Aug 24, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

🚨 Situational awareness: TikTok will sue the White House over its executive order that would ban the popular app if it doesn't soon strike a deal to be acquired. The complaint is expected to come later today.

🎧 Axios Re:Cap digs into Robert Smith's tax troubles. Listen via Axios or via Apple.

Top of the Morning

Photo illustration: Sarah Grillo/Axios. Photo: Joe Raedle/Getty Images

The Republican National Convention kicks off today, albeit virtually, with President Trump's campaign just announcing a new set of economic priorities that look very similar to what he ran on in 2016. More jobs, less regulation and taxes, etc.

  • Backdrop: Trump has presided over two economies, pre-pandemic and post-pandemic. He has celebrated the former and despaired of the latter, but not even the pre-pandemic economy lived up to Trump's past promises.

For the record: Axios' Courtenay Brown and I sifted through speech transcripts and other documents from the 2016, to compile a list of Trump's campaign pledges. Then we checked to see what happened.

  • Some goals were met, such as across-the-board tax cuts and renegotiating NAFTA.
  • But the majority were not, even before the pandemic hit. The most notable miss was on GDP growth, but there were also complete whiffs on such things as decreasing the trade deficit, eliminating the national debt, closing the carried interest tax loophole, and getting Apple to make its products in the U.S.
  • You can read our entire piece by going here.

One thing Trump obviously didn't campaign on in 2016 was stemming the scourge of COVID-19, and his new plan includes developing a vaccine by the end of 2020.

  • If successfully developed and distributed, a vaccine would provide more economic fuel than tax cuts or other incentives could possibly provide.
  • But, but, but... Trump may be undercutting the economic benefits through this pledge, making it appear that politics are outpacing the science. If a vaccine is available but too many people don’t trust it, believing it was a campaign prop, then we cannot as easily return to work or school.

The bottom line: Trump's efforts to run on the economy will be muddled.

  • RNC week: Axios tomorrow at 12:30pm ET hosts a live virtual event on North Carolina's economy amidst COVID-19. Register.
The BFD

Illustration: Eniola Odetunde/Axios

Luminar Technologies, a Palo Alto-based developer of auto lidar sensors, agreed to go public via a reverse merger with Gores Metropoulos, a SPAC sponsored by private equity firm the Gores Group.

  • Why it's the BFD: SPACs and futuristic auto tech have become the peanut butter and jelly of the capital markets, able to exist independently but more often found together.
  • Details: The company will have an initial market cap of around $3.4 billion. The deal includes $400 million in cash from Gores Metropoulos, and $170 million from an investor group that includes Peter Thiel, Volvo, Alec Gores, Nick Woodman, Crescent Cove, Moore Strategic Ventures, and VectoIQ.
  • History: Luminar, founded in 2012 by Thiel Fellow Austin Russell, had raised $250 million, most recently last summer at a $900 million valuation, from backers like Canvas Ventures, GVA Capital and 1517 Fund, Corning, Peter Thiel, and Volvo.
  • The bottom line: "Luminar has sprinted ahead of other laser-based detection systems by focusing on long-range, highway driving. Its lidar tech is now ready for prime time, with Volvo Cars announcing in June it will add the system to its next generation of vehicles starting in 2022, helping first with assisted-driving tasks, then enabling full autonomy in the future." — Joann Muller, Axios Navigate
Venture Capital Deals

🚑 One Drop, a New York-based provider of digital solutions for people living with diabetes, raised $34.7 million in Series C funding led by Bayer. One Drop and Bayer also signed a joint development agreement that includes upwards of $64 million in fees and milestone-based payments. www.onedrop.today

Motiv Power Systems, a Foster City, Calif.-based maker of electric truck chasses, raised $15 million from existing backer GMAG Holdings. http://axios.link/Pwwd

Commonstock, a San Francisco-based community platform for retail investors, raised $9.7 million in seed funding from Floodgate, QED Investors, Upside Partnership, and Resolute VC. www.commonstock.com

Perishable Shipping Solutions, a Youngstown, Ohio-based provider of perishable cold and frozen food logistics, raised $8.7 million in Series A funding. SJF Ventures led, and was joined by Grotech Ventures and Supply Chain Ventures. http://axios.link/w6Mb

Synapse, a Toronto-based remote training platform, raised C$2.6 million in seed funding from BDC Capital, Generation Ventures, Differential Ventures, and Ripple Ventures. http://axios.link/Ceho

Private Equity Deals

KKR agreed to buy Citation Group, a British provider of subscription-based HR/employment law and health/safety services to SMEs, from HgCapital. http://axios.link/yxnI

Platinum Equity is in advanced talks to buy Ingram Micro, an Irvine, Calif.-based tech distributor owned by China’s HNA Group, for around $7 billion (including debt), per Bloomberg. http://axios.link/NTL4

🚑 Takeda Pharma (Tokyo: 4205) agreed to sell its Japanese consumer health care business to The Blackstone Group at a unit value of around $2.3 billion. http://axios.link/GhMm

TPG and Warburg Pincus agreed to acquire minority equity stakes in Norwegian enterprise software company Visma, at an enterprise value of $12.2 billion. Earlier reports were that Visma’s existing backers – HgCapital, Montagu Private Equity, and CPPIB – were seeking to sell up to a 20% stake. http://axios.link/2q9e

Public Offerings

🚑 Adicon Clinical Labs, a Chinese lab operator backed by The Carlyle Group, picked Jefferies and Morgan Stanley to lead a Hong Kong IPO that could raise around $400 million, per Bloomberg. http://axios.link/gZNM

Bentley Systems, an Exton, Penn.-based provider of construction and infrastructure project software, filed for a $100 million IPO. Renaissance Capital estimates the actual raise could be closer to $800 million. Bentley plans to trade on the Nasdaq (BSY) with Goldman Sachs as lead underwriter, and reports $69 million of net income on $679 million in revenue for the first half of 2020. Shareholders include Siemens. http://axios.link/SXTR

Corsair Gaming, a Fremont, Calif.-based gaming hardware maker owned by EagleTree Capital, filed for a $100 million IPO. It plans to trade on the Nasdaq (CRSR) with Goldman Sachs as lead underwriter, and reports $24 million of net income on $684 million in revenue for the first half of 2020. http://axios.link/YB0z

Lojas Le Biscuit, a Brazilian home appliances retailer, is prepping a Sao Paulo IPO that could raise around $267 million, per Bloomberg. http://axios.link/XRTz

🚑 Outset Medical, a San Jose, Calif.-based maker of hemodialysis system for kidney diseases, filed for a $100 million IPO. It plans to trade on the Nasdaq (OM) with BAML as lead underwriter, and reports a $47 million net loss on $19 million in revenue for the first half of 2020. The company raised over $500 million in VC funding from firms like Warburg Pincus (28.2% pre-IPO stake), Fidelity (15%), D1 Capital (12.1%), T. Rowe Price (11.7%), Aurora Investment Co. (9.1%), Partner Fund Management (7.5%), and Perceptive Investors (6.5%). http://axios.link/7yuD

• Pactiv Evergreen, a Lake Forrest, Ill.-based maker of fresh foodservice and related products, filed for a $100 million IPO. Renaissance Capital estimates it could raise up to $750 million. It plans to trade on the Nasdaq (PTVE), http://axios.link/lkdy

🚑 PT Kalbe Farma, Indonesia’s most valuable drugmaker, is considering a $500 million IPO for its nutritional food business, PT Sanghiang Perkasa, per Bloomberg. http://axios.link/2tzn

Sumo Logic, a Redwood City, Calif.-based machine data analytics platform, filed for a $100 million IPO. It plans to trade on the Nasdaq (SUMO) with Morgan Stanley as lead underwriter, and reports a $92 million net loss on $155 million in revenue for 2019. The company raised around $345 million in VC funding from firms like Greylock (22.6% pre-IPO stake), Sapphire Ventures (7.1%), Accel (6.8%), IVP (5.6%), DFJ Growth (5.1%), Battery Ventures, Tiger Global, Sutter Hill Ventures, Workday Ventures, and Franklin Templeton. http://axios.link/W3SO

Liquidity Events

Centerbridge Partners hired Barclays and Credit Suisse to find a buyer for KIK Custom Products, a Canadian based maker of household cleaning products, for upwards of US$3.5 billion (including debt), per Reuters. http://axios.link/aD7Y

More M&A

The London Stock Exchange (LSE: LSE) received multiple bids for a 60% stake in the bond trading platform of Borsa Italana, per Reuters. Suitors include Deutsche Bank, Six, and a pairing of Euronext with Italian state lender CDP. http://axios.link/TTmj

🚑 Sulzer (Swiss: SUN) agreed to buy Haselmeier, a Swiss-German maker of drug delivery devices, for €100 million. http://axios.link/C6Oo

Fundraising

Exeter Capital, a consumer-focused PE firm led by former Advent International execs like Steven Collins and Steven Tadler, is raising $400 million for its debut fund, per thew WSJ. http://axios.link/XW7j

Goldman Sachs is considering raising $2 billion for a new VC and growth equity fund, per Bloomberg. http://axios.link/SSy6

Greylock is raising its sixteenth flagship VC fund, per SEC filings. www.greylock.com

🚑 JSL Health Capital, a Virginia-based VC firm led by Alex Turkeltaub (ex-Roam Analytics CEO), is raising $30 million for its debut fund. http://axios.link/xsRO

March Capital, a Santa Monica, Calif.-based VC firm, raised $60 million for a gaming-focused fund. http://axios.link/PnS3

Final Numbers
Source: Refinitiv Deals Intelligence. Data through 8/2/20.
  • Go deeper, per Reuters: "Companies raised the most funds in global equity and debt markets for the month of August in a decade as homebound bankers spend their summer fixing deals off the back of trillions of dollars of stimulus worldwide to fight the coronavirus pandemic."
Dan Primack

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