Jul 20, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

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Top of the Morning

Illustration: Aïda Amer/Axios

For Corporate America, this is the least and most consequential of times.

  • Least: We're in the midst of earnings season, but most investors long ago wrote off Q2 results as pandemic-marred aberrations.
  • Most: The Senate today begins its sprint toward a phase 4 stimulus bill, ahead of its August recess. This legislation could impact earnings long after investors stop granting mulligans.

The original CARES Act was a bold and bipartisan effort to get us through to August, when the virus was expected to be under control. But then we blew it, frittering away the time for which we paid trillions.

  • There are major disagreements between Democrats and Republicans over what should be in the new stimulus, including issues like business liability protections, non-school state and local funding, and payroll tax cuts.

It's unclear if there will be a new Paycheck Protection Program for small businesses that already received loans but need new ones to survive.

  • Some questions remain about the existing PPP, with Axios learning that Sens. Chris Van Hollen (D-Md.) and Mike Rounds (R-S.D.) today will send a letter to Treasury officials, asking for clarification on if small businesses and nonprofits that previously returned PPP loans are allowed to reapply.
  • It's something that an SBA spokesman official told me in May, but which hasn't been codified.

The bottom line: Congress' first efforts at stimulus proved to be bridges to nowhere. The hope for its new efforts is that they're long enough to bring us to the other side, whether that means a vaccine or newfound governmental competence.

The BFD

Illustration: Sarah Grillo/Axios

Chevron (NYSE: CVX) agreed to buy Houston-based Noble Energy (Nasdaq: NBL) for $5 billion in stock.

  • Why it's the BFD: It's the year's largest energy sector merger, and comes amidst relatively low oil prices.
  • Details: The deal values each Noble share at $10.38 (7.5% premium to Friday's close), and all of Noble at around $13 billion (including debt).
  • Flashback: Chevron in April 2019 agreed to buy oil independent Anadarko for $33 billion, but later got beaten out by Occidental.
  • The bottom line: "This deal will expand Chevron’s footprint in the U.S. shale patch, where the company is competing with U.S. rival ExxonMobil, and elsewhere via Noble’s operations in the Mediterranean Sea and West Africa." — Ben Geman, Axios
Venture Capital Deals

Xpeng Motors, a Chinese electric vehicle maker, raised around $500 million in Series C+ funding from Aspex, Coatue, Hillhouse Capital and Sequoia Capital China. http://axios.link/Vtmr

Coursera, a Mountain View, Calif.-based online learning company, raised $130 million in Series E funding at around a $2.5 billion valuation led by return backer NEA. http://axios.link/x5sO

Ready, Set, Food, a Los Angeles-based childhood food allergy prevention startup, raised $3 million in second round funding from Danone Manifesto Ventures, Mark Cuban. and AF Ventures. www.readysetfood.com

PolicyBazaar, an Indian lending marketplace and digital insurer backed by SoftBank Vision Fund, is seeking to raise $250 million in pre-IPO funding at a $2 billion-plus valuation, per Bloomberg. http://axios.link/8xWl

Private Equity Deals

Aquiline Capital Partners invested in Dutch insurance broker Quintes Holding.

Bridgepoint approached the English Football Association about buying a large minority stake in the Women’s Super League, per Sky News. http://axios.link/H9FG

Bruin E&P Partners, a North Dakota-based energy company owned by ArcLight Capital Partners, filed for prepackaged Chapter 11 bankruptcy protection. The company previously formed a special committee to investigate a 2018 dividend recap. http://axios.link/HN1J

Datto, a Norwalk, Conn.-based data protection software company owned by Vista Equity Partners, acquired Gluh, an Australian provider of software procurement services. http://axios.link/gCpW

Eze Castle Integration, a Boston-based portfolio company of H.I.G. Capital, acquired Alphaserve Technologies, a New York-based provider of infrastructure technology and digital IT services. www.eci.com

KPS Capital Partners agreed to buy the assets of Briggs & Stratton (NYSE: BGG), a century-old Wisconsin maker of small gasoline engines, out of bankruptcy protection for $550 million.

Perforce Software, a Minneapolis-based portfolio company of Clearlake Capital Group and Francisco Partners, acquired Methodics, a San Francisco-based provider of enterprise IP lifecycle management and traceability solutions. www.perforce.com

Thoma Bravo agreed to acquire Majesco (Nasdaq: MJCO), a Morristown, N.J.-based provider of cloud software for insurance businesses, for $594 million. www.majesco.com

Public Offerings

Four companies and one SPAC plan to price IPOs this week: Jamf, Montrose Environmental, ACell, Skillfull Craftman, and Property Solutions Acquisition. http://axios.link/wl5e

🚑 Annexon Biosciences, a South San Francisco-based antibodies maker, set IPO terms to 10 million shares at $14-$16. The pre-revenue company would have a market cap of $313 million, were it to price in the middle, and plans to list on the Nasdaq (ANNX) with JPMorgan as lead underwriter. It recently raised $100 million in Series D funding led by Redmile Group. http://axios.link/lLHo

Ant Financial, the fin-tech unit of Alibaba Group (NYSE: BABA), said it’s begun the process of a dual listing in Hong Kong and Shanghai. Reuters recently reported on the plans, which the company at the time denied. http://axios.link/HLsu

BowX Acquisition, a SPAC formed by Sacramento Kings owner and Bow Capital founder Vivek Ranadivé, filed for a $350 million IPO. http://axios.link/pit3

🚑 Checkmate Pharma, a Cambridge, Mass.-based biotech focused on solid tumors, filed for a $75 million IPO. The pre-revenue company plans to list on the Nasdaq (CMPI) with BofA as lead underwriter, and raised $170 million in VC funding from Sofinnova Ventures (21.1% pre-IPO stake), VenBio (21.1%), Novo Holdings (10.2%), Longitude Venture Partners (8.9%), Decheng Capital (7.5%), F-Prime (5.6%), Medixi (5.1%), and Omega Fund (5.1%). http://axios.link/osK1

🚑 Freeline Therapeutics, a London-based gene therapy startup focused on liver expression, filed for a $100 million IPO. It plans to list on the Nasdaq (FRLN) with JPMorgan as lead underwriter, and raised $290 million from backers like Syncona and Novo Holdings. http://axios.link/W4Xu

Holicity, a TMT-focused SPAC led by telecom exec Craig McCaw, filed for a $250 million IPO. http://axios.link/ampu

🚑 Inozyme, a Boston-based developer of treatments for mineralization disorders, set IPO terms to 5 million shares at $14-$16. The pre-revenue company would have a market cap of $305 million, were it to price in the middle, plans to list on the Nasdaq (INZY), and raised $115 million from Longitude Venture Partners (15.6% pre-IPO stake), NEA (15.6%), Novo Holdings (15.6%), Sofinnova Ventures (11.3%), Pivotal bioVentures (10%), RA Capital Management (10%), and Cowen Healthcare (6%). http://axios.link/KE4Y

🚑 Nurix Therapeutics, a San Francisco-based oncology biotech, set IPO terms to 8.8 million shares at $16-$18. It would have a market cap of $592 million, were it to price in the middle million IPO, plans to list on the Nasdaq (NRIX) with J.P. Morgan as lead underwriter, and raised $224 million in VC funding from such firms as The Column Group (26% pre-IPO stake), Third Rock Ventures (20.9%), and Foresite Capital (7.5%). http://axios.link/10fq

Vertex, a King of Prussia, Penn.-based provider of business tax software, set IPO terms to 21.15 million shares at $14-$16. It would have a market cap of $2.15 billion, were it to price in the middle, and plans to list on the Nasdaq (VERX) with Goldman Sachs and Morgan Stanley as lead underwriters. The company reports $7.3 million of net income on $75 million in revenue for Q1 2020. http://axios.link/PeQk

Yucaipa Acquisition, a SPAC led by private equity exec Ron Burkle, filed for a $300 million IPO. http://axios.link/0jtD

Liquidity Events

Penske Media, which owns both Deadline and Variety, is in talks to buy The Hollywood Reporter from a portfolio company of Eldridge Industries, per LA Magazine. http://axios.link/1UnW

Topgolf International, a Dallas-based operator of driving range centers, is in talks to go public via a reverse merger with a Michael Klein-led SPAC, per Bloomberg. Current shareholders include Providence Equity Partners, Dundon Capital, WestRiver Group, Callaway Golf, and Fidelity. http://axios.link/TpGg

More M&A

Adevinta, a Norwegian classifieds firm, won the auction for eBay's (Nasdaq: EBAY) classifieds unit with a bid of nearly $9 billion, per Reuters. EBay is expected to maintain a minority stake. http://axios.link/lHoW

🚑 GlaxoSmithKline (LSE: GSK) agreed to buy a 10% stake in CureVac, a German biotech working on a COVID-19 vaccine, for around $164 million. http://axios.link/7cQa

🚑 Grifols, a Spanish pharma group, agreed to buy the North American plasma assets of South Korea’s Green Cross for $460 million. http://axios.link/5qXN

I&M Holdings, a listed Kenyan lender, agreed to buy a 90% stake in Orient Bank Uganda. http://axios.link/4CdY

• Rosetta Stone (NYSE: RST) is considering strategic alternatives, including a possible sale, per Bloomberg. The language learning software provider has a market cap of nearly $500 million. http://axios.link/Uwfv

Yamana Gold (TSX: TRI), a Canadian precious metals company, said it’s prepping a London Stock Exchange listing. http://axios.link/92Rx

Fundraising

The Blackstone Group raised $3.75 billion for its third infrastructure secondaries fund. www.blackstone.com

Mountain Capital, a turnaround firm focused on the oil and gas industry, secured around $500 million for its $650 million-targeted second fund, per Buyouts. http://axios.link/XsD2

Neotribe Ventures raised $216 million for its second fund. http://axios.link/iBS5

TPG Growth is targeting $4 billion for its fifth fund, per public pension documents. http://axios.link/RQhB

It's Personnel

Laura Krivec joined Z Capital Group as director of corporate development. She previously was with Cambridge Associates. www.zcg.net

Matthew Skurbe joined CC Capital Partners as CFO, COO, and senior managing director. He previously was The Blackstone Group’s treasurer and managing director of finance. www.cc.capital

VMG Partners, a consumer-focused private equity firm, named four new partners Angad Hira (who also remains CFO), Jon Marshall, McConnell Smith, and Alisa Williams. www.vmgpartners.com

Final Numbers
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Data: The COVID Tracking Project, Harvard Global Health Institute; Cartogram: Andrew Witherspoon/Axios

Go deeper: Hospitalization is surging

Dan Primack

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