Jun 26, 2019

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

Photo by Saul Loeb / AFP/Getty Images

Silicon Valley is notably absent from the Trump Administration, after having enjoyed an open-door (or sock on the door?) policy during the Obama Administration.

  • Situational awareness: Trump this morning told Fox Business News: "We should be suing Google and Facebook and perhaps we will," related to alleged political bias, sending both companies' shares tumbling.

But at least one top tech executive was, at least briefly, considered for a Cabinet position, according to the leaked trove of vetting documents recently obtained by Axios.

It was Emil Michael, at the time Uber's chief business officer who was out of the job just months later.

  • He appears to have been in the running for Secretary of Transportation, a job that eventually went to Elaine Chao.
  • There's no indication that Michael was aware of the vetting, which Axios' Jonathan Swan reports was little more than Google and Lexis Nexis searches conducted by junior RNC staffers (after the Chris Christie-led transition process was canned). And he wouldn't be alone, as I'm told that fellow vettee Ari Emmanuel was in the dark.
  • The document itself, shown here for the first time (with sensitive personal info removed), focuses heavily on Michael's onetime musing that Uber should hire opposition researchers to dig into the personal lives of the company's media critics.
    • But it is silent on any transportation (or labor) policy issues related to ride-hail, or any of Uber's other contemporaneous controversies. Instead, it's much more concerned with Michael's donations to candidates from both political parties (even though he was a registered Republican).

Michael declined comment via a spokesman.

The bottom line: Michael was obviously a long-shot, and came with enough Uber baggage that it might not have lasted long. But, as Transport Sec, he couldn't have achieved less of an infrastructure deal than has Chao.

No love lost: Warren Buffett yesterday reaffirmed his affinity for Brazilian private equity firm 3G Capital and its co-founder Jorge Paulo Lemann, even as the pair's massive bet on Kraft Heinz continues to pickle. He tells CNBC that he plans to attend Lemann’s 80th birthday party later this summer, and that he supports 3G's pick of Miguel Patricio to become Kraft Heinz's new CEO.

  • Buffett previously acknowledged having overpaid for Kraft Heinz, but has never publicly related it to his rhetorical broadsides against private equity.
  • Berkshire Hathaway Charlie Munger said during May's annual shareholder meeting: “What I think is interesting about the 3G situation, it was a long series of transactions that worked very well, and finally there was one transaction at the end that didn’t work so well."
The BFD
Source: Giphy

Coty (NYSE: COTY) is in talks to buy a majority stake in Kylie Cosmetics from Kylie Jenner for at least $600 million, according to Women's Wear Daily.

  • Why it's the BFD: Because the recent controversy over whether or not Kylie Jenner is a "self-made" billionaire obfuscates the fact that she quickly built a beauty products powerhouse that could soon live under the same corporate umbrella as CoverGirl and Sally Hansen.
  • Bottom line: "Kylie Cosmetics made a splash when it first launched with lip kits in 2015... In the first 18 months, it did $420 million in sales. Since then growth has slowed, sources said, which prompted the brand to enter Ulta Beauty." — WWD
Venture Capital Deals

Carbon, a Redwood City, Calif.-based digital manufacturing platform, raised $260 million in Series E funding at a $2.4 billion valuation. Madrone Capital Partners and Ballie Gifford co-led, and were joined by Temasek, Arkema and return backers Sequoia Capital, Johnson & Johnson, Fidelity, Adidas and JSR Corp. http://axios.link/emBV

StockX, a Detroit-based online marketplace for shoes and accessories, raised $110 million in Series C funding from DST Global, General Atlantic and GGV Capital. It also named former eBay and NYSE exec Scott Cutler as its new CEO.

MX, a Lehi, Utah-based data analytics platform for financial institutions, raised $100 million in Series B funding. Battery Ventures led, and was joined by H.I.G. Capital, Point72 Ventures, Sorenson Ventures, Pelion Venture Partners, Cross Creek Capital and return backers Industry Ventures, Digital Garage, TTV Capital and Commerce Ventures. http://axios.link/MHH7

🚑 Frontier Medicines, a South San Francisco-based chemoproteomics startup, raised $67 million in Series A funding from Deerfield Management, Droia Oncology Ventures, MPM Capital, DCVC and RA Capital Management. http://axios.link/QASr

Budderfly, a Shelton, Conn.-based provider of energy management software, raised $55 million in equity and debt funding from Balance Point Capital and Connecticut Innovations. http://axios.link/Lokk

Uncademy, a Bangalore-based online competitive exam prep platform, raised $50 million in Series D funding from Steadview Capital, Sequoia India, Nexus Venture Partners and Blume Ventures. http://axios.link/YNBG

Cobalt Robotics, a San Mateo, Calif.-based maker of physical security robots, raised $35 million in Series B funding led by Coatue. http://axios.link/kWtJ

Software Motor Co., a Sunnyvale, Calif.-based maker of electric motor systems, raised $31.4 million from JLL Spark and Meson Capital. http://axios.link/egKQ

Ocrolus, a New York-based provider of financial document analysis automation for lenders, raised $24 million in Series B funding. Oak HC/FT led, and was joined by Bullpen Capital and QED Investors. http://axios.link/cDbk

Chief, a New York-based private business network for women, raised $22 million in Series A funding co-led by General Catalyst and Inspired Capital. http://axios.link/DYIH

Kopi Kenangan, an Indonesian coffee shop chain, raised $20 million from Sequoia Capital. http://axios.link/Y7Q5

🚑 InterVene, a South San Francisco-based developer of a vein valve renovator, raised $15 million in Series B funding. 3x5 Partners led, and was joined by return backers Boston Scientific, RiverVest Venture Partners and Correlation Ventures. http://axios.link/4Kn2

Orderful, a San Francisco-based provider of supply chain management software, raised $10 million in Series A funding from Andreessen Horowitz. http://axios.link/guNW

ReviewTrackers, a Chicago-based business reputation management startup, raised $10 million from PeakSpan Capital. http://axios.link/GmRa

Squire, a San Francisco-based provider of small business management software for the men’s grooming market, raised $8 million in Series A funding led by Trinity Ventures. http://axios.link/Ty46

Lulalend, a South African online lender for SMEs, raised $6.5 million in Series A funding co-led by IFC and Quona Capital. http://axios.link/1taA

Car IQ, a San Francisco-based vehicle payment startup, raised $5 million in Series A funding. Quest Venture Partners led, and was joined by Avanta Ventures, Citi Ventures, Alpana Ventures, Plug and Play and AVG’s Spike Ventures. www.cariq.xyz

Join, a construction planning software startup, raised $4 million in seed funding from SignalFire, Building Ventures and Bolt. http://axios.link/nlY1

Homeroom, a San Francisco-based software platform for afterschool programs, raised $3.5 million led by Forerunner Ventures. http://axios.link/fNC4

Private Equity Deals

Addel Group, a Sunnyvale, Texas-based portfolio company of Kinderhook Industries, acquired Powerflow, a Buffalo, N.Y.-based provider of injection-molded plastic accessories for auto manufacturers and dealers. www.powerflowinc.com

Bromford Industries, a portfolio company of Liberty Hall Capital Partners, acquired Accrofab, a UK-based maker of fabricated and machined engine bracketry for the aerospace industry. www.bromfordindustries.co.uk

🚑 Cortec Group acquired Aspen Medical Products, an Irvine, Calif.-based maker of spinal orthopedic braces. www.aspenmp.com

Crane 1 Services, a Franklin, Ohio-based portfolio company of Pfingsten, acquired Materials Handling Solutions, Duncan, S.C.-based provider of overhead crane services and equipment. www.crane1services.com

Forterro, an Austin, Texas-based portfolio company of Battery Ventures, agreed to buy Abas Software, a German enterprise resource planning software vendor. www.forterro.com

J.C. Flowers and Mediobanca are among the suitors for Kairos Investment
Management, which is being sold by Julius Baer Group (Swiss: BAER) for around €200 million, per Bloomberg.

Littlejohn & Co. agreed to buy the industrial distribution unit of Kaman (NYSE: KAMN) for $700 million. www.kaman.com

TDR Capital offered to buy UK-based car auctioneer BCA Marketplace (LSE: BCA) for around $2.42 billion. http://axios.link/MuwN

🚑 Thomas H. Lee Partners acquired Nextech Systems, a Tampa, Fla.-based provider of tech solutions for specialty physician practices, from Francisco Partners.

Public Offerings

Blue Racer Midstream, a Dallas-based natural gas pipeline owner backed by First Reserve and Caiman Energy II, is prepping an IPO that could value the company at $2.5 billion, per Bloomberg. http://axios.link/WZ5B

Cambium Networks, a Rolling Meadows, Ill.-based wireless broadband networking infrastructure provider owned by Vector Capital, raised $70 million in its IPO. The company priced 5.8 million shares at $12 (below $13-$15 range), and will trade on the Nasdaq (CMBM) with J.P. Morgan as lead underwriter. It reported a $1.5 million net loss on $242 million in revenue for 2018.

Walmart (NYSE: WMT) plans to relist Japanese supermarket chain Seiyu, after failing to find a buyer. http://axios.link/vNCt

Liquidity Events

Apple (Nasdaq: AAPL) confirmed to Axios that it acquired self-driving tech startup Drive.ai. No financial terms were disclosed, but we previously reported that the price would be less than the $77 million invested by venture capitalists. http://axios.link/Dpvq

EQT Partners is considering a sale of British rail transport company GB Railfreight, per Bloomberg. http://axios.link/XXgX

WeWork agreed to buy Waltz, a New York-based building access and security management startup that had been backed by such firms as New Ground Ventures, Argonautic Ventures and New Europe Ventures. http://axios.link/RGKk

Woodford Investment Management plans to hire PJT Partners to find a buyer for its stakes in private companies Atom Bank and Oxford Nanopore, per Sky News. http://axios.link/paZh

More M&A

Abu Dhabi Financial Group and Shuaa Capital agreed to merge into a combined company with $12.8 billion in AUM. http://axios.link/6M7k

Bombardier (TSX: BBD) agreed to sell its regional jet unit to Mitsubishi Heavy Industries (Tokyo: 7011) for $550 million in cash. http://axios.link/uUIF

Condé Nast agreed to sell bi-monthly fashion magazine W to Future Media. http://axios.link/iVfV

Extreme Networks (Nasdaq: EXTR) agreed to buy cloud management and edge networking company Aerohive (NYSE: HIVE) for $210 million in cash, or $4.45 per share (39.5% premium over yesterday’s closing price). www.aerohive.com

Magellan Midstream Partners (NYSE: MMP) may seek to sell a 35% stake in its Longhorn crude oil pipeline in Texas for upwards of $2 billion, per Reuters. http://axios.link/3LSb

Randa Duncan Williams, chair of Enterprise Products Partners (NYSE: EPD), agreed to buy magazine Texas Monthly. http://axios.link/HY9I

Visa (NYSE: V) will pay $75 million in cash to buy the token and electronic ticketing business of Rambus (Nasdaq: RMBS). http://axios.link/zw8N

Fundraising

Arlington Capital Partners, a Maryland-based private equity firm, raised $1.7 billion for its fifth fund. www.arlingtoncap.com

Clearlake Capital raised $1.4 billion for its second “opportunities” fund, which will make non-control investments. www.clearlake.com

It's Personnel

Jérôme Nommé is leaving Sun Capital Partners to join KKR as head of France, effective September 1. www.kkr.com

Encore Consumer Capital promoted Kate Wallman to director. www.encoreconsumercapital.com

Greycroft promoted Teddy Citrin to principal. www.greycroft.com

Final Numbers
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Data: 2019 EY M&A Firepower report and Axios reporting; Chart: Axios Visuals
Dan Primack

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