Sep 21, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Greetings from the home office, where it's good to be back after 24 hours in New York. Just a reminder to shoot me scoop, feedback and valuable coupons via email (just hit reply), anonymous tip (http://axios.com/tips) or apps like Messenger, Twitter DM, Signal, Confide or Telegram (@danprimack, Dan Primack, 8574723072). Here we go...

Top of the Morning

I spent some time chatting on the sidelines of Bloomberg's Global Business Forum with Cargill chairman and CEO Dave MacLennan, who remains extremely concerned by the White House's views toward trade. Specifically, he can't figure out if rhetoric on issues like NAFTA are a negotiating tactic or a legitimate threat. For context, Forbes lists Cargill as America's largest privately-held company. Some notes:

  • Cargill believes that the dissolution of NAFTA – sans replacement – would result in a 10% haircut to company revenue, which totaled around $110 billion in the most recent fiscal year.
  • MacLennan had his first-ever meeting with Commerce Sec. Ross yesterday, and only has had a phoner with Ag Sec. Perdue. He has still not met or spoken with the U.S. Trade Rep. Lighthizer.
  • He keeps a close eye on Amazon. Not only because of its move into the food space – now competing with major Cargill clients like Costco and Walmart – but also because he could see it moving into areas like freight (Cargill is the world's largest charterer of dry freight).
  • MacLennan says that while Cargill is a major adopter of automation technologies, he believes that the company can be slightly less aggressive because it isn't publicly-traded. "Sometimes I ask at a location why we have people doing a job that maybe seems more efficient and safer to use a machine, and I hear about the importance of creating jobs in that local community, or about the cultural importance of keeping certain people. I'm not sure those arguments would work as well if we had to meet quarterly analyst estimates."
  • He declined to comment on reports that Cargill has interest in buying poultry producer Pilgrim's Pride, but did say that the decision is unlikely to be impacted by that company's recent $1.3 billion purchase of Britain's Moy Park. "Both companies are owned by JBS, so I view it as less of a deal and more of an accounting change."

• Too on the nose? During a break yesterday, with a room full of global leaders waiting on an interview of Turkish president Erdoğan, in-house musicians began playing the Game of Thrones theme song.

• Most surprising sighting: Travis Kalanick. Tallest sighting: Dikembe Mutombo.

• Today in SoftBank: Masa Son was asked on stage by Carlyle's David Rubenstein about his massive losses in the dotcom crash, and noted: "For 3 days I became richer than Bill Gates. Twelve months later I became almost broke." Gates was sitting next to him.

  • Son's rise-fall-rise continues to fascinate me, and not just because of how he managed to grab onto the tail of Alibaba's rocket ship. Marc Andreessen often talks about how most of those who came of biz age after 2001 are too optimistic, while most of those who went through that mess are too risk-adverse. But Masa is the most extreme exception to that latter trend, willing to again buy in big at what many believe to be a pricing peak.

• Solar industry on edge: President Trump may impose tariffs on the solar industry, depending on the outcome of tomorrow's decision by the International Trade Commission as to whether or not U.S. solar manufacturers have been injured by cheap foreign imports. Axios' Amy Harder breaks it down.

• Shanah tovah...

The BFD

Albertsons, the grocery store giant owned by Cerberus Capital Management, has acquired Plated, a New York-based meal-box subscription service that had raised around $90 million in VC funding from firms like Greycroft, ff Venture Capital, Lerer Hippeau Ventures, Great Oaks Venture Capital, Formation 8 and Slow Ventures. No financial terms were disclosed, but The Information reports a price tag of between $175 million and $200 million, with earn-outs that could nearly double the take.

  • Why it's the BFD: Because this could presage new takeover interest in Plated rival Blue Apron, which has stunk up the public markets like a piece of rancid steak. Albertsons getting into meal-box delivery is a much more direct threat to grocers like Kroger than is Amazon's purchase of Whole Foods, given both shopper demographics and the reality that Amazon would still need to figure out sourcing and packaging. Not surprisingly, Blue Apron shares gained in aftermarket trading on the news, and are up again this morning.
  • Bottom line: "Albertsons, owner of the Safeway chain with roughly 2,300 stores, will market the meals to millions of store customers, while Plated also continues its online and television advertising campaigns." — WSJ
Venture Capital Deals

• 10x Future Technologies, a UK-based startup that wants to help large banks manage data and transactions, has raised £34 million in Series A funding from Ping An and Oliver Wyman. The company's founder and CEO if Antony Jenkins, former CEO of Barclays. http://tcrn.ch/2xi2EaE

• Hyliion, a Pittsburgh-based developer and installer of hybrid suspension systems for the trucking industry, has raised $21 million in Series A funding led by Axioma Ventures. www.hyliion.com

• Pilot Fiber, a New York-based provider of fiber Internet services to businesses, has raised $17 million in new funding led by Foundry Group. www.pilotfiber.com

• Ever AI, a San Francisco-based provider of facial recognition solutions for the enterprise, has raised $16 million in Series B funding. Icon Ventures led the round, and was joined by return backers Khosla Ventures and Felicis Ventures. http://axios.link/XgRt

• Manifold, a San Francisco-based startup focused on helping users find, buy and manage developer services, has raised $15 million in Series A funding from OMERS Ventures, Boldstart Ventures, Version One Ventures and Amplify Partners. www.manifold.co

• ThinkCerca, a Chicago-based provider of personalized literacy solutions, has raised $10.1 million in Series B funding co-led by Scott Cook and Signe Ostby. www.thinkcerca.com

🚑 Landros Biopharma, developer of a LANCL2-targeted treatment for inflammatory bowel disease, has raised $10 million from Perceptive Advisors. http://axios.link/IwMW

• ClearMetal, a San Francisco-based provider of AI software for supply chains, has raised $9 million in Series A funding co-led by Prelude Ventures and Innovation Endeavors. http://tcrn.ch/2jKNWWn

• Pymetrics, a New York-based platform for predictive job-matching, has raised $8 million in new Series A funding. JAZZ Venture Partners led the round, and was joined by return backer Khosla Ventures. http://axios.link/YFa2

• Tuition.io, a Santa Monica, Calif.-based employer-funded student loan repayment assistance platform, has raised $7 million in Series B funding. Wildcat Venture Partners led the round, and was joined by return backers Mohr Davidow Ventures and MassMutual Ventures. http://tcrn.ch/2fdptUx

• Pointy, an Ireland-based startup that helps physical retailers display their stock online, has raised $6 million in Series A funding. Frontline Ventures led the round, and was joined by Vulcan Capital and Draper Associates. http://tcrn.ch/2fBrt9S

• DogBuddy, a London-based online marketplace for dig-sitting, has raised €5 million in Series A funding led by existing backer Sweet Capital. http://tcrn.ch/2wAhOuP

• EquitySim, a San Francisco-based platform for financial services hiring, has raised $3.1 million in Series A funding. University Ventures led the round, and was joined by Peak Ventures and 500 FinTech. www.equitysim.com

Private Equity Deals

⛽ Direct 5 Investments has invested in Pathfinder Resources, a newly-formed group that will acquire North American mineral and royalty interests, with an initial focus on the Marcellus and Utica Shale plays in Pennsylvania, Ohio and West Virginia. No financial terms were disclosed. www.pathfinder-resources.com

• H.I.G. Capital has agreed to acquire Vantage Specialty Chemicals, a Chicago-based provider of naturally-derived ingredients for the personal care, industrial, food and consumer industries, from The Jordan Co. (which will retain a minority equity stake). No financial terms were disclosed, although Reuters reported the transaction could be worth around $1 billion. http://reut.rs/2wB78fi

• KKR is planning to bid on Pure Gym, Britain's largest fitness club chain that could be worth more than £600 million, according to Sky News. http://axios.link/7Y8h

• Laguna Tools, an Irvine, California-based CNC machine and woodworking tool company owned by Hudson Ferry Capital, has acquired SuperMax Tools, a maker of sanders for the woodworking and metalworking industries. No financial terms were disclosed. www.lagunatools.com

• System1, a Venice, Calif.-based developer of a "pre-targeting platform for identifying and unlocking consumer intent," has raised $270 million in funding led by Court Square Capital Partners. http://axios.link/iuZP

Public Offerings

• BAWAG PSK, an Austrian bank owned by Cerberus Capital Management, next week will announce whether or not it will launch an IPO process that could value the company at around $6 billion, according to Reuters. http://reut.rs/2fCjmK6

• Best, a Chinese logistics company backed by Alibaba Group, raised $450 million in its IPO. The company priced 45 million American depository shares at $10 per share, compared to earlier plans to sell 62.1 million shares at between $13 and $15 each. It will list on the NYSE under ticker symbol BSTI, while Citigroup was listed as left-lead underwriter. Alibaba held a 23.4% pre-IPO stake, while IDG-Accel China had a 6.2% position.

Oasis Midstream Partners LP, a Houston-based MLP formed by Oasis Petroleum (NYSE: OAS) to own gas and oil assets in the Williston Basin, raised $128 million in its IPO. The company priced 7.5 million shares at $17 per share (below $19-$21 range), and will trade on the NYSE under ticker symbol OMP. Morgan Stanley was listed as left lead underwriter.

More M&A

• Commonwealth Bank of Australia (ASX: CBA) has agreed to sell its life insurance business to AIA Group (HK: 1299) for A$3.05 billion. http://reut.rs/2fcXpAU

• eShares, a Palo Alto, Calif.-based transfer agent for private companies, has acquired the valuation business and team of Silicon Valley Bank for an undisclosed amount. eShares backers include Spark Capital, Industry Ventures, Union Square Ventures, DFJ and Anthemis Group. http://axios.link/6DjC

• Google has agreed to buy part of Taiwanese smartphone maker HTC for $1.1 billion in cash. http://axios.link/rNmh

Kuraray Co. (Tokyo: 3405) has agreed to acquire Calgon Carbon Co. (NYSE: CCC), a Pittsburgh-area activated carbon company, for more than $1.3 billion in cash (including around $200m of assumed debt). The $21.50 per share deal represents nearly a 63% premium on yesterday's closing price. http://reut.rs/2xh2tyT

• SIX Group, the Swedish stock exchange operator, has hired J.P. Morgan to explore options for its payments unit, which could include a sale worth upwards of $2.1 billion, according to Reuters. http://reut.rs/2yfaTU4

Fundraising

• The Carlyle Group is targeting a first close of over $4 billion on its latest Asia buyout fund within the "next couple of months," according to Reuters. The fund's total target is $5 billion. http://reut.rs/2hi6rRh

• Ethos Private Equity of South Africa is raising up to $755 million for its seventh flagship buyout fund, according to Private Equity International. It's also nearing a $150 million final close on its debut mid-market fund. http://axios.link/VHGQ

• Ubiquity Ventures, a Palo Alto, Calif.-based firm led by ex-Bessemer Venture Partners investor Sunil Nagaraj, is raising $35 million for its debut fund, per an SEC filing. Pro Rata reported on the new firm last month.

It's Personnel

• Jens Ernberg and Thomas Hall have joined Capital Dynamics to launch a private credit asset management business. They previously co-founded the mid-market direct lending business at Credit Suisse. www.capitaldynamics.com

• John Lederer, former president and CEO of US Foods, has joined Sycamore Partners as a senior advisor. He also will serve as executive chairman of Staples, which Sycamore acquired earlier this month. www.sycamorepartners.com

• Holly Maloney McConnell has joined General Catalyst as a managing director in the firm's Cambridge, Mass. office. She previously was with Guidepost Growth Equity (f.k.a. North Bridge Growth Equity). www.generalcatalyst.com

• Andrew Robinson has joined Oak HC/FT as an executive-in-residence. He previously was global COO for insurance claims services company Crawford & Company. www.oakhcft.com

• Paul Rogers (CTO of Namely) and Jim Dunham (ex-ServiceSource) have joined Austin, Texas-based Next Coast Ventures as "technology venture partners," while Adam Salamon (ex-COO of Perk) has joined as an entrepreneur-in-residence. www.nextcoastventures.com

• Richard Sem has joined Pantheon as a partner within the investment firm's global infrastructure and real assets group. He previously was managing partner of PCS Capital Partners. Pantheon also added Tatjana Van Vloten (ex-IFM Investments) as a VP and Radhika Patel (ex-Accenture) as an analyst. All three will be based in London. www.pantheon.com

Final Numbers

Dan Primack