Apr 5, 2018

Axios Pro Rata

By Dan Primack
Dan Primack

The next great Axios newsletter launches tonight: Axios World, written by Dave Lawler. Sign up here.

Top of the Morning
Source: NYSE

Spotify stock continues to search for stability, after a rough Wednesday (closing down 3.2% to $149.01 after trading as low as $136.20) and an early spike on Thursday (+5.45% to $152.07 as of this writing).

  • Key number: $132.50. That's the highest price Spotify shares fetched on private secondary exchanges before the direct listing, and any sustained dip below that threshold could cool what has become a booming market for "unicorn" tender trades.
  • Ryan Logue, COO for Nasdaq Private Market, tells Axios that his platform's secondary deal volume for Q4 2017 was up 63% over the year-earlier period, and dollar volume tripled. He adds that the trend continued in Q1.
  • "Before late last year we had never done a billion dollar secondary tender. We've now done three."

Broadcom Blue Hens: Broadcom is now officially a U.S. company, redomiciling from Singapore to Delaware. No, it still isn't allowed to buy Qualcomm — but the move could help expedite other U.S. purchases.

Facebook fly-around: Sara Fischer and David McCabe write that the company's recent media blitz is "creating a highlight reel of privacy and accountability improvements for Zuckerberg to play for lawmakers next week."

Busted: The SEC this week charged entrepreneur Michael Liberty with defrauding investors in Mozido, a mobile payments and marketing startup. In short, the SEC alleges that he pocketed monies meant for the company.

  • Why it matters: This wasn't some private penny stock only preying on unsophisticated retirees. Mozido raised well over $200 million from such high-profile backers as Wellington Management, Mastercard, Eric Schmidt's TomorrowVentures and hedge fund king Julian Robertson. Its board at one time included Randi Zuckerberg, while former top HP exec Todd Bradley briefly served as its CEO.
  • Liberty denies the charges, via his attorney.
  • Go deeper at Forbes, which has been tracking Mozido for more than a year.
The BFD
Source: Giphy

J.M. Smucker Co. (NYSE: SJM) will pay $1.9 billion in cash to acquire Ainsworth Pet Nutrition, a Pennsylvania pet food maker whose brands include Rachel Ray Dog Food, from shareholders like Catterton Partners.

  • Why it's the BFD: Because three makes a trend, and this is the third major U.S. food-maker to buy a pet-related business for the sake of revenue stream diversification (General Mills/Blue Buffalo and Mars/VCA).
  • Bonus: Smucker also confirmed that it is exploring a sale of its bakery business, which includes Pillsbury.
  • Bottom line: "Smucker is coping with a consumer shift away from longstanding supermarket staples, a trend that contributed to a sales decline last year. In this tough environment for human fare, dog and cat food has been a bright spot -- especially as Americans increasingly treat their animals like family members." — Craig Giammona, Bloomberg
Venture Capital Deals

🚑 ITBMed, a Stockholm-based developer of a drug to improve organ transplant outcomes, has raised up to $67 million in new funding led by Pablo Legorreta (CEO of Royalty Pharma). http://axios.link/ThGH

BetterCloud, a New York-based SaaS operations management platform, raised $60 million in Series E funding. Bain Capital Ventures led, and was joined by return backers Accel, Greycroft Partners (through Greycroft Growth), Flybridge Capital Partners, Tribeca Venture Partners and New Amsterdam Growth Capital. www.bettercloud.com

Zlingo, an e-commerce fashion marketplace for Southeast Asia, has raised $54 million in Series C funding. Sofina led, and was joined by return backers Burda, Sequoia India, SIG, Venturra, Beenext and Tim Draper. http://axios.link/v3Mo

🚑 Virta Health, a San Francisco-based digital health startup that wants to "reverse Type 2 diabetes," has raised $45 million in Series B funding. Founders Fund and Playground Global were joined by return backers Venrock, Obvious Ventures, Creandum, Caffeinated Capital and SciFi VC. http://axios.link/jPnS

Suplari, a Seattle-based procurement insights platform, has raised $10.3 million in Series A funding. Shasta Ventures led, and was joined by Two Sigma Ventures, Workday Ventures and return backers Madrona Venture Group and Amplify Partners. www.suplari.com

CoinList, a San Francisco-based platform for connecting accredited investors to blockchain projects, has raised $9.2 million from Polychain Capital, Digital Currency Group, FBG Capital, Libertus Capital, Blockchain Capital and CoinFund. http://axios.link/hJY4

🚲 Yellow, a Brazilian dockless bike-share startup, has raised $9 million in seed funding. http://axios.link/xx3p

ShopShops, a platform that connects brick and mortar stores in the U.S. with consumers in China, has raised $6.1 million in seed funding from Forerunner Ventures, Union Square Ventures, Founder Collective, SV Angel, GGV Capital, Third Kind Venture Capital and XRC Labs. www.shopshops.com.cn

Arkera, a London-based AI platform for wealth managers, has raised £4 million co-led by XTX Markets and Alan Howard. www.arkera.ai

GATE, a New York-based e-wallet acceptance startup, has raised $3.2 million in seed funding led by Orco Investments. www.poweredbygate.com

🚑 Sigilon Therapeutics, a Cambridge, Mass.-based biotech startup backed by Flagship Pioneering, has signed a collaboration agreement with Eli Lilly (NYSE: LLY) to develop encapsulated cell therapies for the potential treatment of Type 1 diabetes. It includes an undisclosed equity investment, $63 million of upfront payments and up to $410 million in earn-outs. http://axios.link/F9kR

Private Equity Deals

Accel-KKR has acquired ITC, a Carrollton, Texas-based provider of website, marketing, rating and management software to the insurance market. www.getitc.com

The Blackstone Group is offering to buy Spanish hotel group Hispania (Madrid: HIS) at an enterprise value of around €1.9 billion. http://axios.link/dVam

Blue Wolf Capital Partners has acquired a majority stake in The State Group, a Canadian multi-trade contracting company. Yellow Point Equity Partners also participated. www.stategroup.com

The Carlyle Group has agreed to buy Australian winemaker Accolade Wines for A$1 billion from Champ Private Equity. http://axios.link/PvuS

Palm Beach Capital has invested in Mears Transportation, an Orlando, Fla.-based private transportation company. www.mearstransportation.com

Race Winning Brand, a Mentor, Ohio-based company of Kinderhook Industries, has acquired Rekluse, a Boise, Idaho-based manufacturer of clutches and clutch products for the powersports market. www.rekluse.com

Ship Supply, a Miami, Fla.-based portfolio company of H.I.G. Capital, has acquired port logistics company Universal Maritime. www.shipsup.com

Stone Point Capital has acquired a majority stake in American Mortgage Consultants, a New York-based provider of outsourced services to the residential and consumer loan mortgage market. www.amcfirst.com

Sunlight Financial, a Teaneck, N.J.-based provider of residential solar system financing solutions, has raised $225 million to fund over 9,000 loans. This includes a $180 million senior finance facility from Global Atlantic Financial Group, while Hudson Clean Energy Partners also participated. www.sunlightfinancial.com

Public Offerings

Vrio, an AT&T-owned provider of digital entertainment services in South America, set its IPO terms to 29.68 million shares at $19-$22. It plans to trade on the NYSE under ticker VRIO, with Goldman Sachs listed as lead underwriter. The company reports $48 million of net income on over $5.5 billion in revenue for 2017.

Liquidity Events

Ardian has hired Natixis to find a buyer for its 25.5% stake in Luxembourg utility Encevo, which could fetch around €300 million, according to Reuters. http://axios.link/iUmV

Bruckmann, Rosser, Sherrill & Co. has hired Harris Williams to find a buyer for Simpson Performance Products, a Texas-based maker of motorsports racing equipment, according to Dow Jones. www.simpsonraceproducts.com

More M&A
Source: YouTube

MoviePass, a unit of Helios & Matheson Analytics (Nasdaq: HMNY), has agreed to buy Moviefone from Oath, a unit of Verizon Communications. No pricing terms of the cash and stock deal were disclosed. http://axios.link/loLL

C&C (Ireland: GCC), maker of Magners cider, has purchased the wholesale arm of Conviviality (LSE: CVRC). http://axios.link/2xJL

Dolce & Gabbana said that it has rejected multiple acquisition offers and its founders have formed a trust to maintain the brand. http://axios.link/leit

⛽ Edison, a listed Italian energy group owned by France’s EDF, is seeking a buyer for its oil and gas unit, which could fetch between $2 billion and $3 billion, per Reuters. http://axios.link/UiL0

HyperBlock Technologies of Toronto has agreed to acquire -based cryptocurrency mining group CryptoGlobal for C$106 million in stock. http://axios.link/A8IO

SS&C Technologies (Nasdaq: SSNC) is considering a rival takeover offer for British trading technology firm Fidessa (LSE: FDSA), which has agreed to be acquired for £1.4 billion by Temenos (Sweiss: TEMN), per the FT. http://axios.link/shaX

Fundraising

Blackbird Ventures of Australia has closed its third fund with A$225 million. http://axios.link/zcfg

Makers Fund, a new VC firm focused on the interactive entertainment sector, has raised $180 million for its debut fund. http://axios.link/DlHp

🚑 Sofinnova Partners has raised its first later-stage healthcare VC fund with €275 million in capital commitments. http://axios.link/Sr0o

It's Personnel

Matthew Cowan (ex- Breezeworks, ex-Bridgescale Partners) and T.J. Rylander (ex-Bowman Capital) have joined Next47, a $1.2 billion venture fund backed by Siemens, as partners. Ching-Yu Hu (co-founder Skybox Imaging, ex-Area 120) has joined as principal. www.next47.com

Rick Gibbs, co-founder of Dealer.com, has joined Silversmith Capital Partners as a senior advisor. www.silversmithcapital.com

Ryan Levitt has joined Drum Capital Management as a managing director, per his LinkedIn page. He previously was a partner with Pomona Capital. www.drumcapital.com

Final Numbers
Expand chart
Data: Department of Agriculture; Chart: Chris Canipe/Axios

Breaking: The U.S. trade deficit climbed 1.6% to $57.6 billion in February, based on new data from the U.S. Commerce Department. That's the highest dollar figure since October 2008, and 24% higher than February 2017.

Go deeper on the political impact of Chinese tariff retaliation, via Axios' Erica Pandey:

"In 2017, soybeans comprised 12% of U.S. exports to China, and American farmers ramped up production of soybeans in part because the Chinese were buying in such massive quantities. Now, that source of revenue is in jeopardy."
Dan Primack