A few quick notes on today’s deal bonanza, which we can expect to continue through the end of the year.
CPG M&A: This morning Dr. Pepper Snapple announced it will pay $1.7 billion for Bai Brands, an antioxidant beverage company. Bai is expected to do $425 million in net sales next year. Dr. Pepper already owned a minority stake in Bai. The drink’s appeal is its low sugar and low calorie count. Strand Equity was a backer of Bai.
Meanwhile Fortune’s John Kell has the scoop on another beverage deal: PepsiCo has acquired KeVita, a maker of probiotic and fermented drinks. Similar to the Bai deal, PepsiCo had already owned a minority stake in KeVita from 2013. Likewise, KeVita drinks have low sugar and calories. But PepsiCo tends to think slightly smaller on its acquisitions, and this deal is no exception. While reports on deal rumors pegged the KeVita deal value at less than $500 million, Kell reports that the Pepsico paid just $200 million. KeVita was backed by SPK Capital, KarpReilly and the Ecosystem Integrity Fund. Read more here.
I’ve written before about the recent interest of venture firms to back consumer products companies. With exits like Dollar Shave Club’s sale to Unilever, why wouldn’t they? But they’re now competing with their potential buyers for these deals, as CPG giants increasingly look to build relationships and invest in upstart disrupters earlier and earlier. Last week, for example, Sodexo, a Paris-based food and facilities management company, launched its own $53 million venture arm. It’s one of about 30 new venture funds launched by CPG companies in the last two years. (Sidenote, this reminds me of yesterday’s news that Accel Partners is telling its portfolio companies to “tamp down the disdain for established, non-technology companies” that they’re trying to disrupt, since those companies may end up buying them. See previously: Wal-Mart and Jet, Under Armour and MyFitnessPal, General Motors and Cruise Automation.)
When venture firms and corporate investors wade into the space, they’ll likely encounter private equity investors like the ones behind Bai and KeVita. Indeed, consumer-focused PE funds are going strong: This morning consumer-focused buyout firm, L Catterton, announced it has closed its eighth fund with $2.75 billion in commitments.
Japanese M&A: Buyout firms haven’t been terribly successful breaking into the Japanese market. It’s the third-largest economy in the world, and yet buyouts have totaled an average of just $4 billion a year over the last decade. That’s starting to change, though, for a variety of reasons (succession, governance, a renewed IPO market.) Today we have proof of that change with KKR’s $4.5 billion buyout of Calsonic Kansei, the auto part maker. The firm outbid Bain Capital and MBK Partners to buy the asset from Nissan.
Broken Chain: Goldman Sachs has ended its membership to blockchain group R3 CEV after a disagreement over the group’s planned fundraising. Fortune’s Robert Hackett has details on how the relationship fell apart. You can read that here, but in case you’re not familiar with blockchain technology or why you should care, here’s a key passage:
The shakeup indicates that the [blockchain] field is maturing rather than waning. Distributed ledger technologies—which underpin cryptocurrencies such as Bitcoin—are gearing up to replace the aging back office software and databases that keep Wall Street humming. As these blockchain solutions come closer to reality, the companies backing their production are beginning to pick sides.
Cloud M&A: Yesterday Oracle acquired Dyn, a DNS services company backed by $100 million in funding from Pamplona Capital Management and North Bridge Venture Partners & Growth Equity. Fortune’s Barb Darrow notes that big cloud companies are likely eyeing Dyn competitors Cloudflare and Verisign as attractive acquisition targets. Darrow also confirms a report from Dan Primack that the deal value was between $600 million to $700 million. Read more.
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• Barefoot Networks, a Palo Alto, Calif. chipmaker, raised an additional $23 million in Series C funding. Alibaba and Tencent led the financing, which brings the round to $80 million.
• Aye Finance, a New Delhi startup that provides micro-loans to businesses in Northern India, raised $10.3 in funding. LGT led the round, and was joined by SAIF Partners, and Accion, according to TechCrunch. Read more.
• PayKey, an Israeli peer-to-peer payments company, raised $6 million in Series A funding. E.ventures and Gaby Salem led the round, and was joined by CommerzVentures, Mastercard and Santander InnoVentures, Digital Leaders Ventures, and Magma VC.
• Vymo, a Bengaluru, India sales analytics company, raised $5 million in Series A funding from Sequoia India, according to The Economic Times. Read more.
• True Link Financial, a San Francisco financial services provider for seniors, raised $3.6 million in funding. Investors include Kapor Capital, Initialized Capital, Symmetrical Ventures, and the Ziegler Link-Age Longevity Fund.
• SafeDK, an Israeli SDK management platform for developers, raised $3.5 million in Series A funding, according to TechCrunch. Read more.
• Apptopia, a Boston app analytics company, raised $2.7 million in seed funding. Sound Ventures led the round.
• Recursion Pharmaceuticals, a Salt Lake City drug discovery company focused on rare genetic diseases, raised an additional $2.2 million in Series A funding from Felicis Ventures and several angel investors, closing the round at $15.1 million.
• Helpshift, a San Francisco provider of mobile customer support experience solutions, raised an additional $1.8 million in Series B funding from Cisco.
• Cera, a London health technology company, raised $1.3 million. Investors include Credo Ventures and the World Health Organization.
• Findo, a Menlo Park, Calif AI-powered virtual assistant, raised an addition $1 million in funding, closing its seed round at $7 million. Investors include ABBYY, Flint Capital Venture Fund, and Foxit.
• PatSnap, a Singapore-based IP analytics platform, raised an undisclosed amount in Series C funding. Sequoia Capital led the round, and was joined by Shunwei Capitaland Qualgro.
PRIVATE EQUITY DEALS
• KKR has agreed to acquire Calsonic Kansei, a Japan-based auto parts manufacturer, from Nissan Motor and other shareholders for as much as ¥ 498.3 billion ($4.5 billion). Read more at Fortune.
• Generation Growth Capital has invested an undisclosed amount in Select Food Products, a Plymouth, Minn.-based food manufacturer specializing in the sandwich, breakfast, snack and desserts.
• Marlin Equity Partners has acquired Edgenet, a Nashville, Tenn-based provider of cloud-based product content network and home improvement configuration software and services. Financial terms were not disclosed.
• Millpond Equity Partners and Wasena Capital Management have agreed to acquire Hands-On Learning, a Denver, Colorado-based science curriculum and lab kits manufacturer.
• Goldman Sachs has pulled out of R3 CEV, a blockchain group comprised of more than 70 financial firms, after failing to reach an agreement on terms of a new fundraising deal. Read more at Fortune.
• Sunoco Logistics Partners has agreed to buy Energy Transfer Partners in a $21 billion all-stock deal. ETP shareholders would get 1.5 Sunoco shares for each ETP share they own. At a value of about $39.30 per share, that’s a small discount from the company’s $39.37 Friday close. Read more at Fortune.
• Google has acquired Qwiklabs, a maker of IT training courses on cloud platforms and software.
• Presidio Holdings, a New York-based IT services company, plans to file for an IPO that could value it as much as $3 billion, according to the Wall Street Journal. The company has retained J.P. Morgan Chase and Citigroup for the IPO. Presidio is owned by Apollo Global Management, which purchased the company from American Securities in 2015. Read more.
• STX Entertainment, a Burbank, Calif movie studio founded by Robert Simonds, is considering filing for an initial public offering in Hong Kong, according to a report in Variety. The company has multiple Chinese investors, including Tencent and PCCW. Read more.
• PepsiCo has agreed to acquire KeVita, a California City, Calif. sparkling probiotic drink maker, for around $200 million. KeVita was backed by SPK Capital, KarpReilly and Ecosystem Integrity Fund. Read more at Fortune.
• Dr Pepper Snapple Group has agreed to buy Bai Brands, a Princeton, N.J.-based maker of antioxidant beverages, for $1.7 billion in cash. The company’s backers include CAVU Venture Partners and Strand Equity Partners. Read more at Fortune.
• Acxiom-owned LiveRamp, a San Francisco software company that unifies customer data across applications, has agreed to acquire Arbor and Circulate for about $140 million in cash (plus $50 million in Acxiom stock, which will replace unvested equity). Arbor, a New York marketplace for people-based data, raised $9 million from investors including First Round and Canaan Partners. Circulate, a Philadelphia startup that helps publishers monetize first-party data, raised $17.4 million in funding. Its backers include AOL Ventures, Bullpen Capital, and Chris Dixon.
• Gauge Capital has agreed to sell Veridicus, a Salt Lake City-based provider of pharmacy services, to Magellan Health, an Avon, Conn.-based healthcare management company.
• Norwest Equity Partners has sold Stanton Carpet Corporation, a New York carpet manufacturer and distributor to Quad-C Management, a middle-market private equity firm.
• Acrisure, a national insurance brokerage, backed by Genstar Capital, completed the previously announced management-led buyout of the company for $2.9 billion. Acrisure’s brings in annual revenue of more than $670 million.
FIRMS + FUNDS
• Biomatics Capital Partners, a Seattle-based venture firm founded by Boris Nikolic, raised $200 million for its first fund.
• Information Venture Partners, a Toronto-based early-stage fintech and enterprise software VC firm, raised $106 million for its second fund.
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