Greetings from Cleveland, where the GOP Convention is heading into its third day.
• Razor’s Edge: Today’s big deal is that Unilever has acquired Dollar Shave Club, the direct-to-consumer razor retailer known for its kitschy TV ads starring company founder and CEO Michael Dubin. No financial terms were disclosed but, as we were first to report last night, sources tell us that the price-tag was $1 billion in cash. A bunch of notes on this, as it is the largest M&A deal for a privately-held e-commerce company since Amazon bought Zappos in 2009 (a deal that began valued at $850m, but ended at $1.2b thanks to Amazon’s stock price appreciation):
1. Dubin was introduced to Unilever through a J.P. Morgan banker, although the early discussions were just about an advisory and/or minority investment agreement. Eventually conversations turned to acquisition, but DSC never ran an auction process.
2. Dubin has a long-term agreement with Unilever to let him continue running DSC, which will operate as an independent business.
3. The VC returns are staggering. I’ve seen a spreadsheet of the seed round (from early 2012), in which DSC raised $900,000 on a $4.5 million pre-money valuation. That round’s bigest checks were $250,000 a piece from Forerunner Ventures and Kleiner Perkins, while Andreessen Horowiz, Shasta Ventures and Felicis Ventures each put in $100,000. Venrock would lead the Series A and Series B, the latter of which had a $57 million post-money valuation. Technology Crossover Ventures led the final two rounds, which included a $630 million post-money on last fall’s Series D. Board seats went to Venrock, Forerunner, Shasta Ventures and TCV (plus Science Inc., which helped create DSC in the first place).
4. The strategic rationale of this deal for DSC is that Unilever should help it rapidly expand into new geographic markets (it’s only in three countries currently), and also aid in increased distribution (although DSC does not plan to deviate from its direct-to-consumer model). For Unilever, this helps it better compete against rival Procter & Gamble (owner of Gillette), by bringing it into the razor market for the first time.
5. Speaking of P&G, the conglomerate is now under some serious pressure to respond. Its own direct-to-consumer razor business has struggled to gain market traction, and I wouldn’t be surprised to see it make a run at DSC rival Harry’s or growing niche player Walker & Co.
6. Harry’s shareholders tell me they’re thrilled by the DSC news (despite their rival gaining immediate scale). Primarily because it sets a high price ― Unilever is paying 4.2x projected revenue for the unprofitable DSC ― with Harry’s believed to be generating more current revenue than DSC (in part thanks to its private-label business in Europe) with control of its own production stack (it owns a razor-making factory, which may or may not aid in a P&G deal, given that Gillette also manufactures its own blades).
7. For more on DSC, check out this Fortune feature from Adam Lashinsky, published in early 2015.
• Hyperloopy: As expected, Hyperloop One has fired a countersuit against co-founder Brogan BamBrogan and three other ex-employees, accusing them of intending to “manufactur[e] a rebellion and incit[e] conflict in a transparent attempt to seize control of the company. My colleague Jennifer Reingold has the story here.
• Coal confusion: Last night’s RNC Convention program was supposed to focus on jobs and the economy, although it was instead dominated by family testaments to Trump and everyone else trying to further impugn Hillary Clinton. In fact, the only real talk of jobs came from West Virginia and Kentucky pols and delegates (the latter during roll call), who claimed Donald Trump would bring back coal jobs that have been lost over the past eight years.
To be sure, the Obama Administration has been no friend to coal, and Clinton has openly signaled her animus to the industry. But the West Virginia and Kentucky folks are delusional if they think Donald Trump is going to be any better for them outside of kinder rhetoric.
For starters, the big problem for coal right now isn’t regulation. It’s price. Namely that natural gas has become incredibly cheap, due largely to America’s own domestic energy boom. It also hasn’t helped U.S. coal producers that China is pulling back on coal imports, as it builds dozens of nuclear power plans.
Trump is promising an “all of the above” energy strategy, but a big part of it is cutting regulations across the board ― under a theory that it will significantly boost production, thus further growing the American economy (particularly now that oil exports are allowed again). If successful, this only would further reduce the price of natural gas, thus continuing to put coal at a competitive disadvantage (even though coal prices too might lessen). Moreover, Trump has occasionally signaled his willingness to start a trade war with China, which certainly wouldn’t boost the coal export biz.
Again, I understand the coal industry’s animus toward Democrats. But its current problems aren’t really partisan.
THE BIG DEAL
• Unilever (NYSE: UL) has acquired Dollar Shave Club, the Santa Monica, Calif.-based direct-to-consumer retailer of razors and other personal care products. No financial terms were disclosed, but sources say that the price-tag was $1 billion in cash.
Dollar Shave Club had raised over $160 million in venture capital funding, most recently last November at a $539 million valuation. Read more.
VENTURE CAPITAL DEALS
• Sprinklr, a New York-based provider of enterprise social technology solutions, has raised $105 million in Series F funding at a $1.8 billion valuation. Temasek led the round, and was joined by Wellington Management, EDBI and return backers like Battery Ventures, Intel Capital and Iconiq Capital. Read more.
• Sift Science, a San Francisco-based provider of real-time machine learning fraud prevention for online businesses, has raised $30 million in Series C funding. Insight Venture Partners led the round, and was joined by Union Square Ventures and Spark Capital. www.siftscience.com
• Pantheon, a WordPress and Drupal hosting service, has raised $29 million in Series C funding. Industry Ventures was joined by return backers Foundry Group, OpenView Venture Partners and Scale Venture Partners. www.pantheon.io
• Doppler Labs, a New York-based maker of an all-in-one wireless listening system, has raised $24 million in new VC funding. The Chernin Group led the round, and was joined by individual investors like David Geffen, Dan Gilbert, Henry Kravis and Anton Levy. www.dopplerlabs.com
• GuardiCore, an Israeli provider of data center security and breach detection solutions, has raised $20 million in Series B funding. Existing backers Battery Ventures and 83North were joined by new investors Cisco Investments. www.guardicore.com
• Omise, a Thailand-based online payments platform, has raised $17.5 million in Series B funding. SBI Investment led the round, and was joined by return backers Sinar Mas Digital Ventures, Ascend Money and Golden Gate Ventures. www.omise.co
• Precision Ocular, a UK-based retinal therapeutics company, has raised £15.5 million in Series A funding. Backers include Imperial Innovations, Consort Medical, NeoMed, V-Bio Ventures and Hovione Scientia Ltd. www.precisionocular.co.uk
• Brandcast, a San Francisco-based code-free website platform for brands, has raised $13.9 million in Series A funding. Shasta Ventures led the round, and was joined by Correlation Ventures and existing backer Marc Benioff. www.brandcast.com
• Akili Interactive Labs Inc., a Boston-based provider of non-pharmacological therapeutics and diagnostics for cognitive disorders, has raised $11.9 million in new Series B funding (round total is now $42.4 million). Backers include Merck Ventures and Amgen Ventures. www.akiliinteractive.com
• BestMile SA, a Swiss developer of cloud intelligence for driverless vehicles, has raised $2.5 million in new VC funding led by Forticap. www.bestmile.com
• Trim, a personal finance chatbot, has raised $2.2 million in new VC funding. Eniac Ventures led the round, and was joined by Sound Ventures, Version One Ventures and Core Innovation Capital. Read more.
• ZipBooks, an accounting software startup, has raised $2 million in seed funding. Peak Ventures led the round, and was joined by Pelion Venture Partners, Liquid 2 Ventures and individual angels. www.zipbooks.com
• Mist, a Mountain View, Calif.-based provider of mobile experiences for business, has raised an undisclosed amount of strategic funding from Cisco Investments. www.mist.com
PRIVATE EQUITY DEALS
• Albireo Energy, a portfolio company of Huron Capital Partners, has acquired Advanced Power Control and Energy Systems Technologies Inc., a pair of Newark, Del.-based providers of building automation systems, lighting controls, metering, fault detection and diagnostics, and energy services to building owners in the Mid-Atlantic region. No financial terms were disclosed. www.albireoenergy.com
• Bonlook, a Montreal-based eyewear company, has raised an undisclosed amount of private equity funding from Walter Capital Partners. www.bonlook.com
• The Hilb Group, a Richmond, Va.-based portfolio company of ABRY Partners, has acquired Fern Park, Fla.-based Carrier Insurance Agency Inc. for an undisclosed amount. www.hilbgroup.com
• GHO Capital has acquired Caprion Biosciences, a Montreal-based provider of immunology and proteomics analytical lab services, from Chicago Growth Partners. No financial terms were disclosed. www.caprion.com
• Hygiena LLC, a Camarillo, Calif.-based environmental testing and sanitation company, has raised an undisclosed amount of private equity funding from Warburg Pincus. Read more.
• The Riverside Company has acquired n2y LLC, a Huron, Ohio-based provider of education publishing services. No financial terms were disclosed. www.n2y.com
• Sentinel Capital Partners has acquired Revenew International, a Houston, Texas-based provider of cost recovery and cost containment services. No financial terms were disclosed. www.revenew.net
• Audentes Therapeutics Inc., a San Francisco-based developer of gene therapy products for patients with serious and rare diseases, raised $75 million in its IPO. The company priced five million shares at $15 per share (middle of range), for an initial market cap of around $315 million. The pre-revenue company will trade on the Nasdaq under ticker symbol BOLD, while BofA Merrill Lynch, Cowen & Co. and Piper Jaffray served as lead underwriters. Audentes had raised around $108 million in VC funding from firms like OrbiMed Advisors (29.9% pre-IPO stake), 5AM Ventures (14.6%), Versant Ventures (11.1%), Sofinnova Venture Partners (7.8%) and Deerfield Management (6.3%). www.audentestx.com
• BioVentus Inc., a Durham, N.C.-based maker of bone stimulation devices, has set its IPO terms to around 8.82 million shares being offered at between $16 and $18 per share. It would have an initial market cap of approximately million, were it to price in the middle of its range. The company plans to trade on the Nasdaq under ticker symbol BIOV, with J.P. Morgan and Piper Jaffray serving as lead underwriters. The company reports a $34 million net loss on nearly $254 million in revenue for 2015. Shareholders include Essex Woodlands Health Ventures, Smith & Nephew, Spindletop Healthcare Capital, Pantheon Ventures, Ampersand Capital and Alta Partners. www.bioventusglobal.com
• Egeria has agreed to sell Den Braven, a Dutch maker of adhesives and sealants, to Arkema SA for approximately €485 million. Read more.
• MenschDanke of Germany has acquired Versus, a Berlin-based product comparison site. No financial terms were disclosed. Versus had raised $3.8 million in VC funding from Earlybird Venture Capital and 500 Startups. Read more.
• Monsanto (NYSE: MON) has rejected an upwardly-revised $125 per share takeover offer from Bayer AG (DB: BAYN). Read more.
• U.S. antitrust regulators plan to file lawsuits to stop Anthem’s (NYSE: ANTM) planned takeover of Cigna (NYSE: CI) and Aetna’s (NYSE: AET) purchase of Humana (NYSE: HUM). Read more.
FIRMS & FUNDS
• No firm or fund news this morning.
MOVING IN, ON & UP
• David Mell has joined RBC Capital Markets as a managing director covering the retail and “value-added distribution industries.” He previously was a managing director with Wells Fargo. www.rbc.com
• Manny Roman has joined PIMCO as CEO. He previously led hedge fund management firm Man Group PLC. Read more.
• Alex Tracy has joined Perella Weinberg Partners as a managing director in the firm’s advisory business. He previously was a managing director with Miller Buckfire & Co. www.pwpartners.com
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