Top of the Morning
Toutiao, a Chinese personalized news app, has agreed to acquire lip-sync app Musical.ly. No financial terms were disclosed, but word is the price-tag was between $800 million and $1 billion, via a mixture of cash and stock.
- Why it's the BFD: Beyond the fact that a VC-backed company is paying unicorn prices for another VC-backed company that has a demographic shelf life? Okay, how about because this deal was actually competitive, and helps Toutiao play offense against the Chinese tech trinity — Alibaba, Baidu and Tencent — that is trying to eat into its core business.
- Cap tables: Music.ly had raised around $116 million from GGV Capital, Qiming Venture Partners, Greylock and DCM Ventures. The most recent round, in May 2016, put the post-money valuation at around $500 million. On the buy-side, Toutiao reportedly is raising new funding at around $20 billion valuation. Existing backers include Sequoia Capital China and CCB International.
- Bottom line: "Think of [Music.ly] as a mixture of Vine, Snapchat, and Dubsmash — users, or "musers" as they're called, can record 15-second music videos of their favorite songs, and share them in a totally new social space. When editing, musers can play with the speed of the video, add filters, and elect to play the video backwards." — Kate Dwyer, Teen Vogue
Venture Capital Deals
Private Equity Deals
• The Blackstone Group has agreed to buy Chinese cosmetics packaging company ShyaHsin Packaging for between $800 million and $900 million, according to Reuters. http://axios.link/Xj0A
• Elite SEM, a New York-based digital marketing agency owned by Mountaingate Capital, has acquired Boston-based social advertising agency OrionCKB. http://axios.link/lCjZ
• Eurazeo and Primavera Capital Group have agreed to invest in WorldStrides, a Charlottesville, Va.-based student travel company. http://axios.link/2Vfb
• Blue Sea Capital has acquired RESA Power, a Houston-based provider of electrical life extension products and services, from Audax Private Equity. www.resapower.com
• Standard Chartered Private Equity has made a non-binding offer to buy shares in Singapore-based crane supplier Tat Hong Holdings (SI: TAT), at a 9% premium to Thursday's closing share price. http://axios.link/qpGj
• Silver Lake and LinkedIn are investing a combined $300 million into talent management software company Cornerstone OnDemand (Nasdaq: CSOD), via convertible notes that have a $42 per share conversion price (compared to $37.60 closing price on Wednesday). http://axios.link/9l19
• Shandong Ruyi International Fashion of China has agreed to acquire over a 51% equity stake in menswear company Trinity Ltd. (HK: 0891) for around $285 million. http://axios.link/IyBl
• SIX Group, the Swiss stock exchange operator, says that it would listen to offers for a majority stake in its card payments unit, which could be worth upwards of $2 billion. http://axios.link/FbwO
• John Bernstein is stepping down as co-head of General Atlantic's operations for EMEA, but will remain with the private equity firm, according to Private Equity News. http://axios.link/rnNb
• Winnie Wutte has left KKR, where she was a member of the firm's European fundraising team (which is gearing up for a new effort), according to Private Equity News. She had been with KKR since 2008. http://axios.link/bI9S
QE2Much? No, you're not reading that wrong. The size of Bank of Japan's assets under management is fast approaching Japan's GDP, as BoJ has spent more than a year buying up government debt (primarily to meet a 2% inflation target).
We don't yet have Q3 GDP numbers, but BoJ assets continued to grow between July and September — causing local economists to worry about what happens when long-term interest rates eventually begin to rise, lowering the value of the central bank's holdings but spiking its interest rate payments.