Jan 30, 2017

Axios Pro Rata

Good Monday morning, after one of the longest two-day weekends in recent memory. As always, please share your thoughts and tips by sending me an email at dan@axios.com. Let's get to it.

Top of the Morning

Uber has done a lot of questionable things over the years, but its actions this past weekend vis-a-vis Trump's immigration ban weren't among them. An actual timeline from Saturday, which may differ from what you saw trending on social media:

  • 4:20pm ET: CEO Travis Kalanick sent email to employees. It stopped short of explicitly opposing the ban, but did say: (1) The company would identify and compensate affected drivers. (2) Kalanick will raise the issue of how the "ban will impact many innocent people" this Friday during the first meeting of Trump's so-called CEO Council. This email was posted a short time later to Kalanick's public Facebook page.
  • 4:55pm ET: NY Taxi Workers union called for a work stoppage at JFK airport from 6pm-7pm. Uber does not suspend its own service, but also does not send out any promotions.
  • 7:36pm ET: Uber NYC sends out a tweet, saying that surge pricing to and from JFK has been turned off.

The claim that Uber was trying to "break the strike" by sending out its surge pricing tweet is belied by the timing (i.e., sent after the strike was set to end). And while it is true that Kalanick has agreed to be on Trump's CEO council, it's also true that execs from both Uber and Lyft have agreed to sit on a new automation council set up by Trump's Department of Transportation. Either a pox on both their houses, or a pox on none.

I reached out to Uber PR on Saturday night for a preliminary number of affected drivers, but it has not yet replied. No matter the ultimate number, it's the right thing to do. Kudos, not condemnation.

• Profiles in courage: I have reached out to a dozen of the country's largest private equity firms to ask two questions: (1) How many of your staffers and portfolio company employees are affected by the ban; (2) Do you have any broader comment on the executive order? Three official "no comments" ― from The Blackstone Group, The Carlyle Group and TPG Capital. The rest either haven't replied or have said that they need more time. We'll see if this becomes a topic during today's Monday meetings.

Oh, and before you tell me that this is a tech issue because it's the industry that pledges to "change the world," please note that Goldman Sachs has already taken a public stand against the ban.

• Next up: The Trump Administration is planning major changes to H1-B visa rules. Per Mike Allen: "Short of shutting down the visas, Trump could administratively strangle the program or work with Congress to significantly slash it, immigration experts told Axios."

• Seriously and literally: Peter Thiel was wrong

• Still not a VC fund: SoftBank has quietly registered its $100 billion-targeted "Vision Fund" with the SEC, which means we've learned a bit more information. Full run-down here, but threer quick notes:

  1. It's a "private equity" fund, with both management fees and carried interest. Typical equity investments of $100 million or more.
  2. No management fee offsets for the expected use of operating partners.
  3. No first close reflected on the docs, and word is that it's been pushed into February.

• SALT-y: Bloomberg reported on Friday that incoming White House staffer Anthony Scaramucci got an above-market price for hedge fund-of-funds Skybridge Capital, which was purchased by Chinese conglomerate HNA Group and a lesser-known group called RON Transatlantic EG (many of which's underlying investors are unknown, which isn't nearly as surprising as Bloomberg seems to think it is). The deal came in at $180 million (7.2X EBITDA), or closer to $230 million with earnouts (which "The Mooch" doesn't get a cut of). Obviously it was a strange process. Scaramucci was a very motivated seller, which was perhaps offset by having inflated Skybridge's brand beyond its actual weight (thanks to the giant Vegas conference, his TV spots, Trump affiliation, etc.). A source close to Scaramucci says that he received two bids higher than the one led by HNA, but that only HNA promised to not lay off Skybridge staffers.

• Where in the World? I'll be in Los Angeles later this week for the Upfront Summit, and then briefly in San Francisco on Friday morning for some meetings. And I'm booked both ways on Delta with connections, so...


McDonald's (NYSE: MCD) has agreed to sell its Nordic restaurant business to Guy Hands, founder and chairman of Terra Firma Capital Partners.

Why it's the BFD: This is Hands doing the deal personally, not via Terra Firma. Expect this to raise all sorts of questions when the private equity firm returns to market for a new fund (which Hands previously said it will do).

Bottom line: "McDonald's said that Mr. Hands will become its so-called development licensee for Norway, Finland, Denmark and Sweden, overseeing the franchise network. Mr. Hands will provide capital to expand the business, which has about 435 restaurants in the region." -- WSJ

Venture Capital Deals

• The Bouqs Co., a Venice Beach, Calif.-based online flower retailer, has raised $24 million in Series C funding led by Partech Ventures. www.bouqs.com

• Mindspace, an Israel-based co-working space operator, has raised $15 million in Series A funding from unidentified investors. http://bit.ly/2kJpd0p

• Reviver, a San Francisco-based digital license plate maker, has raised $6.8 million in Series A funding co-led by WRV and Australia's ACK Group. http://bit.ly/2kIli88

• UberCloud, a Los Altos, Calif.-based provider of cloud simulation solutions for engineers and scientists, has raised $1.7 million in seed funding led by Earlybird Venture Capital. www.theubercloud.com

Private Equity Deals

• Bridgepoint has agreed to acquire Zenith, a British vehicle leasing company, from HgCapital for approximately £750 million. http://reut.rs/2kiLcyF

• CH2M, an Englewood, Colo.-based portfolio company of Apollo Global Management, is considering a takeover offer for WS Atkins (LSE: ATK), a UK engineering and design firm with a current market cap of around £1.3 billion, according to The Times of London. http://bit.ly/2kidcSu

• DH Corp. (TSX: DH), a Canadian fintech services company valued at more than C$4.4 billion (including debt), has drawn takeover interest from several parties, according to Reuters. Suitors include Canada Pension Plan Investment Board, Cerberus Capital Management, TPG Capital and Thoma Bravo. Credit Suisse and RBC are managing the process. http://reut.rs/2jkEmJe

• Dunes Point Capital has acquired Power Distribution, a Richmond, Va.-based maker of power distribution, static switching and power monitoring equipment for corporate data centers, from Smiths Group (LSE: SMIN). No financial terms were disclosed. http://reut.rs/2k8FrkE

• Genoptix, a Novartis company focused on oncology diagnostics and informatics, has agreed to sell its clinical lab to an investor group that includes Ampersand Capital Partners and 1315 Capital. No financial terms were disclosed. www.1315capital.com

• Harvest Partners has acquired a minority ownership stake in GPM Investments, a Richmond, Va.-based convenience store operator, for $62.5 million. www.gpminvestments.com

• Harris Corp. (NYSE: HRS) has agreed to sell its IT services business to Veritas Capital for $690 million in cash. http://bit.ly/2jktzyQ

• HGGC has agreed to acquire Davies Group, a UK-based insurance claims servicer, from Epiris (f.k.a. Electra Partners) for £90 million. http://bit.ly/2jm2prm

• JW Capital has acquired Eco Flower, and Ogden, Utah-based sustainable floral bouquet company. No financial terms were disclosed. http://bit.ly/2kIqHfk

• Mallinckrodt PLC (NYSE: MNK) completed the previously-announced $690 million sale of its Nuclear Imaging business to IBA Molecular, a Dulles, Va.-based portfolio company of CapVest.

• PAR Excellence Systems, a Cincinnati-based provider of supply chain management systems for the healthcare industry, has raised an undisclosed amount of private equity funding from Northlane Capital Partners. www.northlanecapital.com

• Pelican Energy Partners has sponsored a majority recap of Global Heat Transfer, a manufacturer and repairer of radiators and other equipment for the oil and gas, mining and power generation markets. www.globalheattransfer.com

• Symphony Technology Group has acquired Fishbowl, an Alexandria, Va.-based customer engagement platform provider for the restaurant industry. No financial terms were disclosed. www.fishbowl.com

• Thoma Bravo has completed its previously-announced acquisition of Planview, an Austin, Texas-based provider of work and resource management software, from Insight Venture Partners (which will retain a minority stake). No financial terms were disclosed. http://bit.ly/2k7RJIW

Public Offerings

• Seven companies are expected to price IPOs on U.S. exchanges this week, including Blackstone-based landlord Invitation Homes. http://bit.ly/2jJ1cr2

More M&A

• Allianz of Germany has made an informal takeover approach to Australia's QBE Insurance (ASX: QBE), according to Reuters. QBE has a current market cap north of A$16.9 billion. QBE, however, denies that it is considering a sale. http://ab.co/2juIQIu

• Clealco Açúcar e Alcool SA, a Brazilian sugar company, is in talks to renegotiate around $473 million in bank debt, while shareholders are "considering resuming a process to look for a buyer," according to Reuters. http://reut.rs/2kDs8bP

• Contemporary Amperex Technology of China has acquired a 22% stake Valmet Automotive, a Finnish auto parts supplier whose shareholders include Pontos and Finnish Industry Investment. No financial terms were disclosed. http://reut.rs/2kFokH7

• Frontline (NYSE: FRO) has offered to acquire Bermuda-based crude oil tanker company DHT (NYSE: DHT) in an all-stock deal that would value DHT's total equity at around $475 million. Frontline already holds a 16.4% stake in DHT. http://on.ft.com/2kJV459

• Recology, a San Francisco-based waste management and recycling company, has agreed to acquire Santa Rosa, Calif.-based rival Ratto in a "multimillion dollar deal." http://bit.ly/2kiKCRK

• Saputo (TSX: SAP), a Canadian dairy company, has offered to buy the 12% stake it doesn't already own in Australia's Warrnambool Cheese and Butter at a total enterprise value of A$682 million. http://ab.co/2kJZtVJ

• Sony has agreed to sell around 14% of its stake in M3 Inc. (Tokyo: 2413), a Japan-based online medical information provider, to Goldman Sachs Japan. http://bit.ly/2kL4z03

• Vodafone (LSE: VOD) disclosed that it is in talks to merge with Aditya Birla Group, a move that would create India's largest telecom company. http://tcrn.ch/2kiz14D


• Abraaj Group of Dubai plans to target upwards of $8 billion for its next flagship buyout fund, according to Bloomberg. http://bloom.bg/2kGkeln

• Black Toro Capital, a Spanish mid-market private equity firm, has secured around $220 million of its $450 million-targeted second fund, per an SEC filing. http://bit.ly/2juPVZK

• Nyca Partners, a fintech-focused VC firm founded in 2014 by former Visa president Hans Morris, has closed its second fund with more than $125 million in capital commitments. www.nycapartners.com

It's Personnel

• Ravdeep Chanana (ex-GE) has joined Gemspring Capital as a vice president of investments. www.gemspring.com

• Warren Cooper has joined Healthcare Royalty Partners as a managing director and chief medical officer. He is the former CEO of Prism Pharmaceuticals (acquired by Baxter in 2011). HRP also promoted John Urquhart to principal and Anthony Rapsomanikis to vice president. http://bit.ly/2kJnp7O

• Wendy Neal Ferrara has joined BMO Harris Bank as business development director for the Ohio market. She previously was VP of marketing for Brown Gibbons Lang & Co.

• The Jordan Co. has promoted Douglas Zych to head of capital markets.

• Tracey McDermott, former acting head of the UK's Financial Conduct Authority, has joined Standard Chartered as head of corporate, public and regulatory affairs.

• Brian Walsh, co-founder and former CEO of Vital Herd, has joined Konica Minolta's Business Innovation Center n Silicon Valley as its "new ventures lead."

Final Numbers: Red vs. Blue VC in 2016