Axios Pro Rata
January 17, 2018
Top of the Morning
This is the first month in more than 25 years that John Chambers isn't heading into work at Cisco. Instead, the tech giant's former CEO and executive chairman is refashioning himself as fulltime a venture capitalist.
Chambers just launched JC2 Ventures, which he says is as much about CEO mentoring as it is about investment. The self-funded firm, which also includes son John (ex-marketing exec at Houzz, Netflix & Walmart), already has backed such companies as Airware, Aspire Food Group and Sprinklr.
Some quotes from Chambers, per a conversation yesterday:
- “This is the next chapter in my career… It makes me tremendously excited. And I’m also more relaxed because I can sleep through the night without getting a text about a customer problem or personnel problem or something else at Cisco.”
- “I don’t think large global companies will add headcount over the next decade, so the question for all countries has to be about how to kickstart the startup engine. Governments need to champion startups as the future, like we’ve seen in France and India… We [in the U.S.] shouldn’t feel any entitlement.”
- “It’s interesting to watch and work with CEOs. With very few exceptions, an engineering lead as CEO doesn’t understand sales or go-to-market. Same thing when you have a business leader; he doesn’t know how to judge incoming engineers. And most of them don’t initially understand how important culture is.”
- “I think there are going to be many creative ways of raising funding, and ICOs speak to how the NASDAQ and NYSE will have to evolve.”
• Gift receipt: Silver Lake yesterday agreed to lead a $3.5 billion take-private acquisition of gift card "mall" operator Blackhawk Network.
- We've learned that this wasn't Silver Lake's first takeover attempt for the onetime Safeway subsidiary. Here's the backstory.
- Blackhawk puts year-to-date U.S. tech M&A at nearly $9.5 billion for 96 transactions, per S&P Global Market Intelligence. That's the strongest start to a year since 2008 in terms of dollars, but its weakest since 2009 in terms of number of deals.
• LP land: Harvard University's endowment does not plan to name a new head of private equity investing, despite Rich Hall's pending return to Texas.
- Harvard Management Co. has instead restructured in a way that eschews asset class bosses, in favor of a group of managing directors who share responsibility for the entire portfolio. HMC managing directors with private equity experience include both John Shue and Mindy Barber.
• DC-to-SV deal scoop: The Messina Group, the political consultancy led by former Obama campaign manager Jim Messina, has acquired Greenbrier, a Silicon Valley crisis communications and PR firm led by former Uber and Clinton comms pros Matt McKenna and Lane Kasselman.
• Tax talk: The House GOP's proposed continuing resolution to prevent government shutdown on Friday includes a two-year delay on the medical device excise tax that went back into effect on January 1.
• VCtv: Years ago I filmed a cameo in a music video produced by venture capital firm Foundry Group. And, yes, it was as sublimely silly as that prior sentence suggests — but received hundreds of thousands of views before Foundry accidentally erased the counter (which apparently is an unrecoverable blunder).
Foundry, whose partner Jason Mendelson has a full music studio in his basement, came out with a successor video three years later (I wasn't invited back) and now is out with its latest (wow, I really must have blown my big break). It's about "bored meetings," and you can view it here.
The BFD
Celgene (Nasdaq: CELG) is in talks to acquire Juno Therapeutics (Nasdaq: JUNO), a Seattle-based developer of cancer therapeutics, according to The Wall Street Journal. Juno had a market cap of $5.2 billion prior to the report, but shares jumped more than 50% in after-hours trading.
- Why it's the BFD: Because Celgene, with $82 billion in market cap and nearly $12 billion in cash, is on a big buying spree in the cancer space. Just last week it agreed to buy Impact BioMed for upwards of $7 billion.
- Bottom line: "Celgene, which already had a relationship with Juno, wants to own a piece of CAR-T treatments, which use a person's own immune cells to fight off cancer and are expensive. Celgene also appears to be prepping itself for 2027, when its blockbuster blood cancer drug Revlimid loses U.S. patent protection." — Bob Herman, Axios
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Final Numbers
More from KKR's 2018 Global Macro Outlook:
Irrespective of where we are in the cycle, we believe that – compliments of central bank intervention – the current prices of many financial assets appear more cyclically elevated than current economic conditions might otherwise support. Indeed, the S&P 500 has been up for nine consecutive years, despite a U.S. economic recovery that has been lackluster by most standards. This performance feat by the U.S. equity market is quite extraordinary, as it has occurred only one other time on record – the 1991-1999 period.
Axios Pro Rata
Dan Primack’s briefing on VC, PE & M&A for dealmakers.