May 3, 2018

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning
Illustration: Lazaro Gamio/Axios

Treasury Secretary Steve Mnuchin is unaware that many U.S. companies are having difficulties finding enough skilled workers to fill open positions, based on comments he made this week at the Milken Global Conference.

You should really watch the video for his facial response to the question, but here's the text exchange:

FBN's Maria Bartiromo: What do you say to managers, and I’m sure you’ve heard it, I’ve heard it a lot, I can’t find the people to put in the jobs I have available. Is that about training?
Mnuchin: I think some of it is training. But I’m not hearing that from the companies I speak to.
Bartiromo: You’re not? Okay, because a number of managers have told me, ‘We need more workers.’ You don’t hear that?
Mnuchin: I don’t. Not at this point.

Reality check from Axios' Future of Work editor Steve LeVine: "Almost anywhere you look, companies of all types report sharp difficulty finding skilled workers. They are turning to measures they have not taken in years — hiring teenagers and convicts, and paying big signing or moving bonuses."

  • Go deeper at Axios, including a reminder that isn't the first time that Mnuchin has expressed an inexplicable blind spot when it comes to labor.

KKR said this morning that it will convert from a publicly-traded partnership to a C-corporation. This follows a similar move from Ares Management earlier this year, and is really a combined byproduct of the tax cuts and an increase in ETFs and other passive public equities funds. We discussed the topic back in February.

SEC Commissioner Hester Peirce isn’t yet “willing to make a blanket statement that everything other than Bitcoin is a security,” she said yesterday at a private conference in Los Angeles. This isn't exactly at odds with what some of her colleagues have said, but it's certainly more nuanced. Kia was in the room, and has more.

  • Telegram has scrapped its planned ICO, after having raised around $1.8 billion via a private sale. The decision seems to be based both on already having raised tons of money, plus concerns over regulatory clarity.
The BFD
Source: Giphy

Xiaomi, a Chinese maker of smartphones and other personal electronics, has filed to go public in Hong Kong with expectations that it will seek to raise at least $10 billion.

  • Why it's the BFD: This would be the world's largest IPO since Alibaba went public in September 2014. It's also a massive win for Hong Kong, which recently relaxed rules to permit dual-class share listings.
  • Bottom line: "Xiaomi also reported financial details for the first time. The company reported a net loss of 43.89 billion yuan ($6.9 billion) last year. Excluding one-time charges, it said its profit was 5.36 billion yuan.Revenue rose 67% to 114.6 billion yuan ($18 billion) last year." — WSJ
Venture Capital Deals

• SoundHound, a Santa Clara, Calif.-based provider of voice-assistant tech to other companies, has raised $100 million in new funding from Tencent, Daimler, Hyundai, Midea Group, and Orange. http://axios.link/uXMC

🚑 Casma Therapeutics, a Cambridge, Mass.-based biotech focused on autophagy, raised $58.5 million in Series A funding from Third Rock Ventures. http://axios.link/2NKf

Soothe, a Las Vegas-based on-demand massage startup, raised $31 million in Series C funding led by The Riverside Company. http://axios.link/Z7uE

🚑 Refuge Biotechnologies, a Menlo Park, Calif.-based developer of “intelligent” CAR-T therapies, raised $25 million in Series B funding. 3SBio and Sequoia China co-led, and were joined by Ocean Pine Healthcare Fund. Refuge's existing investors, 3E Bioventures, WuXi Healthcare Ventures and ShangBay Capital. http://axios.link/Xj79

Neon, a Brazilian digital bank startup, raised $22 million in Series A funding from Propel Venture Partners, Monashees, Quona Capital, Tera, Yellow Ventures and Omidyar Network. http://axios.link/UOFJ

Mandae, a Brazilian parcel logistics startup, raised $7.1 million in Series B funding. IFC led, and was joined by UPS Strategic Enterprise Fund, Mercado Libre Fund, Tekton Ventures, FJ Labs and return backers Performa Investimentos, Qualcomm Ventures, Monashees and Icon Holding Co. www.mandae.com.br

🚑 OnKure, a Boulder, Colo.-based epigenics drug discovery startup, raised $7 million in Series A funding led by Delian Capital. www.onkuretherapeutics.com

iBeat, a San Francisco-based maker of heart-tracking wearables, raised $5.5 million in new seed funding from 8VC, Kairos, City Light Capital, Plug & Play Ventures and ChinaRock Capital Management. www.ibeat.com

Station, a French developer of a workplace web browser, raised $3.25 million in seed funding led by Accel. http://axios.link/38vl

Parallel Domain, a Menlo Park, Calif.-based developer of VR simulations for autonomous vehicle development, raised $2.5 million from Costanoa Ventures and Ubiquity Ventures. http://axios.link/krHx

Private Equity Deals

• Apollo Global Management reportedly has approached Xerox (NYSE: XRX) about a possible acquisition, throwing new doubts on an agreed-upon $6.1 billion takeover of Xerox by Fujifilm (Tokyo: 4901). http://axios.link/uX81

Ardurra-King Engineering, a portfolio company of RTC Partners, has acquired E Co, a Tampa, Fla.-based environmental consulting firm. www.adurragroup.com

Novolex, a Hartsville, S.C.-based packaging manufacturer owned by The Carlyle Group, is in pole position to acquire Waddington Group from Newell Brands (NYSE: NWL) for more than $2 billion, according to Reuters. http://axios.link/uQhd

ParkerGale Capital has acquired Rippe & Kingston, a Cincinnati-based provider of financial and practice management software for law firms. www.legal.rippe.com

Public Offerings

Carbon Black, a Waltham, Mass.-based maker of endpoint security software, upsized its IPO price range from $15-$17 to $17-$19. It still plans to offer 8 million shares, and now would have a fully-diluted market value of $1.5 billion, were it to price in the middle. Carbon Black raised more than $230 million in funding from firms like Accomplice (17% pre-IPO stake), Highland Capital Partners (14.9%), Sequoia Capital (9.9%), Kleiner Perkins (8.8%), .406 Ventures (7.7%) and The Blackstone Group. www.carbonblack.com

🚑 Inspire Medical Systems, a Maple Grove, Minn.-based maker of sleep apnea devices, raised $108 million in its IPO. The company priced 6.75 million shares at $16, compared to plans to offer 5 million at $14-$16. It will trade on the NYSE under ticker INSP, while BofA Merrill Lynch was lead underwriter. It reports $29 million in 2017 revenue, and has raised over $110 million from firms like USVP (16.2% pre-IPO stake), OrbiMed (15.9%), Synergy Life Science Partners (15.7%), Kleiner Perkins (14.5%), Amzak Health Investments (10.3%) and Medtronic (5.7%). www.inspiresleep.com

🚑 Unity Biotechnology, a Brisbane, Calif.-based developer of anti-aging therapeutics, raised $85 million in its IPO. The company priced 5 million shares at $17 (middle of range), for a fully-diluted market value of $786 million. It will trade on the Nasdaq under ticker UBX, while Goldman Sachs was lead underwriter. Unity had raised over $200 million from firms like ARCH Venture Partners (27.5% pre-IPO stake), WuXi PharmaTech (8.9%), Venrock (7.3%), Ballie Gifford (7%), The Mayo Clinic (6.9%), Fidelity, Vullcn Capital, Founders Fund and Bezos Expeditions. www.unitybiotechnology.com

More M&A

Pillarstone, a European debt affiliate of KKR, has acquired Italian packaging firm Manucor via a debt restructuring. http://axios.link/7jsQ

• SoftBank’s talks to acquire a stake in Swiss Re have “stalled,” per Bloomberg. http://axios.link/2IVm

Starwood Capital has agreed to sell 14 British hotels to Fonciere des Regions (Paris: FDR) for around $1.2 billion. http://axios.link/WSkM

Stingray Digital Group (TSC: RAYa) has agreed to acquire Canadian radio broadcaster Newfoundland Capital Corp. (TSX: NCCa) for around C$506 million, or C$14.75 per share (16% premium to Tuesday’s close). http://axios.link/fjb1

Vonovia, a listed German residential property company, has offered to buy Sweden’s Victoria Park (ST: VICPA) for around $1.08 billion. http://axios.link/e4iU

Fundraising

Ares Management is raising $5.55 billion for its fourth Europe-focused direct lending fund, per an SEC filing.

🚑 Foresite Capital raised $668 million for its fourth healthcare-focused VC fund.

Fusion Fund (f.k.a. NewGen Capital) is raising $85 million for its second VC fund, per TechCrunch. http://axios.link/L3W5

W Capital Partners is raising $750 million for its fourth direct secondaries fund, per an SEC filing.

It's Personnel

Richard Branson has agreed to become a partner on a new €500 million-targeted private equity fund being raised by London-based Metric Capital, which will focus on the consumer sector. http://axios.link/QHSC

Sven Lidén, former CEO of Adveq, has joined private equity secondaries firm Montana Capital Partners as COO. http://axios.link/fceY

Matthew Vazquez has joined Advent Capital Management as a VP, per his LinkedIn profile. He previously was with UBS.

Gary Spitz has joined Snow Phipps Group as a managing director of financial operations. He previously was CFO of FiberVisions, Coriant and Kraton Polymers.

Final Numbers: Mega M&A
Dan Primack