December 10th, 2018 December 10th, 2018 December 10th, 2018 December 10th, 2018

Huawei Executive’s Lawyers Fight for Bail Ahead of Extradition Decision

VANCOUVER, British Columbia — Since Dec. 1, Meng Wanzhou, a top executive of the Chinese technology firm Huawei and a daughter of the company’s founder, has been detained in Vancouver at the behest of American authorities, prompting a diplomatic tussle between China and the United States.

On Monday, Ms. Meng’s lawyers fought for her to be granted bail while she awaits a decision on whether she will be extradited to the United States.

At the second day of a bail hearing at British Columbia’s Supreme Court, Ms. Meng’s lawyers pulled out all the stops to free their client. They brought in executives of two security companies to testify about how they would monitor Ms. Meng if she were to be released. The lawyers said Ms. Meng, 46, would pay the fees for both security companies, submit to physical and electronic monitoring, and give two Vancouver homes and a cash payment to secure bail. The cash and homes would total roughly $15 million in value.

“Given her unique profile as the face of a Chinese corporate national champion, if she were to flee or breach your order in any way in these very unique circumstances, my lord, it does not overstate to say she would embarrass China itself,” one of her lawyers, David Martin, told the judge.

United States authorities have argued in court documents that Ms. Meng should not be released before extradition. They said that her family’s wealth and connections would make it easy for her to flee Canada, and that she had been issued seven different passports from China and Hong Kong in the past 11 years. China and the United States do not have an extradition treaty, they added.

The judge, Justice William Ehrcke, is expected to rule on the bail request by the end of Monday.

Ms. Meng’s detention has unfolded just as China and the United States are trying to end a brutal trade war. Given Ms. Meng’s stature as a top Chinese executive and Huawei’s position as a leading Chinese technology company, her arrest complicates trade talks and the already rocky relationship between the two countries.

Ms. Meng was arrested on Dec. 1 while between flights in Vancouver, where she had arrived from Hong Kong and was heading to Mexico. Canadian authorities said they detained her at the request of the United States.

At the heart of the case that American authorities appear to be building against Ms. Meng is that she misled financial institutions into making transactions that violated United States sanctions against Iran.

Huawei used a Hong Kong company, Skycom Tech, to make transactions in Iran and do business with telecom companies there, in violation of American sanctions, Canadian prosecutors said on Friday. Banks in the United States cleared financial transactions for Huawei, inadvertently doing business with Skycom. One unnamed bank and its American subsidiary cleared more than $100 million in transactions related to Skycom through the United States between approximately 2010 and 2014, according to an affidavit.

Ms. Meng personally made a presentation to a bank — later disclosed to be HSBC — where she said Huawei and Skycom operated in Iran in compliance with United States sanctions, Canadian prosecutors said. Those statements constituted fraud, they said.

On Monday, the presentation Ms. Meng made to HSBC officials was released in a court filing. The presentation was dated July 2013 — the same month that the British bank became subject to monitoring as part of a settlement with American officials over money-laundering charges involving Iran and other organizations.

Titled “Trust, Compliance & Cooperation,” the presentation described sanctions put in place by the United Nations, the European Union and the United States, and focused on Huawei’s telecom business. It described Skycom as a “business partner” working with Huawei on “sales and services in Iran.” Huawei had held shares of Skycom and put Ms. Meng on the board to provide the supervision necessary to “ensure trade compliance” but gave those up after it instead decided to do business in Iran through a local subsidiary, the presentation said.

According to a letter filed in court from the United State Justice Department, each of the several criminal charges Ms. Meng faces in the United States carries a maximum sentence of 30 years’ imprisonment.

American authorities are working to extradite Ms. Meng. Changes to Canada’s extradition laws in 1999 — which are still widely criticized by human rights groups — mean that about 90 percent of extradition requests heard by courts are granted.

At any extradition hearing, Ms. Meng’s lawyers will not be allowed to introduce evidence, nor will the Canadian government be required to turn over the evidence collected by American authorities. Canada will most likely only present evidence that supports the case for extraditing Ms. Meng.

A Canadian judge cannot turn down the request because he or she finds the evidence weak, it does not meet Canadian standards or because the judge doesn’t believe that the case will succeed at trial. But the judge can disregard evidence that was obtained through torture or evidence that was obtained in Canada in an illegal way.

If, as is likely, the judge rules against Ms. Meng, her extradition becomes a political matter. It will be up to Prime Minister Justin Trudeau’s justice minister, who is a politician, to issue the order to send her to the United States. Jody Wilson-Raybould, the justice minister, is limited in the reasons she can use to overrule the court. The prospect that the person being extradited will face a death sentence is the most common reason Canada will oppose extradition. That is not an issue in this case.

Ms. Meng may have two outs. One is to argue that the request from the United States was motivated by racial or religious prejudice. Ms. Wilson-Raybould can also refuse to issue an order when a case is found to be politically motivated. Ms. Meng’s lawyers may raise recent comments made by Larry Kudlow, director of the White House’s National Economic Council, who told CNBC that Huawei had repeatedly been warned against violating Iranian sanctions.

If the justice minister issues an extradition order, Ms. Meng can go to British Columbia’s appeals court for a judicial review.

If she loses there and the justice minister again issues a removal order, Ms. Meng can try her luck at the Supreme Court of Canada. In the past, the Supreme Court has ruled that the justice minister shouldn’t be second-guessed by the courts except in the most extreme circumstances or when ministers have misinterpreted their legal obligations.

December 10th, 2018

Chinese Court Says Apple Infringed on Qualcomm Patents

A two-year legal battle between Apple and its chip supplier, Qualcomm, reached a new level of contention on Monday when Qualcomm said a Chinese court had ordered Apple to stop selling older iPhone models in China.

The court ruling is the latest turn in the two companies’ fight over Apple’s use of Qualcomm technology in iPhones. But Apple and Qualcomm disagreed on the impact the decision will have on iPhone sales in China.

Qualcomm said a Chinese court ruled on Nov. 30 that Apple had infringed on two Qualcomm patents and issued a preliminary injunction that bars Apple from selling the iPhone 6S, the iPhone 6S Plus, the iPhone 7, the iPhone 7 Plus, the iPhone 8, the iPhone 8 Plus and the iPhone X in China. The ruling did not apply to Apple’s three newest iPhones: the XS, the XS Max and the XR.

Apple said in a statement, however, that it continued to sell all iPhone models in China.

“Qualcomm’s effort to ban our products is another desperate move by a company whose illegal practices are under investigation by regulators around the world,” an Apple spokesman, Josh Rosenstock, said. He added that in the Chinese court case, Qualcomm had challenged Apple on three patents it had never raised before, including one that had already been invalidated.

Late Monday in China, Apple continued to sell four of the seven iPhone models affected by the ruling — the iPhone 7 and 7 Plus and the iPhone 8 and 8 Plus — on its Chinese website, as well as its newer models.

Apple’s stock price had moved little in midday trading on Monday. Qualcomm’s stock had risen about 2.1 percent by midday.

A slowdown in iPhone sales has contributed to a roughly 25 percent slide in Apple’s share price since the company last released quarterly results on Nov. 1. The ruling also adds to developments that have worsened trade tensions between the United States and China, including the recent arrest of the chief financial officer of the Chinese electronics giant Huawei.

“The hits keep coming,” said Tom Forte, an Apple analyst at D. A. Davidson, referring to the string of negative headlines for the company. He added that the Chinese ruling was not as worrisome as other recent news because it affected only older smartphones and could still be resolved.

It is possible that Apple would be able to sell older iPhones if they were running on newer software. But Don Rosenberg, Qualcomm’s executive vice president and general counsel, said in a statement that the court ruling wasn’t specific to the phones’ software. He said Qualcomm would ask the Chinese courts to enforce the order.

“Apple continues to benefit from our intellectual property while refusing to compensate us,” he said.

Qualcomm, which has long sold key communications chips to Apple but has been excluded from its latest models, has filed a series of patent suits against the smartphone giant in multiple countries. Those lawsuits came after Apple filed suit in early 2017 challenging Qualcomm’s practices in licensing its patents.

The ruling in China involved two Qualcomm patents. One lets consumers adjust and reformat the size and appearance of photographs. The other manages applications using a touch screen when viewing, navigating and dismissing applications, Qualcomm said.

A Qualcomm spokeswoman said Apple could ask the Fuzhou Intermediate People’s Court to reconsider its orders within 10 days of being served with them. There is no other appeal process. Apple cannot post a bond or pay a fine and continue infringing the two patents, she said.

Apple said it had filed a request for “reconsideration” with the court on Monday, the first step in appealing the preliminary injunction.

Steve Mollenkopf, Qualcomm’s chief executive, has said he expects that victories in its patent cases would help persuade Apple to agree to settle the legal disputes.

Qualcomm is the largest supplier of modem chips that allow smartphones to communicate over cellular networks. More than half of its profits have historically come from patent license fees it charges to phone makers, which have in turn complained to regulatory authorities and sued Qualcomm.

Apple sued Qualcomm in January 2017, accusing it of monopolistic practices that harm Apple and the industry. The Federal Trade Commission raised similar charges in a case filed against Qualcomm the same month. Qualcomm has insisted its practices are legal.

Apple has gradually reduced its reliance on Qualcomm, turning to Intel for modem chips in its latest iPhones.

Qualcomm has tried to put pressure on Apple by claiming patent infringement and other misdeeds, such as accusations that Apple stole proprietary Qualcomm software and shared it with Intel. Apple said Qualcomm had failed to provide evidence of any stolen information.

Qualcomm has also resorted to an aggressive public-relations campaign against Apple. It enlisted the firm Definers Public Affairs to publish negative articles about Apple on a conservative website and to start a false campaign to draft Apple’s chief executive, Timothy D. Cook, as a presidential candidate, presumably to make him a target of President Trump.

News of the Chinese court’s ruling emerged during a broad skirmish between China and the United States over trade. The United States has cracked down on ZTE and Huawei, two Chinese telecommunications giants, for illicit activities. And China scuttled Qualcomm’s proposed acquisition of NXP, a Dutch chip maker.

Some business leaders in the United States have been bracing for retribution from China after the arrest of Huawei’s chief financial officer in Canada, fearing that American executives in China could be harassed.

The Trump administration said last week that it did not anticipate such retaliation and expressed hope that the situation, which it described as a criminal justice matter, would not derail trade talks.

December 10th, 2018

M&A wrap: JD.com, Intel, Google, Internet of Things, Tivity Health, Nutrisystem


Photo credit: Adobe Stock

JD.com, China’s largest retailer, and Intel have launched a joint lab that will explore the use of Internet of Things (IoT). The Digitized Retail Joint Lab will develop next-generation vending machines, media and advertising solutions, and technologies to be used in the stores of the future, based on Intel architecture. The new lab marks the extension of the existing partnership between Intel and China’s largest retailer. The companies are jointly developing algorithms that analyze customer traffic and in-store purchasing habits to help store owners provide a more personalized and convenient experience to their customers. “As China’s most influential retailer and a leader in data-driven offline retail innovation, JD is an important partner for us to continue to develop a wide range of use cases for our latest technology developments,” said Wei Chen, vice president of Intel and general manager of Intel IOTG China. In June, JD announced a $550 million investment from Google, owned by Alphabet Inc. (Nasdaq: GOOGL).

In this busy shopping season, retailers are increasingly turning to tech M&A to help them compete with online purveyors, especially Amazon.com Inc. (Nasdaq: AMZN). The ongoing challenges in the sector continue to force some retailers to close, including the June liquidation of Toys R Us, backed by Bain Capital and KKR & Co. Inc. (NYSE: KKR). Technology is driving many of the transactions. Best Buy Co. (NYSE: BBY) recently agreed to spend $800 million to buy GreatCall, a provider of emergency response services for seniors, from Chicago private equity firm GTCR. Meanwhile, GreatCall announced a partnership on-demand transportation provider Lyft to make it easier for seniors to get car service. Also at play in retail M&A is the acknowledgment that consumers are choosing retailers that match their values. For example, Canadian retail giant Empire Company Ltd. (TSE: EMP.A) recently agreed to buy fast-growing farm-to-table grocer Farm Boy for $800 million from Boston private equity firm Berkshire Partners LLC. For more on the transactions in the sector, see: 5 trends driving retail M&A.

Deal news
Tivity Health Inc. (Nasdaq: TVTY), a provider of fitness and health improvement programs, is buying weight management company Nutrisystem Inc. (Nasdaq: NTRI) for $1.3 billion. “Many of the most common chronic conditions afflicting Americans today are associated with weight management, nutrition and physical fitness, and addressing both calories in and calories out is an important part of alleviating those conditions,” Tivity Health CEO Donato Tramuto said in a statement. ” Today, Tivity Health manages calories out with our SilverSneakers, Prime Fitness and Flip50 programs; and Nutrisystem manages calories in with its weight loss solutions. We believe combining our two companies will create entirely new value propositions for our health plans, fitness partners, members and consumers.” Credit Suisse acted as exclusive financial advisor to Tivity Health and Bass, Berry & Sims PLC served as legal counsel. Evercore acted as exclusive financial advisor to Nutrisystem and Davis Polk & Wardwell LLP served as legal counsel.

Private equity firms GI Partners and TA Associates have agreed to acquire the stake held in Netsmart Technologies Inc. by Allscripts Healthcare Solutions Inc. (NASDAQ: MDRX). The transaction represents an additional investment for GI Partners over its initial stake acquired in April 2016, and results in majority ownership of Netsmart by GI Partners. The deal is expected to further grow Netsmart as a provider of human services and post-acute technology in healthcare. J.P. Morgan Securities LLC and Evercore acted as financial advisors to Allscripts, and Sidley Austin provided legal counsel. Paul Hastings provided legal counsel to GI Partners. Kirkland & Ellis provided legal counsel to TA.

Dealmaking in November continued apace, with Glanbia’s acquisition of Slim-Fast, Grubhub’s deal for Tapingo and DSW’s purchase of Camuto are among the transactions that closed. The mid-term elections were also top of mind. For more on the month, see Glanbia, DSW and Grubhub closed notable deals in November.

For the latest in deal news, see Weekly wrap: Nexstar, Tribune Media, Thoma Bravo, TPG

For our weekly look at private equity firms seeking LPs, see PE fundraising scorecard: Aberdeen, Abry, Apollo, Caryle, KKR

Featured content
Private equity firms are giving back – organizing groceries at food pantries, mentoring students in schools, running races for cancer cures and pitching in at animal shelters. In time for the holidays, Mergers & Acquisitions highlights the philanthropic and volunteering initiatives of 5 PE firms: the Carlyle Group LP (Nasdaq: CG), Frontier Capital, Huron Capital, the Riverside Co. and Star Mountain Capital. At Carlyle, charity starts at the top, with CEO David Rubenstein’s signing of The Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy. Community involvement is more important than ever to today’s work force. Millennials, defined as people born between 1981 and 1996 by the Pew Research Center, are “for sustainability, diversity, inclusion and giving back to the community,” says Carlyle managing director Christopher Ullman. “We are finding this more and more. Yes, we are here to make money, secure retirement for pensioners, but the firm wants to support people’s efforts to make the world a better place.” Frontier Capital supports several causes, including The Miracle League, a baseball organization for people who are mentally and physically challenged. “There’s more to life than work and material things, and our people understand that,” says Frontier managing partner Andrew Lindner. At Detroit-based Huron Capital, the firm’s philanthropic efforts are focused on local groups. “We want to leave our footprint in this community where we live and work while being as helpful as possible,” says partner Gretchen Perkins. “The charitable activities we do as a group, the ability for each employee to influence where Huron’s donations go, and the ability to perform community service during work hours, or receive matching funds for an employee’s personal non-profit passion, all contribute to a portion of an employee’s sense of purpose and contributing to the greater good.” Read the full story, The Big Give.

We asked dealmakers at ACG Philadelphia’s M&A East to share their thoughts on Giving Back. Check out our video interview with Baker Tilly Capital’s Judit Nagy-Eichelber: Volunteer work brings teams together. Also watch our conversation with Reed Smith’s Jonathan Moyer: For millennial dealmakers, giving back is part of who they are.

The Minneosta Vikings face the Seattle Seahawks Monday night, following the Chicago Bears’ defeat of the Los Angeles Rams and the Dallas Cowboys‘ victory over the Philadelphia Eagles in NFL Week 14. Off the field, many players build companies. Off the field, many football players invest in companies. New England Patriots quarterback Tom Brady recently teamed with former Giants defensive end Michael Strahan, who is the co-host of ABC’s Good Morning America, to launch a sports media startup called Religion of Sports Media, which has raised $3 million in venture capital funding from CourtsideVC and Advancit Capital. Muhsin Muhammad, who played wide receiver for the Carolina Panthersand the Chicago Bears, is a managing director of private equity firm Axum Capital Partners. Steve Young, former San Francisco 49ers quarterback, is a co-founder of private equity firm HGGC. View our slideshow, NFL stars Tom Brady, Michael Strahan, Steve Young go PE.

Events
ACG New York Women of Leadership Summit brings together women in the middle-market dealmaking community for a day focused on networking and knowledge sharing on Jan. 17 at the Intercontinental Barclay Hotel. Alexa Von Tobel, chief innovation officer of Northwestern Mutual, keynotes.

Exponent Women kicks off the new year with an evening of networking on Jan. 24 at The Campbell, at New York’s Grand Central Terminal. Jazz Age financier John W. Campbellconverted the space to his private office and reception hall in 1923, and it has recently been restored by design firm Ingrao Inc.

ACG Boston, ACG Connecticut, ACG New Jersey, ACG New York & ACG Philadelphia host ACG Northeast Dealmaking at the Mountain at Stowe Mountain Resort in Stowe, Vermont Jan. 27-29. The event provides a chance for middle-market M&A professionals from across the northeast to come together for two days of close knit networking, shared conversations and valuable time spent to deepen your relationships within the deal community.


Mary Kathleen Flynn

Mary Kathleen Flynn

Mary Kathleen Flynn joined SourceMedia in 2011, serving as the Editor-in-Chief of Mergers & Acquisitions. MK oversees the brand’s content on all media platforms, including website, e-newsletters, video, slideshows, podcasts and print.


Demitri Diakantonis

Demitri Diakantonis

Demitri Diakantonis joined SourceMedia in 2015 and serves as Managing Editor of Mergers & Acquisitions. He covers all aspects of middle-market dealmaking, with a focus on strategic buyers and the consumer and retail sectors, and writes The Buyside column.

December 10th, 2018

DealBook Briefing: Guess Who Said ‘I Do Not Respect the S.E.C.’?

And that may be only part of his alleged fraud: The WSJ reports that prosecutors aired new suspicions that Mr. Ghosn also underreported his income from 2015 to 2018. (The new suspicions allow authorities to detain him for 22 more days without allowing him to post bail.)

What happens next: Bloomberg notes that in Japan a trial would typically take place about 40 to 50 days after indictment was issued, and that “fewer than 1 percent of cases in Japan’s district and county courts resulted in a not-guilty verdict or the defendant being released in 2017.” Prosecutors have said Mr. Ghosn could face up to 10 years in prison if he is found guilty.

China’s leaders are trying to maintain a delicate balance between outrage and necessity amid the unfolding drama over the arrest in Canada of a top executive from the tech giant Huawei, write Keith Bradsher and Raymond Zhong of the NYT.

On the one hand, Beijing wants to lash out at the U.S. over its role in the case against Meng Wanzhou, Huawei’s chief financial officer, involving charges of fraud. The Chinese government summoned the American ambassador to China, Terry Branstad, to protest the arrest. Beijing has also threatened Canada with “‘grave consequences.”

• “Ms. Meng’s arrest has reinforced the feeling among many people in China that Washington is using every means at its disposal to hold back their nation’s economic ascent,” Mr. Bradsher and Mr. Zhong write. “That feeling makes it harder for economic reformers in China to support trade compromises with the United States.”

On the other hand, the Chinese government doesn’t want to upset a recent truce with the U.S. over trade issues. Beijing, Mr. Bradsher and Mr. Zhong write, is “trying to compartmentalize the Huawei issue, while still taking an assertive enough stance to satisfy nationalistic anger in China.”

More Huawei news: Japan has barred the company from obtaining government contracts.

A vast fraud at a Malaysian investment fund has cast a harsh light on Goldman Sachs, which served as an underwriter for 1MDB’s funds. How much might the scandal wind up costing the firm? DealBook’s Peter Eavis takes a closer look:

• “Several analysts expect the government to force Goldman to disgorge the roughly $600 million it earned arranging the bond deals. The question is whether Goldman will also have to pay that amount, or twice the sum, to the government as a penalty.”

December 10th, 2018

SoftBank’s record IPO reaches $23.5 bln after extra share sale

The logo of Softbank is displayed at a press briefing on Softbank's new service in Tokyo on January 15, 2018. 

KAZUHIRO NOGI | AFP | Getty Images

The logo of Softbank is displayed at a press briefing on Softbank’s new service in Tokyo on January 15, 2018. 

SoftBank Group Corp is set to raise 2.65 trillion yen ($23.5 billion) in Japan’s biggest-ever IPO – a share sale widely regarded as finalising the group’s transition from domestic telco to a monolithic global tech investor.

Telco unit SoftBank Corp on Monday priced its stock at 1,500 yen apiece, as previously indicated.

It also said it will sell all extra shares set aside for excess demand, taking the total just shy of the record $25 billion raised in 2014 by Chinese e-commerce giant Alibaba Group Holding Ltd, a SoftBank Group portfolio company.

The group, which controls the world’s biggest tech private equity fund at nearly $100 billion, will use the proceeds to invest in startups which have ranged from tiny games makers to U.S. ride-hailing giant Uber Technologies Inc.

“Demand was well above the number of shares on offer,” SoftBank Corp said, declining to disclose by how much.

The stock will debut on the Tokyo Stock Exchange’s first section on Dec. 19.

December 9th, 2018

How Much Could the 1MDB Scandal Cost Goldman Sachs?

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A huge fraud at a Malaysian investment fund has cast a harsh light on Goldman Sachs. But how much could the scandal cost the firm?

Wall Street has been trying to estimate the amount of legal penalties and settlements Goldman may pay after United States prosecutors unveiled a guilty plea by a former senior Goldman Sachs investment banker and charged a second banker.

The affair appears to have taken its toll on Goldman’s stock. Its shares are down 20 percent since the Justice Department’s charges were revealed. By comparison, bank stocks as a whole are down 6 percent, and shares of Morgan Stanley, Goldman’s rival, have fallen nearly 10 percent.

The ultimate size of the legal hit may largely depend on whether the Department of Justice and others can demonstrate that Goldman’s controls were inadequate and that wrongdoing could take place more easily in its environment. Regulators such as the Federal Reserve and the New York State Department of Financial Services may also decide to penalize Goldman.

Malaysia’s government set up a fund called 1Malaysia Development Berhad, or 1MDB, in 2009. Goldman arranged three bond deals for the fund in 2012 and 2013 that raised $6.5 billion. Federal prosecutors say more than $2.7 billion of that sum was misappropriated.

Tim Leissner, a senior Goldman banker until 2016, pleaded guilty in August to taking part in bribery and money laundering schemes. The government has charged another former Goldman banker, Roger Ng, with conspiring to launder money and pay bribes. Mr. Ng was recently arrested by the Malaysian authorities, and the Justice Department intends to extradite him to the United States.

Prosecutors have also brought charges against Jho Low, a Malaysian financier who served as an intermediary for Goldman in its dealings with Malaysian officials and 1MDB. According to the government, Mr. Leissner and Mr. Ng conspired with Mr. Low to hide his involvement with the fund.

Prosecutors are also examining a private meeting in 2012 between Mr. Low and Lloyd C. Blankfein, then Goldman’s chief executive, at the bank’s headquarters in New York.

Cooperating with law enforcement can help reduce penalties. Several analysts expect the government to force Goldman to disgorge the roughly $600 million it earned arranging the bond deals. The question is whether Goldman will also have to pay that amount, or twice the sum, to the government as a penalty.

Goldman has shared 1MDB-related communications between its employees and others with prosecutors, according to a person briefed on the case. But the importance of such information to the Justice Department is not known.

Goldman has publicly sought to portray the fraud as the work of a few employees who took significant steps to conceal the wrongdoing.

“These are guys who evaded our safeguards, and lie, stuff like that’s going to happen,” Mr. Blankfein said in early November. “Somebody’s going to use phones away from us, and personal this and personal that,” he added, referring to personal devices.

But the government documents suggest prosecutors might not be convinced that just a few employees were involved or that there weren’t weaknesses in Goldman’s compliance program.

In the charges against Mr. Low, prosecutors said, referring to Goldman: “The business culture at U.S. Financial Institution #1, particularly in Southeast Asia, was highly focused on consummating deals, at times prioritizing this goal ahead of the proper operation of its compliance functions.” And in Mr. Leissner’s charging document, prosecutors contended that “other employees and agents” of Goldman, and not just Mr. Leissner and Mr. Ng, had known about promises to pay bribes to secure 1MDB business.

The document also described another Goldman executive as a co-conspirator in the bribery scheme. This person, The New York Times reported last month, citing people familiar with the matter, was Andrea Vella, who was most recently co-head of investment banking in Asia for Goldman. Mr. Vella was suspended by the bank last month. His lawyer declined to comment.

And in his plea hearing, Mr. Leissner told the court that his efforts to conceal facts from the bank’s compliance and legal employees were “very much in the culture of Goldman Sachs.”

But Mr. Leissner did not expand on his assertion about Goldman’s culture in the redacted court transcript containing that remark. And it’s important that the government has not charged Mr. Vella.

If prosecutors charge no one from Goldman besides Mr. Leissner and Mr. Ng, the bank’s “a couple of bad apples” defense may gain ground.

The degree of punishment exacted by the Justice Department could influence other lawsuits against Goldman Sachs. Take the possibility that the government and Goldman enter into a deferred prosecution agreement. Under such an agreement, the Justice Department files charges against a firm but asks that they be postponed while the firm take steps to address prosecutors’ concerns. In Goldman’s case, it might have to agree to revamp parts of its compliance program.

Particularly crucial in deferred prosecution agreements is the “statement of facts,” which describes the criminal activity and contains detailed evidence of wrongdoing. If Goldman ended up agreeing to a deferred prosecution agreement, the statement of facts could bolster lawsuits brought by two government investment funds from Abu Dhabi that played a role in 1MDB bond deals, said Peter Henning, a law professor at Wayne State University in Detroit and a DealBook columnist.

“We are in the process of assessing the details of allegations and fully expect to contest the claim vigorously,” Michael DuVally, a Goldman spokesman, said in an email, referring to the Abu Dhabi lawsuit.

Of course, Goldman’s lawyers can be expected to push for a nonprosecution agreement instead. The statement of facts with such an agreement would most likely be softer.

December 8th, 2018 December 7th, 2018

Weekly wrap: Nexstar, Tribune Media, Thoma Bravo, TPG

Target Acquirer Value ($millions) Synopsis INSUL-TAB Inc Pexco LLC AEA Investors LP’s unit Pexco LLC acquired INSUL-TAB Inc, a Woburn-based rubber products manufacturer. Roll-Rite LLC Safe Fleet Holdings LLC Oak Hill Capital Partners LP’s unit Safe Fleet Holdings LLC acquired Roll-Rite LLC, a Gladwin-based manufacturer of electric tarp systems and components for the trucking industry, from Argosy Capital and Capital Partners Inc. API Defense USA Inc Kitron Inc 15.9 Kitron ASA’s unit Kitron Inc definitively agreed to acquire the entire share capital of API Defense USA Inc, a Windber-based electronic components manufacturer, for USD 15.9 mil in cash from API Technologies Corp, ultimately owned by JF Lehman & Co. Q-Centrix LLC TPG Growth LLC TPG Capital LP’s unit TPG Growth LLC acquired Q-Centrix LLC, a Portsmouth-based provider of data processing and hosting services, from Sterling Capital Ltd via a leveraged buyout transaction. Pugatch Realty Corp Laffey International Realty LLC Berkshire Hathaway Homeservices Inc’s unit Laffey International Realty LLC merges with Pugatch Realty Corp, a Woodmere-based real estate agency. Strategic Hospital Resources Inc Smith Seckman Reid Inc Smith Seckman Reid Inc acquired Strategic Hospital Resources Inc, an Atlanta-based provider of medical equipment consulting services. Thomas F Leo LS PC Joe Hunt & Associates Inc Joe Hunt & Associates Inc acquired Thomas F. Leo LS PC, a Delhi-based provider of surveying and mapping services. South Jersey Energy Co-Retail Natural Gas Business & Open Flow Energy UGI Energy Services LLC UGI Corp’s unit UGI Energy Services LLC acquired the retail natural gas business & open flow energy of South Jersey Energy Co, a Folsom-based electric power distributor ultimately owned by South Jersey Industries Inc. PEC Safety Operations LLC Thoma Bravo LLC Thoma Bravo LLC acquired a majority interest in PEC Safety Operations LLC, a Mandeville-based software publisher, via a leveraged buyout transaction. Yucatan Foods LP Apio Inc 80.0 Landec Corp’s unit Apio Inc acquired the entire share capital of Yucatan Foods LP, a Los Angeles-based avocado products producer, for about USD 80 mil in cash. The consideration consisted of USD 60 mil in cash and USD 20 mil in common shares. Apple Valley Waste Service Inc Gold Medal Group LLC Kinderhook Industries LLC’s unit Gold Medal Group LLC acquired Apple Valley Waste Service Inc, a Kearneysville-based provider of hazardous waste treatment and disposal services. Keystone Consolidated Industries Inc Liberty Steel USA 320.0 Liberty House Ltd’s unit Liberty Steel USA definitively agreed to acquire the entire share capital of Keystone Consolidated Industries Inc, a Dallas-based steel products manufacturer, from Contran Corp for USD 320 mil. Gro Solutions Inc Q2 Holdings Inc Q2 Holdings Inc acquired Gro Solutions Inc, an Atlanta-based software publisher. Parata Systems LLC TCGRx TCGRx merges with Parata Systems LLC, a Durham-based provider of computer systems design services. Tablet Inc Michelin North America Inc Michelin North America Inc, a unit of Compagnie Generale des Etablissements Michelin SCA, acquired Tablet Inc, a New York-based internet service provider. Tesaro Inc GlaxoSmithKline PLC 4,319.0 GlaxoSmithKline PLC of the UK definitively agreed to acquire the entire share capital of Tesaro Inc, a Waltham-based biopharmaceuticals manufacturer, for USD 75 in cash per share or a total of USD 4.319 bil via tender offer. The offer was conditional upon at least 50% of the shares being tendered. Originally, in May 2017, Tesaro was rumored to be seeking a buyer for the company. Thorntons Inc Thorntons Inc SPV Thorntons Inc SPV, a special purpose acquisition vehicle by ArcLight Capital Partners LLC and BP PLC, agreed to acquire Thorntons Inc, a Louisville-based owner and operator of gasoline stations with convenience stores, via a leveraged buyout transaction. Originally, in June 2018, Thorntons was rumored to be seeking a buyer for the company, with Marathon Petroleum Corp and 7-Eleven named as potential bidders. Tribune Media Co Nexstar Media Group Inc 6,400.0 Nexstar Media Group Inc definitively agreed to acquire the entire share capital of Tribune Media Co, a Chicago-based television broadcasting company, for USD 6.4 bil. The consideration would consist of USD 46.5 in cash per share or a total of USD 4.130 bil and the assumption of USD 2.241 bil in liabilities plus USD 28.371 mil/options. Originally, In September 2018, Tribune was rumored to be seeking a buyer for the entire share capital of the company, with Apollo Global Management LLC, Nexstar Media Group, Byron Allen, Ion Media, Hicks Equity Partners, Cerberus Capital, and Northwest Broadcasting LP named as potential bidders. MightyHive Inc S4 Capital PLC S4 Capital PLC of the UK plans to acquire MightyHive Inc, a San Francisco-based provider of marketing consulting services. Originally, in November 2018, S4 was rumored to be planning to acquire MightyHive. EllisLab Inc Digital Locations Inc Digital Locations Inc definitively agreed to acquire the entire share capital of EllisLab Inc, a Beaverton-based provider of data processing and hosting services. Navistar Defense LLC Cerberus Capital Management LP Cerberus Capital Management LP agreed to acquire a 70% stake in Navistar Defense LLC, a Lisle-based tactical wheeled vehicles manufacturer, via a leveraged buyout transaction from Navistar Inc, ultimately owned by Navistar International Corp. 845 Unit Acacia Portfolio,Phonenix,Arizona Greystar Real Estate Partners LLC Greystar Real Estate Partners LLC acquired the 845-unit Acacia Portfolio in Phoenix. KBK Insurance Group Inc NSM Insurance Group Inc ABRY Partners LLC’s unit NSM Insurance Group Inc acquired KBK Insurance Group Inc, a Harahan-based insurance agency. Nuvera Fuel Cells Inc-PowerTap Hydrogen Generator Assets OneH2 Inc OneH2 Inc definitively agreed to acquire the PowerTap hydrogen generator assets of Nuvera Fuel Cells Inc, a Billerica-based manufacturer of fuel cell power and hydrogen generation products ultimately owned by Hyster-Yale Materials Handling Inc. Arran Isle Inc Patrick Industries Inc 54.0 Patrick Industries Inc acquired Arran Isle Inc, an Elkhart-based hardware manufacturer, from Arran Isle Ltd for about USD 54 mil. The transaction included LaSalle Bristol. Aircraft Performance Group Inc Liberty Hall Capital Partners LP Liberty Hall Capital Partners LP acquired Aircraft Performance Group Inc, a Castle Rock-based provider of commercial transportation equipment rental and leasing services, via a leveraged buyout transaction. Road Dog Drivers LLC Professional Drivers of Georgia Inc Professional Drivers of Georgia Inc, a unit of EmployBridge Inc, acquired Road Dog Drivers LLC, a Cornelius-based provider of recruiting services. Schenck SC CliftonLarsonAllen LLP CliftonLarsonAllen LLP plans to merge with Schenck SC, an Appleton-based provider of accounting and business consulting services. TripleCare Inc Curavi Health Inc Curavi Health Inc acquired TripleCare Inc, a Long Island City-based provider of ambulatory health care services, from Apple Tree Partners. Connectics LLC WorkForceConnexion Recruiting Solutions LLC WorkForceConnexion Recruiting Solutions LLC acquired Connectics LLC, an Atlanta-based provider of human resources and executive search consulting services. Phynexus Inc Biotage AB 21.6 Biotage AB of Sweden agreed to acquire the entire share capital of Phynexus Inc, a San Jose-based provider of biotechnology research and development services, for about USD 21.601 mil. The consideration will consist of an estimated USD 4.9 mil in cash, issuance of 0.487 mil common shares and an estimated USD 10 mil in profit-related payments. The shares were valued based on Biotage’s closing stock price of USD 13.760 on 3 December 2018, the last full trading day prior to the announcement. Parker Hannifin Corp-Energy Grid Tie Division LS Industrial Systems Co Ltd LS Industrial Systems Co Ltd of South Korea acquired the Energy Grid Tie division of Parker Hannifin Corp, a Cleveland-based manufacturer of motion and control technologies. Gebbs Healthcare Solutions Inc ChrysCapital Management Co ChrysCapital Management Co of Mauritius acquired an 80% stake in Gebbs Healthcare Solutions Inc, a Culver City-based provider of ambulatory health care services, via a leveraged buyout transaction. Megastir Technologies LLC Mazak Corp Mazak Corp acquired Megastir Technologies LLC, a Provo-based fabricated metal products manufacturer. Daily Jefferson County Union Adams Publishing Group LLC Adams Publishing Group LLC acquired Daily Jefferson County Union, a Fort Atkinson-based newspaper publisher. Revere Gas Quarles Petroleum Inc Quarles Petroleum Inc agreed to acquire Revere Gas, an Oilville-based petroleum refinery operator. Schneider Energy Consulting Summit Energy Services Waste Management Inc’s unit Summit Energy Services definitively agreed to merge with Schneider Energy Consulting, a Fort Morgan-based provider of oil and gas drilling services. American Stainless Tubing Inc Synalloy Corp 28.0 Synalloy Corp definitively agreed to acquire American Stainless Tubing Inc, a Troutman-based manufacturer of steel pipes and tubes, for about USD 28 mil and profit-related payment. Acquired IO Inc adjust GmbH adjust GmbH of Germany bought Acquired.io, a Foster City-based software publisher. Trusource Labs Everise Holdings Pte Ltd Everise Holdings Pte Ltd of Singapore, jointly owned by Everstone Capital Partners III LP and Sunrise BPO Services Pte Ltd, agreed to acquire Trusource Labs, an Austin-based provider of administrative management and general management consulting services. Caliber Collision Centers Inc ABRA Auto Body & Glass LP Hellman & Friedman LLC’s unit ABRA Auto Body & Glass LP definitively agreed to merge with Caliber Collision Centers Inc, a Lewisville-based provider of automotive surfaces repair and maintenance services, via a leveraged buyout transaction from OMERS Private Equity Inc, ultimately owned by Ontario Municipal Employees Retirement System and Leonard Green & Partners LP. Gesa Credit Union Inspirus Credit Union Inspirus Credit Union plans to acquire the remaining stake it does not already own Richland-based in Gesa Credit Union. OncoMed Pharmaceuticals Inc Mereo BioPharma Group PLC 57.3 Mereo BioPharma Group PLC of the UK plans to merge with OncoMed Pharmaceuticals Inc, a Redwood City-based biological products manufacturer, for approximately 23.7 mil in new Mereo ordinary shares or an estimated USD 57.269 mil via a stock swap transaction. The shares were valued based on Mereo’s closing stock price of USD 2.416 on 4 December 2018, the last full trading day prior to the announcement. Upon completion of the deal, Mereo and OncoMed shareholders would respectively own 75% and 25% of the merged entity. TFC Communication USA Inc Suzhou TFC Optical Communication Co Ltd Suzhou TFC Optical Communication Co Ltd of China plans to acquire the entire share capital of TFC Communication USA Inc, a manufacturer of electronic components, from Liping Li for a nominal consideration of USD 100 in cash. Dakine Hawaii Inc-Operating Assets JR286 Inc JR286 Inc acquired the operating assets of Dakine Hawaii Inc, a Hood River-based manufacturer of sporting and athletic goods ultimately owned by Altamont Capital Partners LLC. Dakine Inc Marquee Brands LLC Neuberger Berman Group LLC’s unit Marquee Brands LLC acquired Dakine Inc, a Hood River-based wholesaler of outdoor sports gear and accessories. Elliot Plaza,Seattle,Washington The Sterling Organization LLC 11.7 The Sterling Organization LLC acquired Elliot Plaza, a 50,678-sq ft shopping center in Seattle, for USD 11.65 mil via a leveraged buyout transaction. Southport Logistics Park,Dallas Fort Worth,Texas Logistics Property Co LLC Logistics Property Co LLC acquired Southport Logistics Park, a 252-acre master-planned logistics destination within the South Dallas submarket of Dallas-Fort Worth, TX. Verimatrix Inc Inside Secure SA 158.0 Inside Secure SA of France agreed to acquire Verimatrix Inc, a San Diego-based software publisher, for about USD 158 mil. The consideration will consist of USD 143 mil in cash and up to USD 15 mil in profit-related payments. The Deal LLC Euromoney Institutional Investor PLC 87.3 Euromoney Institutional Investor PLC of the UK agreed to acquire the entire share capital of The Deal LLC, a New York-based book publisher, from Wasserstein & Co LP for USD 87.3 mil. Sears Holdings Corp ESL Investments Inc 4,621.0 ESL Investments Inc through a subsidiary, plans to acquire the remaining 81.16% stake it does not already own in the bankrupt Sears Holdings Corp, a Hoffman Estates-based department store operator, for about USD 4.621 bil via an unsolicited offer. The consideration will include USD 1.8 bil credit and USD 1.1 bil in assumed liabilities. Concurrently, ESL planned to acquire the Sears Home Improvement Business, PartsDirect Business, and Kenmore Brand & related assets of Sears.  US M&A Deals Announced November 30 to December 6, 2018  Source: Thomson Reuters
December 7th, 2018

Uber files IPO paperwork, races against Lyft for big offering

Uber application logo is seen on a screen in front of taxi board in Ankara, Turkey on August 31, 2018.

Ali Balikci | Anadolu Agency | Getty Images

Uber application logo is seen on a screen in front of taxi board in Ankara, Turkey on August 31, 2018.

Uber Technologies Inc has filed paperwork for an initial public offering, according to three people with knowledge of the matter, taking a step closer to a key milestone for one of the most closely watched and controversial companies in Silicon Valley.

The ride-hailing company filed the confidential paperwork on Thursday, in lock-step with its smaller U.S. rival, Lyft Inc, which also announced on Thursday it had filed for an IPO, setting the stage for one of the biggest technology listings ever.

The simultaneous filings extend the protracted battle between Uber and Lyft, which as fierce competitors have often rolled out identical services and matched each other’s prices.

Uber’s most recent valuation was $76 billion, and could be worth $120 billion in an IPO. Its listing next year would be the largest in what is expected to be a string of public debuts by highly valued Silicon Valley companies, including apartment-renting company Airbnb and workplace messaging firm Slack.

Uber’s debut will be a test of investor tolerance for legal and workplace controversies, which embroiled Uber for most of last year, and on Chief Executive Dara Khosrowshahi’s progress in turning around the company. Khosrowshahi took over more just than a year ago.

Uber faces a deadline to go public by Sept. 30, and a filing this week suggests the debut will come earlier than that.

IPOs from Uber and Lyft will test public market investor appetitive for the ride-hailing business, which has proved wildly popular but also unprofitable.

Uber in the third quarter lost $1 billion and is struggling with slowing growth, although its gross bookings, at $12.7 billion, reflect the company’s enormous scale.

The Wall Street Journal reported the filing earlier on Friday.

December 7th, 2018 December 7th, 2018

Huawei Executive Took Part in Sanctions Fraud, Prosecutors Say

VANCOUVER, British Columbia — The reasons that the United States asked the Canadian authorities to arrest a top executive of the Chinese technology company Huawei last week had been shrouded in mystery.

On Friday, the details of the arrest and what led up to it came out in a Canadian courtroom.

At a bail hearing in Vancouver for Meng Wanzhou, the chief financial officer of Huawei and a daughter of the company’s founder, Canadian prosecutors said she was accused of fraud. The heart of the charges related to how Ms. Meng may have participated in a scheme to trick financial institutions into making transactions that violated United States sanctions against Iran, they said.

Ms. Meng had “direct involvement” with Huawei’s representations to banks, said John Gibb-Carsley, an attorney with Canada’s Justice Department.

The hearing shed light on an incident that has rattled the relationship between the United States and China as they prepare to enter negotiations to cease a brutal trade war. While changing planes in Vancouver on Dec. 1, Ms. Meng was arrested at the behest of the United States, which has for years looked into potential ties between Huawei and the Chinese government or Communist Party.

Because of Ms. Meng’s stature in China as a top executive and part of its elite, news of her arrest has rippled through the country.

A Huawei spokesman said late Friday, “We have every confidence that the Canadian and U.S. legal systems will reach the right conclusion.”

With Ms. Meng, 46, seated inside a glass box at British Columbia’s Supreme Court, Mr. Gibb-Carsley laid out what had led to her arrest. He said that between 2009 and 2014, Huawei used a Hong Kong company, Skycom Tech, to make transactions in Iran and do business with telecom companies there, in violation of American sanctions. Banks in the United States cleared financial transactions for Huawei, inadvertently doing business with Skycom, he said.

The banks were “victim institutions” of fraud by Ms. Meng, Mr. Gibb-Carsley said.

In 2013, articles by Reuters alleged that Huawei used Skycom to do business in Iran, and had tried to import American-made computer equipment into the country in violation of sanctions. Several financial institutions asked Huawei if the allegations were true, Mr. Gibb-Carsley said.

At the time, Ms. Meng arranged a meeting with an executive from one of the financial institutions, he said. During the meeting, she spoke through an English interpreter and presented PowerPoint slides in Chinese, saying that Huawei operated in Iran in strict compliance with United States sanctions. Ms. Meng explained that Huawei’s engagement with Skycom was part of normal business operations and that Huawei had sold the shares it once held in Skycom.

But there was no distinction between Skycom and Huawei, Mr. Gibb-Carsley said. Huawei operated Skycom as an unofficial subsidiary, making efforts to keep the connection between the companies secret.

Skycom employees used Huawei email addresses and had badges and a letterhead featuring the Huawei logo, he said. Skycom documents showed that an entity to which the company was sold in 2009 was also controlled by Huawei until at least 2014, according to an affidavit read in court.

Ms. Meng’s presentation to the financial institution constituted fraud, Mr. Gibb-Carsley said. Her attorney, David Martin, said the bank was HSBC.

A global bank based in London with operations in the United States, HSBC has repeatedly landed in trouble with the American authorities for violating anti-money-laundering rules. As a result, HSBC had officials from a consulting firm, Exiger, stationed inside the bank to monitor its compliance. Exiger officials noticed suspicious Iranian-linked transactions involving Huawei and flagged them to the United States Justice Department, according to two people familiar with the matter who weren’t authorized to speak publicly.

Mr. Martin said Ms. Meng’s PowerPoint presentation to HSBC had been prepared by Huawei’s legal team and disclosed the sale of Skycom. He added that the American government had provided only a “skeletal description” of the accusations.

Stuart Levey, the chief legal officer at HSBC, said, “The U.S. Department of Justice has confirmed that HSBC is not under investigation in this case.”

Marc Raimondi, a spokesman for the Justice Department, declined to comment on the charges revealed in court on Friday.

The accusations against Ms. Meng and Huawei are similar to ones that the United States government made in 2016 against ZTE, another large Chinese technology company. In that case, American officials released internal ZTE documents in which executives had described creating “cutoff companies” that would do business with Iran, North Korea and other nations placed under sanctions by the American government.

A warrant for Ms. Meng’s arrest was issued in the Eastern District of New York on Aug. 22, Mr. Gibb-Carsley said. A Canadian justice then issued a warrant for Ms. Meng on Nov. 30 after it became known that she would change planes in Vancouver on her way from Hong Kong to Mexico.

Ms. Meng had traveled to the United States regularly in 2014, 2015, 2016, Mr. Gibb-Carsley said. Her last trip was in February and March 2017. In April 2017, Huawei found out about the United States investigation into the company when its subsidiaries were served with a grand jury subpoena, he said.

Ms. Meng and other executives then stopped visiting the United States, even though she has a 16-year-old son — one of three sons from a previous marriage — at a school in Boston, Mr. Gibb-Carsley said. Ms. Meng, who remarried, also has a daughter, according to an affidavit.

Mr. Martin pushed back on the idea that Ms. Meng had avoided the United States because she feared prosecution. After AT&T canceled a deal to distribute Huawei smartphones in the United States in January and the federal government banned the use of Huawei products in government contracts, Huawei essentially abandoned the market, Mr. Martin said.

“An entity would have to be tone deaf to not understand that the United States had become a hostile place for Huawei to do business,” he said.

Mr. Gibb-Carsley argued against bail for Ms. Meng. He said that she had vast financial resources and no strong ties in Canada, and that China had no extradition treaty with the United States or Canada.

Mr. Martin offered two properties in Vancouver and a cash deposit to secure Ms. Meng’s bail. Ms. Meng would not breach a court order, he said, adding that doing so would “humiliate and embarrass her father, who she loves,” and embarrass Huawei’s thousands of employees. Ms. Meng’s father is Ren Zhengfei, Huawei’s founder.

“She would not embarrass China itself,” Mr. Martin said. When he later repeated that point, Ms. Meng touched her eyes and the sheriff gave her tissues.

By the end of the day, no bail had been set, and the judge in the case said the hearing would continue on Monday morning.

Any extradition process can take weeks or months, depending on the rules of the country that arrests the suspect and whether the suspect chooses to fight the extradition request. The United States Justice Department must now present evidence to the Canadian court that supports its request and has 60 days from the arrest to make a full request for extradition.

December 7th, 2018

Meng Wanzhou Was Huawei’s Professional Face, Until Her Arrest

BEIJING — As Huawei’s finance chief and daughter of its founder, Meng Wanzhou has been a polished, professional face for a huge technology firm that long was opaque to the outside world.

Ms. Meng, the eldest daughter of Ren Zhengfei, the leader of the telecom equipment maker, has appeared before reporters to announce the company’s financial results. She has spoken at company events in New York; Cancún, Mexico; and beyond. She helped inaugurate centers in Britain, a key market for the Chinese giant’s expansion into the Western world.

She also sat on the board of a Huawei partner company in Hong Kong called Skycom Tech that Canadian authorities now say did business in Iran. And through that position and her job at Huawei, Ms. Meng may have personally been involved in tricking financial institutions into making transactions that violated United States sanctions against Iran, they said.

That has thrust Ms. Meng, 46, into the center of what promises to be a complex diplomatic tussle between the United States and China. She was arrested Dec. 1 in Vancouver, Canada, while changing flights, at the request of the American government, which is seeking to extradite her. The action escalated what had already been a roller-coaster year of economic conflict between the two powers, ahead of tricky negotiations to end a brutal trade war.

Huawei has said that it is not aware of any wrongdoing by Ms. Meng, and China’s Foreign Ministry has called for her immediate release.

But on Friday, in a bail hearing in British Columbia’s Supreme Court, Canadian authorities said Ms. Meng was accused of fraud. They said she had “direct involvement” with Huawei’s representations to banks, telling at least one financial executive that Huawei and Skycom were operating in Iran in strict compliance with United States sanctions when that was not the case.

Larry Kudlow, director of the White House’s National Economic Council, said on CNBC on Friday that the United States had repeatedly warned Huawei about violating sanctions on Iran.

“We have these sanctions on Iran, it runs against our policy, why shouldn’t we enforce that?” he said.

For years, Ms. Meng’s name has appeared in connection with Huawei’s business in Iran, the subject of a yearslong United States investigation.

Reuters reported several years ago that Skycom, one of Huawei’s partners in that country, had tried to sell Hewlett-Packard equipment to an Iranian telecom carrier in 2010. The sale, which Huawei said was never completed, would have violated Washington’s ban on exporting computer products to Iran.

Huawei said at the time that its Iranian business was entirely lawful, and that it required its local partners to heed the same laws and regulations.

According to Hong Kong corporate filings, Ms. Meng was a member of Skycom’s board from February 2008 to April 2009.

In a May 2007 filing, Skycom reported that all of the company’s shares had been transferred that year to a Hong Kong company called Hua Ying Management. In August 2007, Hua Ying reported to the Hong Kong authorities that its company secretary was Ms. Meng.

Ms. Meng, who started at Huawei as a secretary 25 years ago, is not its most prominent executive. But as chief financial officer, she has played a part in the company’s efforts over the past five years to become more transparent about its operations. After United States lawmakers labeled Huawei and another Chinese manufacturer, ZTE, as security threats, Huawei saw openness as a way to help dispel the swirl of suspicions surrounding it.

Some of the distrust has had to do with Ms. Meng’s powerful and secretive father.

Mr. Ren, 74, was a member of the Chinese military’s engineering corps for nearly a decade before starting Huawei in 1987. His military service has informed American officials’ concerns that Huawei has links to the Chinese government or the Communist Party — something the company has strenuously denied.

“She’s very presentable,” Duncan Clark, the chairman of the advisory firm BDA China, who once did consulting work for Huawei, said of Ms. Meng.

That is a stark contrast with her father, Mr. Clark added. “He is, for me at least, refreshingly unpolished and direct.”

For many people in China, Huawei represents how far their nation has come since it began climbing out of the economic ravages left by Chairman Mao — and how far it can continue to go.

Over the past three decades, Huawei has transformed from a small maker of telephone switches into the world’s largest supplier of telecommunications equipment, as well as the No. 2 smartphone maker, behind Samsung. The company has worked to build a consumer brand associated with quality and innovation. The name “Huawei” means “China’s Achievement.”

But after winning over cellular providers across the developing world with its cost-effective networking gear, the company faced a tougher task convincing large carriers in the wealthier nations of Europe and North America.

For many years, Mr. Ren’s reluctance to appear in public, combined with the company’s aversion to the news media, even after it had become a globe-straddling giant, fed the impression that he and Huawei had something to hide. How much of the company did he own? How did key decisions get made? Could there really be a military link?

Ms. Meng became part of an attempt to address such issues in January 2013, when she was brought before reporters in Beijing to discuss Huawei’s business outlook. The company, which is privately held, had published some financial details before. But it had never held a news conference of this kind.

“We will honor our commitment to transparency and openness,” Ms. Meng said then.

This commitment has failed to persuade the United States government that Huawei’s products are safe to use, but the company has become a supplier to many of Europe’s telecom providers.

This year, Ms. Meng was made Huawei’s deputy chairwoman in addition to finance chief, leading some to wonder whether she might succeed her father at the top someday. But hers was not an heiress’s upbringing.

Ms. Meng, who also uses the names Sabrina and Cathy, was born in 1972 in the western city of Chengdu, to Mr. Ren’s first wife, Meng Jun. The family moved to Shenzhen, in China’s south, during the turbulent economic reforms of the 1980s.

Shenzhen eventually became a hub of China’s mighty manufacturing base and home to Huawei’s global headquarters. Back then, it was a backwater.

As Ms. Meng later recalled in a Huawei employee newspaper, the walls of the family’s house let in all the neighbors’ chatter. The roof leaked. When it rained — which it did constantly in southern China — everything got wet.

After college, Ms. Meng hoped to attend graduate school in the United States. A university gave her an offer, she recalled in a 2016 speech. But her visa was rejected because an American consular interviewer decided that her English was too poor.

Ms. Meng found a job at a bank instead. She was laid off after a year. In 1993, she joined fledgling Huawei as one of its three secretaries.

She answered the phone, printed out documents and put together product catalogs. A few years later, after completing a master’s degree in management, she returned to Huawei, this time in the finance department. And she began climbing the ladder.

As Huawei’s business spread across the world in the 2000s, Ms. Meng helped expand its accounting operations with it. Her brother, Ren Ping, works for a Huawei-owned company. Annabel Yao, a daughter of the elder Mr. Ren by his second wife, is an undergraduate at Harvard.

December 7th, 2018

M&A wrap Friday | Mergers & Acquisitions


Photo credit: Bloomberg News

SoftBank has hired former Facebook Inc. (Nasdaq: FB) executive Kirthiga Reddy as a partner at its $100 billion Vision Fund, the first woman to join a group of just a dozen that oversees the world’s biggest pool of technology investments, reports Bloomberg News. Reddy has joined SoftBank Investment Advisors, which manages the giant fund globally, to focus on frontier and enterprise technology globally, according to a SoftBank representative. Reddy had worked at Facebook in India and the U.S. for eight years and serves as chair of the Stanford Business School Management Board, according to her LinkedIn page. She joins a crew that is helping SoftBank Group Corp. founder Masayoshi Son orchestrate an unprecedented wave of investment in Silicon Valley, China and beyond. The Vision Fund has committed more than $65 billion to acquire stakes in Uber Technologies Inc., WeWork Cos. and China’s Didi Chuxing. For perspective, in 2016, the entire U.S. venture capital industry invested $75.3 billion, according to the National Venture Capital Association, Bloomberg points out. Read the full story: SoftBank hires first female partner to help manage vision fund

Dealmaking in November continued apace, with Glanbia’s acquisition of Slim-Fast, Grubhub’s deal for Tapingo and DSW’s purchase of Camuto are among the transactions that closed. The mid-term elections were also top of mind. For more on the month, see Glanbia, DSW and Grubhub closed notable deals in November.

For the latest in deal news, see Weekly wrap: Nexstar, Tribune Media, Thoma Bravo, TPG

For our weekly look at private equity firms seeking LPs, see PE fundraising scorecard: Aberdeen, Abry, Apollo, Caryle, KKR

Featured content
Private equity firms are giving back – organizing groceries at food pantries, mentoring students in schools, running races for cancer cures and pitching in at animal shelters. In time for the holidays, Mergers & Acquisitions highlights the philanthropic and volunteering initiatives of 5 PE firms: the Carlyle Group LP (Nasdaq: CG), Frontier Capital, Huron Capital, the Riverside Co. and Star Mountain Capital. At Carlyle, charity starts at the top, with CEO David Rubenstein’s signing of The Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy. Community involvement is more important than ever to today’s work force. Millennials, defined as people born between 1981 and 1996 by the Pew Research Center, are “for sustainability, diversity, inclusion and giving back to the community,” says Carlyle managing director Christopher Ullman. “We are finding this more and more. Yes, we are here to make money, secure retirement for pensioners, but the firm wants to support people’s efforts to make the world a better place.” Frontier Capital supports several causes, including The Miracle League, a baseball organization for people who are mentally and physically challenged. “There’s more to life than work and material things, and our people understand that,” says Frontier managing partner Andrew Lindner. At Detroit-based Huron Capital, the firm’s philanthropic efforts are focused on local groups. “We want to leave our footprint in this community where we live and work while being as helpful as possible,” says partner Gretchen Perkins. “The charitable activities we do as a group, the ability for each employee to influence where Huron’s donations go, and the ability to perform community service during work hours, or receive matching funds for an employee’s personal non-profit passion, all contribute to a portion of an employee’s sense of purpose and contributing to the greater good.” Read the full story, The Big Give.

We asked dealmakers at ACG Philadelphia’s M&A East to share their thoughts on Giving Back. Check out our video interview with Baker Tilly Capital’s Judit Nagy-Eichelber: Volunteer work brings teams together. Also watch our conversation with Reed Smith’s Jonathan Moyer: For millennial dealmakers, giving back is part of who they are.

Holiday shopping is in full swing, and the the pressure on retailers is more intense than ever. Consumers are choosing retailers that match their values. For example, Canadian retail giant Empire Company Ltd. (TSE: EMP.A) has agreed to buy fast-growing farm-to-table grocer Farm Boy for $800 million from Boston private equity firm Berkshire Partners LLC. Farm Boy offers fresh, ready-to-eat and private label offerings are particularly appealing to urban and suburban consumers. Technology is driving many of the transactions. Best Buy Co. (NYSE: BBY) recently agreed to spend $800 million to buy GreatCall, a provider of emergency response services for seniors, from Chicago private equity firm GTCR. Meanwhile, GreatCall announced a partnership with on-demand transportation provider Lyft to make it easier for seniors to get car service. “Many of the challenges that retailers are currently facing are due more to a lack of innovation and investment in technology, and that they are not able to compete with Amazon,” said Alex Monahan, a consumer products senior analyst at tax and consulting firm RSM US LLP. “Investors want to see that retailers are adjusting to consumer’s changing preferences and striving to provide seamless multi-channel experiences, while also investing in technology to address the tight labor markets.” Amazon, Walmart, Ikea, Bed, Bath & Beyond and Farm Boy are among the retailers turning to M&A. For more, see 5 trends driving retail M&A.

The Tennessee Titans beat the Jacksonville Jaguars Thursday night. Off the field, many football players are building companies. New England Patriots quarterback Tom Brady recently teamed with former Giants defensive end Michael Strahan, who is the co-host of ABC’s Good Morning America, to launch a sports media startup called Religion of Sports Media, which has raised $3 million in venture capital funding from CourtsideVC and Advancit Capital. Muhsin Muhammad, who played wide receiver for the Carolina Panthersand the Chicago Bears, is a managing director of private equity firm Axum Capital Partners. Steve Young, former San Francisco 49ers quarterback, is a co-founder of private equity firm HGGC. View our slideshow, NFL stars Tom Brady, Michael Strahan, Steve Young go PE.

Events
ACG New York Women of Leadership Summit brings together women in the middle-market dealmaking community for a day focused on networking and knowledge sharing on Jan. 17 at the Intercontinental Barclay Hotel. Alexa Von Tobel, chief innovation officer of Northwestern Mutual, keynotes.

Exponent Women kicks off the new year with an evening of networking on Jan. 24 at The Campbell, at New York’s Grand Central Terminal. Jazz Age financier John W. Campbellconverted the space to his private office and reception hall in 1923, and it has recently been restored by design firm Ingrao Inc.

ACG Boston, ACG Connecticut, ACG New Jersey, ACG New York & ACG Philadelphia host ACG Northeast Dealmaking at the Mountain at Stowe Mountain Resort in Stowe, Vermont Jan. 27-29. The event provides a chance for middle-market M&A professionals from across the northeast to come together for two days of close knit networking, shared conversations and valuable time spent to deepen your relationships within the deal community.


Mary Kathleen Flynn

Mary Kathleen Flynn

Mary Kathleen Flynn joined SourceMedia in 2011, serving as the Editor-in-Chief of Mergers & Acquisitions. MK oversees the brand’s content on all media platforms, including website, e-newsletters, video, slideshows, podcasts and print.


Demitri Diakantonis

Demitri Diakantonis

Demitri Diakantonis joined SourceMedia in 2015 and serves as Managing Editor of Mergers & Acquisitions. He covers all aspects of middle-market dealmaking, with a focus on strategic buyers and the consumer and retail sectors, and writes The Buyside column.

December 7th, 2018

SoftBank hires first female partner to help manage vision fund

SoftBank hired Facebook executive Kirthiga Reddy as a partner at its $100 billion Vision Fund, the first woman to join a group of just a dozen that oversees the world’s biggest pool of technology investments.

Reddy has joined SoftBank Investment Advisors, which manages the giant fund globally, to focus on frontier and enterprise technology globally, according to a SoftBank spokeswoman. She will work closely with Senior Managing Partner Deep Nishar, the spokeswoman added. Reddy had worked at Facebook in India and the U.S. for eight years and serves as chair of the Stanford Business School Management Board, according to her LinkedIn page.

Signage for SoftBank is displayed outside a store in Tokyo.

Bloomberg News

Reddy is joining a crew that’s helped SoftBank Group Corp. founder Masayoshi Son orchestrate an unprecedented wave of investment in Silicon Valley, China and beyond. The Vision Fund has committed more than $65 billion to acquire stakes in the likes of Uber Technologies Inc., WeWork Cos. and China’s Didi Chuxing. For perspective, in 2016, the entire U.S. venture capital industry invested $75.3 billion, according to the National Venture Capital Association.

In an interview in September, Son was asked about the fact that all the Vision Fund partners were men and he said he has “no prejudice of any kind.” Vision Fund head Rajeev Misra had been leading an effort to hire more women, including at the managing partner level.

Reddy will become the fund’s first venture partner and will be investing. SoftBank said she may become what it calls an investing partner, depending in part on her desire to devote 100 percent of her time to such activity. SoftBank said that it intends to hire more female investors, particularly at the more senior levels, and it is “actively recruiting.”

Son plans to raise a new $100 billion fund every two or three years and will spend around $50 billion a year. To help oversee that money, he said that he wanted to increase the number of dealmakers from about 30 to 300 over the next few years.

Managing partners filter potential investment ideas and hold a weekly call to discuss progress. Once the prospects are vetted, they go to an internal investment committee that includes Son.

Bloomberg News

December 7th, 2018

The Housing Boom Is Already Gigantic. How Long Can It Last?

We are, once again, experiencing one of the greatest housing booms in United States history.

How long this will last and where it is heading next are impossible to know now.

But it is time to take notice: My data shows that this is the United States’ third biggest housing boom in the modern era.

Since February 2012, when the price declines associated with the last financial crisis ended, prices for existing homes in the United States have been rising steadily and enormously. According to the S&P/CoreLogic/Case-Shiller National Home Price Index (which I helped to create) as of September, the prices were 53 percent higher than they were at the bottom of the market in 2012.

That means, on average, a house that sold for, say, $200,000 in 2012 would bring over $300,000 in September.

Even after factoring in Consumer Price Index inflation, real existing home prices were up almost 40 percent during that period. That is a substantial increase in less than seven years.

In fact, based on my data, it amounts to the third strongest national boom in real terms since the Consumer Price Index began in 1913, behind only the explosive run-up in prices that led to the great financial crisis of a decade ago, and one connected with World War II and the great postwar Baby Boom.

The No. 1 boom occurred from February 1997 to October 2006, when real prices of existing United States homes rose 74 percent. This was a period of intense speculative enthusiasm — for houses and for financial instruments based on mortgages as investments — and it was also a time of great regulatory complacency. The term “flipping houses” became popular then. People exploited the boom by buying homes and selling them only months later at a huge profit.

That boom ended disastrously. Soaring valuations collapsed with a 35 percent drop in real prices for existing homes, ushering in the financial crisis that enveloped the world in 2008 and 2009.

The second greatest boom, from 1942 to 1947, had more benign consequences. Over this five-year interval, real prices of existing homes rose 60 percent.

Booms and busts are rooted in popular narratives with complex social-psychological roots. This boom centered on a war-induced housing shortage, an enormous increase in the number of new babies and families who would need housing after the war, and the 1944 G.I. Bill, which subsidized home-buying by veterans. Home prices did not fall significantly after this boom ended.

Today, signs of weakness in the housing market are being taken by some as a signal that the prices of single-family homes may fall soon, as they did sharply after 2006. The leading indicators, which include building permits and sales of both existing and new homes, have all been declining in recent months.

But with few examples of extreme booms, we cannot be sure what such indicators mean for the current market.

Low interest rates — imposed by the Federal Reserve and other central banks in reaction to the financial crisis — are the most popular culprit in the current boom. There is some apparent merit to this view, since these three biggest nationwide housing booms all included very low interest rates.

But the market reaction to interest rates is hardly immediate or predictable. The housing market does not react as directly as you might expect to interest rate movements. Over the nearly seven years of the current boom, from February 2012 to the present, all major domestic interest rates have increased, not decreased. So, while interest rates have been low, they have moved the wrong way, yet the boom has continued.

Another explanation is simple economic growth. But, as a matter of history, prices of existing homes — as opposed to the supply of newly built homes — have generally not responded to economic growth. There was only a 20 percent increase in real prices of existing homes in the 50 years from 1950 to 2000 despite a sixfold increase in real G.D.P.

The simplest narrative being given for the current boom is just that the 2008-2009 financial crisis and the so-called Great Recession are over and home prices are returning to normal.

But that explanation does not cut it either. In September they were 11 percent higher than at the 2006 peak in nominal terms, and almost as high in real terms. This is not a return to normal, but a market that appears to be rising to a record.

It is difficult to assess the contribution of President Trump to the current boom.

It is certainly less obvious than the role of President George W. Bush in the 1997-2006 boom. Mr. Bush extolled the benefits of “the ownership society” and in 2003 he signed the American Dream Downpayment Act, which subsidized home purchases. In his 2004 re-election bid he boldly asserted: “We want more people owning their own home.” This seems to have contributed to an atmosphere of high expectations for home price increases.

The Trump administration’s attitude toward housing is less clear. President Trump’s slogan “Make America Great Again” has overtones of the “American dream.” But provisions of his Tax Reform and Jobs Act of 2017 were unfriendly to homeowners.

Even without major further interest rate increases, there would seem to be a limit on how much the prices of existing homes can increase. After all, people must struggle to cover a range of living expenses, and builders are supplying fresh new offerings to compete with the existing houses on the market.

Perhaps the home price increases are now a self-fulfilling prophesy. As John Maynard Keynes argued in his 1936 “General Theory of Employment, Interest and Money,” people seem to have a “simple faith in the conventional basis of valuation.”

If the conventional basis is now that home prices are going up 5 percent a year, then sellers, who would otherwise have no idea what to ask for their houses, will just put a price based on this convention. And likewise buyers will not feel they are paying too much if they accept the convention. In the United States, we may believe that the process is all part of the “American dream.”

It can’t go on forever, of course. But when it will end isn’t knowable. The data can’t tell us when prices will level off, or whether they will plunge catastrophically. All we do know is that prices have been roaring higher at a speed rarely seen in American history.

December 7th, 2018

Glanbia, DSW and Grubhub closed notable deals in November

Key Middle-Market M&A Deals Completed in November 2018 Date Acquirer Target Target Industry 11/02/18 Eagleclaw Midstream Svcs Llc Caprock Midstream LLC Oil and Gas; Petroleum Refining 11/08/18 Invesco Real Estate Ltd URW-Capital 8 Real Estate; Mortgage Bankers and Brokers 11/02/18 Repsol S.A. Viesgo-Low-Emissions Asts Electric, Gas, and Water Distribution 11/23/18 Shareholders Nyfosa AB Investment & Commodity Firms,Dealers,Exchanges 11/09/18 Contura Energy Inc Alpha Natural Resources Inc Mining 11/01/18 Capitaland Mall Trust Infinity Mall Tr Investment & Commodity Firms,Dealers,Exchanges 11/01/18 Toronto-Dominion Bank Greystone Capital Management Insurance 11/27/18 Investor Group Multifamily Portfolio,NC(8) Real Estate; Mortgage Bankers and Brokers 11/07/18 Enefit Green AS Nelja Energia AS Electric, Gas, and Water Distribution 11/27/18 Ningbo Urban Tourism Invest Ningbo Chengtou Ppty Co Ltd Real Estate; Mortgage Bankers and Brokers 11/15/18 Helaba Invest Aif Beos Corporate Re Fund Investment & Commodity Firms,Dealers,Exchanges 11/02/18 Hyeonjong Pk Fran Svcs Asia Ltd Business Services 11/01/18 AMETEK Inc Telular Corp Communications Equipment 11/28/18 Qixing Furture (Tianjin) Educ Beijing My Gym Educ Tech Co Social Services 11/08/18 Orsted A/S Deepwater Wind Electric, Gas, and Water Distribution 11/01/18 HP Inc Apogee Corp Ltd Business Services 11/27/18 Gurnet Point Capital Ltd Corium International Inc Drugs 11/30/18 Cigna Corp OnePath Life(NZ)Ltd Insurance 11/15/18 Brooks Automation Inc Genewiz Inc Business Services 11/01/18 Enable Midstream Partners LP Velocity Holdings LLC Oil and Gas; Petroleum Refining 11/01/18 Applegreen PLC Appia Group Ltd Retail Trade-Eating and Drinking Places 11/12/18 Computershare Ltd Equatex AG Prepackaged Software 11/29/18 Swire Pacific Ltd Hong Kong Aircraft Business Services 11/07/18 Centuria Capital Ltd Hines Global REIT-Buildings(3) Real Estate; Mortgage Bankers and Brokers 11/13/18 Investor Group Atton Hoteles SA Hotels and Casinos 11/13/18 Sodra Bergvik Skog SIA,Ruda SIA Agriculture, Forestry, and Fishing 11/16/18 Elite UK Commercial Ltd Telereal Trillium-Hayhill Port Real Estate; Mortgage Bankers and Brokers 11/02/18 Vonage Holdings Corp NewVoiceMedia Ltd Business Services 11/19/18 Glanbia PLC Slim-Fast Foods Co Food and Kindred Products 11/07/18 Investor Group Mega-Info Media Co Ltd Advertising Services 11/26/18 Canopy Growth Corp ebbu LLC Drugs 11/20/18 Lagardere Travel Retail SASU Hojeij Branded Foods Inc Retail Trade-Eating and Drinking Places 11/12/18 Celestica Inc Impakt Holdings LLC Electronic and Electrical Equipment 11/05/18 Cerberus Capital Management LP TE Connectivity-Subsea Comms b Construction Firms 11/13/18 Mande Invest Co Ltd Microlife Corp Measuring, Medical, Photo Equipment; Clocks 11/23/18 Robinsons Retail Holdings Inc Rustans Supercenters Inc Retail Trade-Food Stores 11/06/18 DSW Inc Camuto Group Inc Leather and Leather Products 11/15/18 Valero Renewables Fuels Co LLC Green Plains Inc-Plants(3) Chemicals and Allied Products 11/15/18 Landcadia Holdings Inc Waitr Inc Prepackaged Software 11/29/18 Prudential Property Investment Highcross Shopping Centre Real Estate; Mortgage Bankers and Brokers 11/16/18 PayPal Holdings Inc Hyperwallet Systems Inc Business Services 11/09/18 Matlin & Partners Acq Corp US Well Services LLC Oil and Gas; Petroleum Refining 11/19/18 Empsa Nacl De Energia Enex SA Road Ranger LLC Retail Trade-Food Stores 11/20/18 HH CT Hldg Ltd Genor Biopharma Drugs 11/15/18 Banco Bilbao Vizcaya Merlin Ppty Socimi Sa-Bk(166) Commercial Banks, Bank Holding Companies 11/26/18 POSCO Co Ltd Galaxy Resources-Salar Del Hom Mining 11/27/18 Castellana Ppty SOCIMI SA Morzal Properties Iberia SL Investment & Commodity Firms,Dealers,Exchanges 11/30/18 SP Plus Corp Baggage Airline Guest Svcs Air Transportation and Shipping 11/30/18 Chifeng Jilong Gold Mining Co Mmg Laos Hldg Ltd Investment & Commodity Firms,Dealers,Exchanges 11/26/18 Grupa Azoty SA Goat Topco Gmbh Agriculture, Forestry, and Fishing 11/01/18 Ascential PLC Flywheel Digital LLC Business Services 11/01/18 Continental AG Tyre & Auto Pty Ltd Repair Services 11/15/18 Tidewater Inc GulfMark Offshore Inc Oil and Gas; Petroleum Refining 11/09/18 Yifeng Pharmacy Chain Co Ltd Shijiazhuang Xinxing Chain Miscellaneous Retail Trade 11/14/18 Agilent Technologies Inc Acea Biosciences Inc Measuring, Medical, Photo Equipment; Clocks 11/30/18 Global Bank Corp Banco Panameno de la Vivienda Commercial Banks, Bank Holding Companies 11/01/18 Lime Rock Resources Conocophillips Co-Barnett Oil and Gas; Petroleum Refining 11/01/18 Carr Ppty Inc Newmark Group Inc-200 State St Real Estate; Mortgage Bankers and Brokers 11/30/18 Ence Energia SL Iberdrola Energia Puertollano Electric, Gas, and Water Distribution 11/21/18 Skyline Renewables Llc NJR Clean Energy Ventures-117 Electric, Gas, and Water Distribution 11/22/18 Aurora Cannabis Inc ICC Labs Inc Drugs 11/05/18 Huadong Medicine Aesthetics In Sinclair IS Pharma PLC Drugs 11/15/18 Citrix Systems Inc Sapho Inc Prepackaged Software 11/01/18 John Wiley & Sons Inc The Learning House Inc Educational Services 11/27/18 Shaanxi Yanchang Petro Chem Beijing Petrochem Engineering Business Services 11/07/18 Charter Hall Group QIC Ltd-61 Mary Street Brisban Real Estate; Mortgage Bankers and Brokers 11/01/18 Banner Corp Skagit Bancorp Inc Commercial Banks, Bank Holding Companies 11/01/18 Investor Group Meredith Corp-Time Media Brand Printing, Publishing, and Allied Services 11/27/18 AMETEK Inc Spectro Scientific Inc Measuring, Medical, Photo Equipment; Clocks 11/09/18 DR Horton Inc Wport Homes Inc-Homebldg Op Construction Firms 11/09/18 Grupo Catalana Occidente SA Antares SA Insurance 11/20/18 Growthpoint Ppty Australia Ltd 100 Skyring Terrace Real Estate; Mortgage Bankers and Brokers 11/30/18 Gas Services NZ Midco Ltd Rockgas Ltd Wholesale Trade-Nondurable Goods 11/27/18 Investor Group KidsFoundation Holdings Social Services 11/06/18 Quest Diagnostics Inc Oxford Immunotec-lab svcs busi Health Services 11/13/18 Maple Leaf Foods Inc Les Produits Alimentaires Viau Food and Kindred Products 11/16/18 Guangdong Dowstone Tech Co Ltd Guangdong Jiana Energy Tech Metal and Metal Products 11/01/18 Edgewater Technology Inc Alithya Consulting Inc Business Services 11/05/18 Yuan Longping High-Tech Beijing Lantron Seed Corp Agriculture, Forestry, and Fishing 11/23/18 North American Constr Group Aecon Grp-Contract Mining Bus Mining 11/05/18 Chilena Consolidada Seguros Euroamerica Administradora Insurance 11/24/18 Investor Group Xinjiang Zhongtai Finl Credit Institutions 11/07/18 Grubhub Inc Tapingo Inc Prepackaged Software 11/05/18 KLX Energy Svcs LLC Motley Services Inc Oil and Gas; Petroleum Refining 11/23/18 Cynergy Capital Ltd Bank of Cyprus UK Ltd Commercial Banks, Bank Holding Companies 11/01/18 AquaVenture Holdings Ltd AUC Acquisitions Holdings LLC Sanitary Services 11/27/18 DEPA Attiki Gas Distribution Co SA Electric, Gas, and Water Distribution 11/01/18 Dunes Point Capital LLC Foundation Bldg Matl-Mech Wholesale Trade-Durable Goods 11/30/18 Wuhu Ningzhong Auto Parts Wuhu Shunrong Auto Parts Co Electronic and Electrical Equipment 11/23/18 Zhejiang Starry Pharm Co Ltd Zhejiang Hisyn Pharm Co Ltd Drugs 11/06/18 General American Capital Partn FC Girondins de Bordeaux Amusement and Recreation Services 11/09/18 NVC Lighting Holding Ltd Elec-Tech Solid State Electronic and Electrical Equipment 11/08/18 Forescout Technologies Inc SecurityMatters BV Prepackaged Software 11/06/18 Longfellow RE Partners LLC Parallel Cap Part-Sorrento(12) Real Estate; Mortgage Bankers and Brokers 11/15/18 GSL Sub One LLC Poseidon Containers Hldg LLC Transportation and Shipping (except air) 11/06/18 E*TRADE Financial Corp Capital One Finl Corp- Ret Real Estate; Mortgage Bankers and Brokers 11/30/18 Asahi Kasei Homes Corp Erickson Construction Co Inc Construction Firms 11/27/18 AEW Capital Management LP 19 Harris Street,Pyrmont Real Estate; Mortgage Bankers and Brokers 11/07/18 Velvet Energy Ltd Iron Bridge Resources Inc Oil and Gas; Petroleum Refining 11/24/18 Severn-Cultivation Hotel Mgmt Tibet Tourism Co Ltd-Assets Hotels and Casinos
December 7th, 2018

DealBook Briefing: The Tech I.P.O. Rush Starts … Now!

It might depend on the starting point. Barry B. Bannister, head of institutional equity strategy at Stifel, tells Peter Eavis of DealBook that the Fed’s main policy rate, the federal funds rate, was in effect significantly lower in the years after the 2008 financial crisis than the actual rate.

Call it the shadow rate. “The economists Jing Cynthia Wu and Fan Dora Xia used the yields on government bonds to calculate a shadow fed funds rate. Their intent was to estimate what that rate would have been if it could have fallen below zero,” Mr. Eavis writes. “In the years after the crisis, this shadow rate fell as low as minus 3 percent in May 2014.”

Why that matters now. “The Fed has taken the fed funds rate from zero in 2015 to 2.25 percent today. But using the shadow rate, the Fed has effectively taken that rate from minus 3 percent in mid-2014 up to 2.25 percent today, a much greater increase, and one that might now be pressuring the economy.”

A note of caution: From a growing G.D.P. to healthy loan issuance, there are still plenty of reasons to question whether monetary policy is really too stringent.

Hannah Karp, a former reporter at The Wall Street Journal, has been appointed as the new editorial director at Billboard magazine.

James Quincey, Coca-Cola’s chief executive, will now also serve as its chairman.

Tesla’s general counsel, Todd Maron, is leaving the company. He will be succeeded by Dane Butswinkas, a Washington trial lawyer.

Unilever’s chief marketing officer, Keith Weed, will retire in May.

Deals

• Anta, China’s largest sportswear brand by revenue, is reportedly close to a $6.3 billion deal to acquire Finland’s Amer Sports, which owns brands like Salomon and Louisville Slugger. (FT)