Nov 30, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

A quick reminder that your colleagues can now sign up for Pro Rata by going to http://GetProRata.axios.com. Consider it an early (and cheap) holiday gift. Okay, here we go...

Top of the Morning

The Carlyle Group has quietly held a first close of more than $13 billion for its seventh flagship buyout fund, which means it's already larger than 2013-vintage Carlyle Partners VI, per a source. The official target remains $15 billion, but don't be surprised if the final figure is higher.

• Tax talk: Axios' Caitlin Owens breaks down what the Senate GOP tax bill does and doesn't do.

  • Some senators reportedly are now discussing a corporate rate above 20%, and there has been no final decision made on including triggers tied to economic growth (or whether such triggers, if adopted, would focus on spending cuts or increasing corp rates). But Senate GOP leaders still expect a vote today or tomorrow.
  • The NY Times reports that the Treasury Department has not actually conducted a economic growth analysis of the full tax plan, despite Sec. Mnuchin having repeatedly promising to release one.

• Speaking of things that may not exist: Sarah Huckabee Sanders did not provide Axios with that promised list of specific instances when the CFPB didn't act in the best interests of consumers, nor did another member of the WH press office. So no clue on what Trump or Mick Mulvaney think about the payday lending rules that could be key to the success or failure of Curo Group's IPO.

• Hammer Time: On Tuesday we noted that the private equity arm of Koch Industries would receive quarterly briefings with senior Meredith Corp. execs, as part of Koch's $650 million equity investment in support of Meredith's purchase of Time Inc. More info:

  • A Meredith spokesman says that while the company met with Koch Equity Development staff while working on the bid, it never once met or spoke about Time Inc. with either Charles or David Koch.
  • A Koch spokesman says the quarterly meeting language is included in all of KED's "passive" investments, rather than it being anything particular to Time Inc.

• Cross-border VC: Axios' Ina Fried is in Finland for a tech conference, and reports that 2016 marked the first time that foreign investors put more money into Finnish startups than did the government. More here.

• Bad reception: AT&T on Tuesday filed its legal reply to the Department of Justice's attempt to block its $85 billion purchase of Time Warner. And it's offering a big concession: If the Time Warner deal closes, AT&T would agree to seven years of "baseball style" binding arbitration with distributors, and also that it would not pull Turner content from rival distributor systems while such arbitration is ongoing. The offer does not include HBO, which also is a Time Warner property, because HBO is sold directly to consumers rather than via distributed bundles. Read the full 29-page reply.

• Flight fight: DJI, the Chinese drone-maker that has raised over $600 million from firms like Accel and Kleiner Perkins, has been accused by U.S. officials of possibly using its drones to relay "U.S. critical infrastructure and law enforcement data to the Chinese government." DJI is calling the accusations "insane." Fast Company has more.

• All hail breaks loose: Just kidding. Let's ignore this mess for at least a day...

The BFD

Uptake, the Chicago-based industrial predictive analytics company led by Groupon co-founder Brad Keywell, has raised $117 million in Series D funding at a $2.3 billion post-money valuation. Baillie Gifford led, and was joined by return backers Revolution Growth and GreatPoint Ventures.

  • Why it's the BFD: Because this is a major vote of confidence in Uptake, just days after it was revealed that Caterpillar pulled its early investment in the company. No word on if Cat exited via a sale into this new round, although Uptake does say that the industrial giant remains a customer.
  • Bottom line: "Uptake is capitalizing on two existing factors in the industrial market. The first is that most industrial companies do have some kind sensors on their equipment today, but most of the time they are completely unused... The second is that these businesses are losing millions and sometimes billions because of aging and faulty equipment that they are not able to monitor and service correctly." — Ingrid Lunden, TechCrunch
Venture Capital Deals

SenseTime, a Beijing-based developer facial recognition technology, reportedly has raised $227 million in new funding from Alibaba at a $3 billion post-money valuation. The company previously raised a $410 million tranched-out Series B round at a $1.5 billion post-money valuation co-led by CDH Investments and Sailing Capital. http://axios.link/GmY7

🚑 Semma Therapeutics, a Cambridge, Mass.-based regenerative medicine startup that has an initial focus on diabetes, has raised $114 million in Series B funding. Eight Roads Ventures and Cowen Healthcare co-led, and were joined by ORI Healthcare Fund, Wu Capital, 6 Dimensions Capital, SinoPharm Capital and return backers MPM Capital, F-Prime Capital Partners, ARCH Venture Partners, Novartis, Medtronic and the JDRF T1D Fund. http://axios.link/zJfv

🚑 Codiak BioSciences, a Cambridge, Mass.-based developer of exosome therapeutics, has raised $76.5 million in Series C funding. Qatar Investment Authority, Boxer Capital, Sirona Capital, EcoR1 Capital and Casdin Capital were joined by return backers Arch Venture Partners, Flagship Pioneering, Fidelity, Alaska Permanent Fund and Alexandria Venture Investments. http://axios.link/fEDo

🚑 Fractyl Labs, a Lexington, Mass.-based developer of diabetes treatments, has raised $44 million in Series D funding. Backers include GV, True Ventures, IDO Fund, General Catalyst, Bessemer Venture Partners, Domain Associates, Mithril Capital Management, Emergent Medical Partners and Deerfield Management. http://axios.link/Bdsu

🚑 ResTORbio, a Boston-based developer of therapeutics for age-related diseases, has raised $40 million in Series B funding. OrbiMed led, and was joined by Fidelity, Rock Springs Capita, Quan Capital and Nest Bio. www.restorbio.com

• Deposit Solutions, a German "open banking platform" for deposits, has raised $20 million in new funding from return backers e.ventures and Greycroft. www.deposit-solutions.com

• Revel, a Minneapolis-based provider of health engagement software, has raised over $17 million in equity funding from TT Capital Partners. www.revel-health.com

• Pwnie Express, a Boston-based provider of IoT security solutions, has raised $8 million in new funding from .406 Ventures, Ascent Venture Partners, Fairhaven Capital and the Vermont Center for Emerging Technologies. It also named Todd DeSisto (ex-CEO of Axeda Corp) as its new CEO. http://axios.link/VDbB

🚑 Akouos, a biotech startup focused on restoring and preserving hearing, has raised $7.5 in seed funding co-led by 5am Ventures and NEA. www.akouos.com

• Replika, an "AI confidant" app, has raised $6.5 million in Series A-2 funding from Khosla Ventures, Sherpa Capital, Phil Libin and Richard Socher. www.replika.ai

• Terbium Labs, a Baltimore-based startup "that scans the dark web for stolen information," has raised $6 million in new funding led by Glasswing Ventures. http://axios.link/WTIr

• APEXX, a London-based global payments marketplace, has raised £3.2 million in seed funding led by Forward Partners. http://axios.link/ZTSe

• Envisagenics, a New York-based biotech startup that leverages AI to generic sequences, has raised $2.35 million in seed funding from Third Kind VC, Cosine, Dolby Family Ventures, Dynamk Capital, SV Angel and NY Empire State Development. www.envisagenics.com

Private Equity Deals

• Ardian has agreed to acquire a control stake in DRT, a French producer of ingredients derived from plant-based chemistry, at an enterprise value of around €1 billion. Seller Tikehau Capital will reinvest for a minority ownership stake. www.drt.fr

• Bernhard Capital Partners has formed Atlas Technical Consultants, a project delivery firm, via the acquisitions of three companies: Moreland Altobelli Associates, PAVETEX Engineering and Engineering Testing Services. The combined company will have offices in 11 states and over 1,000 employees. www.atlastechnical.us

• Bullhorn, a Boston-based recruiting software company owned by Insight Venture Partners, has acquired Peoplenet, an Atlanta-based provider of workforce management software, from The Gores Group. www.bullhorn.com

• BV Investments Partners has acquired a majority stake in Apps Associates, an Acton, Mass.-based IT services group. www.appsassociates.com

• Cerberus Capital Management has acquired a majority stake in most of BBVA's Spanish real estate business for €4 billion. http://axios.link/uAMv

• Clearlake Capital Group has launched an acquisition platform called Disruptive Brands, which will focus on "better-for-you" food and beverage brands. It will be led by Bill Moses, former chairman and CEO of KeVita Probiotic Drinks. www.clearlakecapital.com

• eLocal, a Conshohocken, Penn.-based provider of digital performance marketing solutions for service businesses, has raised $25 million from LLR Partners. www.elocal.com

• Unilever has narrowed the field for its margarine and spreads business, which could be worth more than $7 billion, to three bidders, per Reuters: Apollo Global Management, CVC Capital Partners and KKR. http://axios.link/jOF9

Public Offerings

• GFL Environmental, a Canadian waste management company backed by HPS Investment Partners and Macquarie Infrastructure Partners, is seeking to raise upwards of C$1 billion via an IPO in Q1 2018, according to Reuters. http://axios.link/v3lX

⛽ IPSCO Tubulars, the U.S. subsidiary of Russian steel pipe-maker TMK, said that it is considering an IPO. http://axios.link/GkX0

• Nissin Foods (Tokyo: 2897) is launching a Hong Kong IPO for its instant noodle unit, which could raise upwards of $145 million. http://axios.link/fDDO

Liquidity Events

• Altran (Paris: ALTT) has agreed to acquire Arcient, a Redwood City, Calif.-based design and engineering company, for $2.01 billion from an investor group led by KKR. http://axios.link/IzHI

• Innovid, a New York-based provider of interactive video advertising solutions, has acquired Taykey, an Israel-based provider of digital marketing solutions. Innovid has raised $65 million in VC funding, while Taykey had raised $35 million from Innovation Endeavors, SoftBank Capital, Sequoia Capital, Marker LLC and Tenaya Capital. http://axios.link/IFKs

More M&A

• Caesars Entertainment (Nasdaq: CRZ) has agreed to sell the real estate assets of its Harrah's Las Vegas hotel to VICI Properties (OTC: VICI) for $1.14 billion in cash. http://axios.link/bs2t

⛽ China Energy Reserve and Chemicals Group has offered to buy Australian oil and gas producer AWE Ltd. (ASX: AWE) for A$430 million. http://axios.link/7MAR

• Cumulus Media, an Atlanta-based radio station owner and operator, has filed for Chapter 11 bankruptcy protection, but says it has enough cash on hand that it will not seek debtor-in-possession financing. http://axios.link/kPGp

• Nokia is denying a CNBC report that it plans to make a takeover bid for Juniper Networks (NYSE: JNPR). http://axios.link/unBV

Fundraising

• Churchill Asset Management, a unit of Nuveen, has raised $1.1 billion for a middle market senior loan fund. www.churchillam.com

• Investec said that its £3 billion asset management arm used to target a 5% exposure to listed private equity firms, but sold all its shares in Q3 and does not plan to return to the sector. http://axios.link/I2MO

• Lightyear Capital has closed its fourth private equity fund with $950 million in capital commitments, plus $75 million for a related co-investment fund. www.lycap.com

It's Personnel

• Catalyst Investors has promoted Susan Bihler to partner. She joined the firm in 2009, and serves on the boards of Clinicient, Datavail and Envoy Global. www.catalyst.com

• John Jureller has joined PE-focused financial consultant Accordion as a managing director. He is a former operating exec with General Atlantic and ex-CFO of Frontier Communications. www.accordion.com

🚑 OrbiMed has promoted Mona Ashiya to partner. She is a former healthcare equity analyst for J.P. Morgan. www.orbimed.com

• Sam Tillinghast is stepping down as co-CEO of THL Credit, with fellow co-head Christopher Flynn to run the group solo. http://axios.link/WNRY

Final Numbers
  • Bitcoin had a wild ride yesterday. First it crossed the $10,000 mark and peaked at an all-time record of $11,377, before tumbling nearly 20% on reports of service outages at some large Bitcoin exchanges. It later stabilized.
Dan Primack