptitude, a San Rafael, Calif.-based CRM and email marketing firm. www.emailaptitude.com

Montagu Private Equity has agreed to acquire Wireless Logic, a British provider of IoT and machine-to-machine platform services, from CVC Capital Partners. www.wirelesslogic.co.uk

TPG Capital completed its purchase of Wind River, an Alameda, Calif.-based provider of IoT software, from Intel (Nasdaq: INTC). http://axios.link/CNPu

⛽ Warburg Pincus and Ouro Preto Óleo e Gás (backed by EIG Global Energy) have made bids for a group of mature, shallow-water oilfields being sold by Brazil’s Petrobras for around $1 billion, per Reuters. http://axios.link/344d

Public Offerings

🚑 Neon Therapeutics, a Cambridge, Mass.-based developer of neoantigen-targeted therapies for cancer, raised $100 million in its IPO. The pre-revenue company priced 6.25 million shares at $16 (middle of range), and will trade on the Nasdaq (NTGN). Morgan Stanley was lead underwriter. Neon had raised around $160 million from firms like Third Rock Ventures (44.4% pre-IPO stake), Access Industries (12.7%), Fidelity (7.5%) and Partner Fund Management (6.8%). www.neontherapeutics.com

Selecta Group, a Swiss vending machine company owned by KKR, is prepping a Switzerland IPO that could come by year-end, per Reuters. http://axios.link/B8jr

More M&A

⛽ China Three Gorges has spoken with European utilities about buying the U.S. renewable energy assets of Portugal’s EDP, which it is seeking to buy for around $10.8 billion, per Reuters. http://axios.link/3L2r

⛽ Carl Icahn upped his stake in oil and gas producer Energen (NYSE: EGN) from 3.8% to 4.3%, increasing speculation that he plans a takeover attempt. http://axios.link/lyj2

Eutelsat (Paris: ETL) said it will not make a takeover bid for British satellite operator Inmarsat (LSE: ISA), which is the subject of interest from EchoStar (Nasdaq: SATS). http://axios.link/L1ue

UST Global, an Aliso Viejo, Calif.-based digital services provider, raised $250 million from Temasek. http://axios.link/Fz3D

Fundraising

Highland Europe has raised €463 million for its latest growth-stage tech fund. http://axios.link/N4Te

Pathway Capital Management raised $602 million for a new private equity co-investment fund. www.pathwaycapital.com

It's Personnel

Larry Grafstein, co-head of M&A at UBS, is joining RBC Capital Markets as deputy chair of investment banking. http://axios.link/pGto

🚑 Sophie Kornowski is stepping down as an EVP of Roche Partnering to join Gurnet Point Capital as a senior partner. www.gurnetpointcapital.com

Morgan Stanley added former SEC chair Mary Schapiro to its board of directors. www.morganstanley.com

Final Numbers
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Data: Yahoo! Finance; Chart: Lazaro Gamio/Axios
Dan Primack