NEW MONEY, IPOS, PRIVATE EQUITY ACTIVISTS
Good morning, hello, hi.
New money: Chris Urmson, former head of self-driving cars at Google (now Waymo), has revealed details about his stealthy startup, Aurora Innovation, to my colleague Kirsten Korosec. He’s working alongside Sterling Anderson and Drew Bagnell, formerly of Tesla and Uber. They’re starting out with $3 million of their own money and $3.1 million from their advisors. Here’s Kirsten on their business model:
Aurora isn’t interested in manufacturing cars; nor does it want to be a volume producer of the many sensors—such as cameras, radar, and light detection and ranging radar known as LiDAR—that these autonomous vehicles need to detect and perceive the world around them. Instead, the founders see a market need for creating the underlying technology for self-driving cars and helping automakers and others build the services and systems on top of it.
Aurora’s value lies in the design of the sensor and the understanding of what computation needs to be embedded into the main brain for the car, as well as the software and data products. (Read more here.)
That puts Aurora in direct competition with Waymo, which is currently suing Uber and Anthony Levandowski, the person who led Google’s self-driving car efforts prior to Urmson. Yesterday Levandowski stepped aside from his role leading Uber’s self-driving car efforts, in a sign that does not bode well for the defense.
IPO: Two notable debuts today– Carvana and Cloudera. They both priced their shares at $15. For Cloudera, that’s $1 above the announced range. For Carvana, that’s right in the middle of the range. The boost still isn’t enough for Cloudera to come close to its last private valuation, but remember, it’s not quite as bad as it looks.
Exit: BC Partners has fully exited its investment Swedish telecom company Com Hem, selling its 18.5% stake to Kinnevek. (See more details below.) BC invested in 2011; it is one of the firm’s largest equity investments from its ninth fund. It took the company public in 2014, and this sale means the firm has earned more than 2x its money.
“Great company, terrible stock”: This feels a bit ironic. Activist hedge fund ValueAct has taken a $750 million investment in KKR; the firm believes KKR’s stock is worth twice its current level. ValueAct’s Mason Morfit said the firm’s trading levels — 3.5x expected 2018 earnings, is “a valuation you put on a business that’s going out of business in the next three or four years.” His pronouncement gave KKR’s stock a tiny boost. Jen Wieczner reports:
ValueAct thinks KKR is worth $37 a share—more than double its stock price of $18 when Morfit began his presentation. KKR stock traded as high as $19 a share later in the morning. By the afternoon, KKR shares were still up more than 4%, or about $18.50 each—their highest point in nearly two years.
Profits: Yesterday I included Dropbox’s announcement that it now has EBITDA. Expect to see more of these profitability announcements as companies reset the narrative from “insane valuation” to something more akin to “viable business.” Here’s another such headline from yesterday: “From Burning Millions to Turning Profitable in Seven Months — How HotelTonight Did It.”
THE LATEST FROM FORTUNE…
• Hunter Harrison, CEO of CSX, will get $84 million even if he quits.
• A hacker group hijacked some Medium blogs.
• The plan to scrap net neutrality.
• What technology business leaders would love to get rid of.
U.S. economy off to a slow start this year. Could Apple and Amazon kill the Icelandic language? Fined for the crime of writing “I am an engineer.” How to curb the use of overseas tax havens. Trump’s tax plan and the mountain of debt. Trump tax plan silent on carried interest. All the things run by George Soros. Too much money chasing too few deals in China. An auto mechanic shortage. How Sheryl Sandberg’s manifesto drives Facebook. The reporter who took Bill O’Reilly down. The science of awkwardness.
• Domo, an American Fork, Utah-based business management platform, raised $100 million in Series D funding. Blackrock led the round, and was joined by Capital Group and Glynn Capital Management. Existing investor GGV Capital participated. The deal values the company at $2.3 billion. [This item has been updated. A previous version listed an incorrect funding amount.]
• Deep Fiber Solutions, an Atlanta-based cable engineering and construction company, raised $8.9 million in funding. Angel Investor Management Group led the round, and was joined by Fidelis Capital and Bonaventure Capital.
• TapClicks, a San Jose, Calif-based marketing technology provider, raised $3 million in funding from Saas Capital.
• Exonar, a UK-based data loss prevention platform, raised 1.25 million pounds ($1.61 million) in funding. Investors include Winton Group and Amadeus Capital Partners.
• Me.me, a meme search engine, raised $1.5 million in funding. Investors include Arjun Sethi from The Social+Capital Partnership, Peter Rojas from Betaworks Ventures, Danhua Capital and Miramar Ventures.
• Work Today, a Santa Monica, Calif.-based labor marketplace, raised $1.1 million in seed funding. Investors include Mucker Capital, Social Capital, Hone Capital, E-Merge, and GAN Ventures. This item has been updated to reflect Work Today’s headquarters city.
HEALTH AND LIFE SCIENCES DEALS
• Epic Sciences, a San Diego, Calif.-based diagnostics company, raised $40 million Series D funding. Hermed Capital led the round, and was joined by Altos Capital Partners, Domain Associates, Genomic Health, Pagoda Investment, Reach Tone Limited, RMI Partners, Sabby Capital and VI Ventures.
• Ambient Clinical Analytics, a Rochester, Minn.-based critical care software provider, raised $5.4 million in Series A funding. Waterline Ventures and Bluestem Capital co-led the round, and were joined by Social Capital.
PRIVATE EQUITY DEALS
• CVC Capital Partners has agreed to acquire Breitling, a Switzerland-based watch company, according to Bloomberg. The deal will likely value the company at more than 800 million euros ($870 million). Read more.
• Sumeru Equity Partners and Ontario Pension Board invested $120 million in Snow Software, an Austin, Texas-based software asset management platform.
• GlobeLTR Energy, a portfolio company of Clearlake Capital Group, acquired West Texas H2O, a Midland Texas, Permian Basin-based fresh and produced water solutions provider. Financial terms weren’t disclosed.
• Levine Leichtman Capital Partners has agreed to acquire HomeVestors of America, a Dallas, Texas-based professional house buying franchise. Financial terms weren’t disclosed.
• Accuride Corp, a portfolio company of Crestview Partners, has agreed to acquire KIC LLC, a Vancouver, Wash.-based provider of wheel end components. Financial terms weren’t disclosed.
• RANDY’s Worldwide Automotive, a portfolio company of Linsalata Capital Partners, acquired Zumbrota Bearing & Gear, a Zumbrota, Minn.-based manual transmission provider. Financial terms weren’t disclosed.
• Disruptive Capital Investments acquired REG, a London-based regulatory compliance platform. Financial terms weren’t disclosed.
• Hillhouse Capital Group and CDH Investments made an offer to buy Belle International Holdings (SEHK:1880), a Hong Kong-based footwear retailer, according to Reuters. The deal values the company at $6.8 billion. Read more.
• Atlantia (BIT:ATL), a Rome, Italy-based toll-road operator, agreed to sell a 10% stake of its domestic motorway unit to investors including Allianz (DB:ALV) for 1.48 billion euros ($1.6 billion), according to Reuters. Read more.
• Petroleum Marketing Group acquired Leonard E. Belcher, a Springfield, Mass.-based marketer of petroleum products, from Matrix Capital Markets Group. Financial terms weren’t disclosed.
• WisdomTree and AdvisorEngine acquired Kredible Technologies, Atlanta-based research-based marketing company. Financial terms weren’t disclosed.
• Cloudera (NYSE:CLDR), a Palo Alto, Calif.-based analytics software company, raised $225 million in an initial public offering, giving the company a market valuation of about $1.9 billion. Cloudera is trading on the New York Stock Exchange under the ticker CLDR. Cloudera backers include Intel (22% pre-IPO stake), Accel (16.3%), Greylock (12.5%), GV and In-Q-Tel. Read more at Fortune.
• Carvana, a Phoenix, Ariz.-based online used car platform, raised $225 million by offering 15 million shares at $15 apiece. The company is trading on the New York Stock Exchange under the ticker CVNA. Wells Fargo Securities, BofA Merrill Lynch, Citi and Deutsche Bank acted as lead managers on the deal.
• NCS Multistage Holdings, a Houston, Texas-based oilfield services provider, raised $162 million by offering 9.5 million shares at $17 apiece. It is owned by Advent International. The company will list on the Nasdaq under the ticker NCSM. Credit Suisse, Citi, Wells Fargo Securities, J.P. Morgan, Simmons & Co., Raymond James, RBC Capital Markets and Tudor, Pickering, Holt & Co. acted as lead managers on the deal.
• Appian, a Reston, Va.-based business process management provider, filed to raise up to $86 million in an initial public offering. The company plans to list on the Nasdaq under the ticker APPN. Appian backers include Novak Biddle Venture Partners (21.5% pre-IPO) and New Enterprise Associates (11.7%). Morgan Stanley, Goldman Sachs, Barclays, Pacific Crest, Canaccord Genuity and Cowen & Company are the joint bookrunners on the deal.
• BC Partners has agreed to sell Com Hem Group, a Sweden-based cable TV and broadband operator, to Kinnevik for SEK 3.7 billion ($419 million). The deal values the company at €3.2 billion ($3.5 billion).
• Exiger has agreed to acquire OutsideIQ, a Toronto-based risk-assessment technology startup, for C$30 million ($22 million), according to Reuters. OutsideIQ raised venture funding from Genwealth Ventures and Valucap Investments. Read more.
• Martin Tschopp joined Naspers Ventures as Chief Operating Officer. Previously Tschopp was the CEO at Kiva.
• Eric B. Cheng joined ROTH Capital Partners as managing director and head of healthcare investment banking.
SHARE TODAY’S TERM SHEET
Term Sheet is produced by Polina Marinova. Submit deal items here.