Another Day, Another Megamerger
At this pace the Fortune 500 will be down to around 20 companies by the end of the year. CenturyLink has agreed to acquire Level3 Communications in a deal valued at $34 billion in cash and stock, including debt. This is a two “mehs” don’t make a right situation: Both companies are expected to see revenue decline in over the coming years. On the plus side, both companies have been active acquirers, meaning they have some experience in making deal integrations work, and both have invested in new, faster-growing lines of business, namely, business-to-business fiber networks.
• Thiel Talks: At 11 a.m. Eastern, a big chunk of the of the tech, political, media, and finance press will have their eyes fixed on this livestream, where Peter Thiel will take questions about his support of Donald Trump. Interesting that he decided to hold this event in D.C. and not San Francisco, where startup founders are so offended by his support of Trump that they’re publicly declaring they will never take money from his firm, or in New York, where members of the press are appalled at the free speech precedent set by his revenge lawsuit against Gawker.
Over the weekend, Thiel discussed his support of Trump for the first time in the press since he donated $1.25 million to the campaign in the wake of Trump’s myriad sexual assault accusations. In the understatement of the year, he said he “did not appreciate quite how polarizing the election would be.” He noted that he is overlooking Trump’s “personal characteristics” and accused Silicon Valley of fencing themselves off from the rest of the country.
Separately, he and David Sacks (a fellow member of the PayPal mafia and current CEO of insurance unicorn Zenefits) had to apologize for their 1996 book “The Diversity Myth,” which, among many strong views, downplays date rape as “belated regret.”
In other words, the press will have a buffet of horrors to grill Thiel on. Given the venue, I don’t expect terribly nuanced questions that apply to this audience. (For example, whether his support of Trump is hurting Founders Fund deal flow, or whether any Y Combinator or Founders Fund companies have returned their investment money on principle.)
Wall Street types may be confused by the Valley’s outrage over Thiel. He’s entitled to support whatever political candidate he wants, much less a major party nominee! But remember, Silicon Valley is supposed to be a capitalist utopia built on hippie ideals. It’s meant to be the land of true meritocracy, where anyone can become a billionaire based on their creativity and willingness to hustle. In recent years, we’ve learned it’s not that -- not even close -- and there are many smart, ambitious, hopeful people trying to make the Valley a more inclusive place. Thiel’s support for a candidate that spews hate messes up that progress. Even Thiel, who chooses to overlook those parts, would agree with that.
• Unicorn Overload: If you, like many, hate the cutesy term “unicorn” to describe Silicon Valley’s magical money-losers, you are in luck. In researching my upcoming magazine column, I learned that there’s a Web browser plug-in called Unicorn Replacer that automatically changes the word “unicorn” to “pre-IPO startup valued at $1 billion or more.” I guess the term isn’t as unpopular as one might think: So far only 267 people have installed it on Chrome.
• Speaking of pre-IPO startups valued at $1 billion or more: There’s a new one today. Ministry Brands, a seller of software to churches and private schools, raised a new round of funding from Insight Venture Partners. The company already had backing from Genstar Capital and Providence Equity Partners, the latter of which will exit its investment as part of Insight’s investment. No deal terms were disclosed, but WSJ reports two important details: One, Ministry had tried to sell itself earlier this year. And two, this investment pushes Ministry’s valuation above $1 billion.
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• Giphy, a New York City-based searchable database for looping video clips, or GIFs, has raised $72 million in new funding, according to the Wall Street Journal. Draper Fisher Jurvetson led the round, and was joined by Institutional Venture Partners and China Media Capital. The raise values the company at around $600 million. Read more.
• Everything But The House, a Cincinnati, Ohio-based digital marketplace for estate sales, has raised $41.5 million in funding. Greenspring Associates led the round, with participation from returning investors Greycroft Partners and Spark Capital. Read more at Fortune.
• Riskalyze, an Auburn, Calif.-based startup that evaluates investment risk, has raised $20 million in growth equity. FTV Capital led the round.
• Cirina, a San Francisco-based startup developing blood tests that diagnose cancer, has raised $12 million in Series A funding. Decheng Capital led the round.
• Promethera Biosciences SA, a Belgium-based cell therapy and regenerative medicine company focused on treating liver diseases, has raised €10 million ($11 million) in an extension of its Series C funding round. Vesalius Biocapital, SRIW, Fund+, MGI Global Fund, the VC arm of Mitsui & Co, Boehringer Ingelheim Venture Fund, SMS Investments, Mitsubishi UFJ Capital, Cell Innovation Partners, and LifeLiver all participated.
• Unbabel, a San Francisco-based translation startup, has raised $5 million in Series A funding. Notion Capital and Caixa Capital led the round.
• Headset, a Seattle-based market research and analysis service for the marijuana industry, has raised $1 million in seed funding.
• Ministry Brands, a Knoxville, Tenn.-based SaaS provider for religious organizations, has raised an undisclosed amount of funding from Insight Venture Partners.
• Terra’s Kitchen, a Baltimore-based meal kit delivery startup that uses eco-friendly packaging, has raised an undisclosed amount in funding from KiwiVenture Partners II.
PRIVATE EQUITY DEALS
•The BelHealth Investment Partners-owned Apothecary By Design has acquired Village Fertility Pharmacy, a Waltham a Mass.-based specialty pharmacy focused on fertility. No financial terms were disclosed.
• General Electric will combine its oil and gas business with oil service provider Baker Hughes, The new publicly traded company will be the second-largest oilfield services provider, behind only Schlumberger in revenue. GE will own 62.5%, and contribute $7.4 billion in cash to Baker Hughes shareholders, who will own the remaining 37.5%. Read more at Fortune.
• Australia & New Zealand Banking Group (ANZ) will sell its retail businesses in five Asian markets, including China and Hong Kong, to Singapore lender DBS Group. ANZ said it will lose A$265 million ($201 million) on the sale. Read more at Fortune.
• Telecom provider CenturyLink will buy Level 3 Communications for equity value of $19.43 billion. The deal, including debt, is valued at $34 billion. CenturyLink will pay about $66.50 in stock and cash per share, a premium of 42%. Read more. Read more at Fortune.
No IPO news today.
• CITIC Capital Partners Limited has sold its majority stake in Tri-Wall Holdings, a Hong Kong-based heavy duty packing supplier, to Japanese packaging and paper manufacturer Rengo. No financial terms were disclosed.
• Astellas Pharma has agreed to acquire Ganymed Pharmaceuticals AG, a German biopharmaceutical company that focuses on developing antibody-based cancer treatments, for € 422 million ($461 million). Ganymed is backed by ATS Beteiligungsverwaltung GmbH, MIG Fonds, Future Capital AG and FCP Gany GmbH.
• KES Power, which is owned by Abraaj Group, has agreed to sell its controlling stake in the Pakistani utility K-Electric to the state-owned Shanghai Electric Power Company Limited. At $ 1.8 billion, the deal ranks among the biggest acquisitions in Pakistan in the past 10 years.
• Roper Technologies has agreed to acquire ConstructConnect, a SaaS provider for the construction industry, from Genstar Capital and Warburg Pincus for $632 million.
FIRMS + FUNDS
• Kainos Capital, a Dallas-based investment firm that focuses on food and consumer startups, has closed its second fund with $895 in equity commitments.
• Third Rock Ventures, a Boston-based venture capital firm investing in life science companies, has closed its fourth fund with $616 million.
•Chicago Ventures, a seed stage venture capital firm focusing on tech startups, has raised $66 million for its second fund.
• Kerri Sperling has joined Gemspring Capital as vice president of business development. She was most recently a senior consultant at Axial.
• Dru Rushing has joined Bowside Capital, a Charleston, S.C.-based private investment firm, as vice president. He was previously a senior analyst at Citigroup.
• Maneesh Jain has joined San Francisco-based cancer diagnosis startup Cirina as chief executive. He previously was president and chief operating officer of Butterfly Network, a medical imaging company.
• Third Rock Ventures has made a number of staff changes. Abbie Celniker has joined the firm as partner, Charles Homcy has been promoted from venture partner to partner, and Frank Gentile, Steve Sherwin, and Barbara Weber have been promoted from entrepreneur-in-residence to venture partners. Celniker was previously CEO of Eleven Biotherapeutics.
• Jack Hansen has joined Atlas Partners as a director. He previously worked Berkshire Partners.