Axios Pro Rata

A green watering can with a dollar sign painted on it.

February 06, 2023

In memoriam: Harvest Partners this morning announced the unexpected passing of firm president Jay Wilkins. A 1999 graduate of Vanderbilt University who joined Harvest in 2010, Jay is survived by his wife McCartney and son Jack.

Top of the Morning

Illustration of a road with a dollar sign hole in the middle

Illustration: Sarah Grillo/Axios

Oil giants for years have said that they'll pave the path toward energy transition, investing in everything from renewable projects to climate tech startups. Now, some of them are sounding more like speed bumps.

Driving the news: BP plans to "dial back" some of the company's renewable energy initiatives, due to disappointment over return on investment, per the WSJ.

  • Dutch rival Shell said it will keep renewable energy investments at 2022 levels, despite blockbuster profits.
  • Exxon CEO Darren Woods argued that energy transition "is not a game for startups," despite the energy industry's significant participation in venture capital rounds for climate tech startups.

Zoom out: I'm guilty of a little conflation here. European energy companies have focused most of their investment on utility-scale renewables, like solar and wind, whereas U.S. energy companies have gone more toward decarbonization technologies (capture, storage, etc.).

  • The commonality, however, is that both seem to be making a 2009-era sort of argument that the ROI is lacking.

The big picture: There's justifiable skepticism that oil majors have sincere interest in energy transition, given that they continue to earn billions of dollars by burning dinosaurs the old fashioned way.

  • For evidence, critics would point to the amount of capital invested in renewables and/or climate tech, compared to oil and gas spend.

Look ahead: There continues to be growing political and societal pressure toward decarbonization, no matter the short-term spending strategies of legacy industry.

  • These recent pronouncements may make upstarts less likely to partner with incumbants, or to accept their investment. They also could spark some brain drain.
  • Or perhaps the oil majors will again reverse course, as quickly as they're doing now, deciding that their own survival depends on it.

The BFD

Illustration of a self-storage unit with boxes creating an upwards bar chart.

Illustration: Allie Carl/Axios

Public Storage (NYSE: PSA) made an unsolicited offer buy rival Life Storage (NYSE: LSI) for around $11 billion in stock, after being rebuffed in private discussions.

Why it's the BFD: This one has antitrust risk written all over it. Public Storage already is the country's largest self-storage operator, with over 2,800 facilities in 40 states, while Life Storage ranks No. 4 with over 1,100 facilities in 37 states.

  • Much of Public Storage's growth has been inorganic, kicking off with a $4.7 billion deal for Shurgard Storage Centers in 2006, and then followed by a stream of local and regional acquisitions.

Details: The deal would value Life Storage at $129 per share, which represents around a 17% premium to Friday's closing price. Also worth noting that Public Storage yesterday announced a common stock dividend increase, which effectively sweetens its takeover bid.

The bottom line: Life Storage on Dec. 29 told Public Storage that it was "not for sale," and then reaffirmed its position one month later. In a statement this morning, Life Storage says the new proposal "appears to be substantially similar in all material respects" to the prior offer, but adds that it will undergo a board review.

Venture Capital Deals

🚑 ShiftMed, a McLean, Va.-based health care staffing platform, raised $200m co-led by Panoramic Ventures and Georgia Tech Innovation Fund, as first reported by Axios Pro. https://axios.link/3YnawUd

Breef, a New York-based marketing outsourcing platform, raised $16m in Series A equity and debt funding. Greycroft led, and was joined by BDMI, UTA.VC, Afterpay and UC Berkeley's The House Fund. https://axios.link/3JKbuFp

Latent Technology, a British developer of generative AI for video games, raised $2.1 million in pre-seed funding. Root Ventures and Spark Capital co-led, and were joined by Bitkraft. https://axios.link/3DJ8wgs

Inkle, an accounting and compliance SaaS for U.S. companies created by overseas founders, raised $1.5m in pre-seed funding from Picus Capital, Saison Capital and Force Ventures. www.inkle.io

Private Equity Deals

Ara Partners acquired Wattstor, a London-based provider of automated carbon reduction and electricity cost-saving tech. www.wattstor.com

Craftsman Capital acquired MSB School Services, a Cedar Park, Texas-based provider of K-12 special education software. www.mbsconnect.com

CVC Capital Partners is in talks to buy Scan Global Logistics, a Copenhagen, Denmark-based transport and logistics firm, from AEA Investors, per Bloomberg. https://axios.link/3Y8t5uT

Lone Star Funds agreed to buy Portland, Ore.-based industrial ship repair and fabrication firm Titan Acquisition Holdings from Carlyle and Stellex Capital Management, with earlier reports putting price talk at around $2b. https://axios.link/3RBF4P9

Sixth Street is among those prepping multi-billion euro bids for a minority stake in the media and commercial rights to German soccer league Bundesliga, per the FT. https://axios.link/3xhNYbz

Public Offerings

🚑 Structure Therapeutics, a South SF-based developer of G-protein-coupled receptors for chronic diseases, raised $161m in its IPO. the company sold an increased number of shares at the top of its $13-$15, and listed on the Nasdaq (GPCR). It had raised over $190m in VC funding from firms like Sequoia Capital China (10.3% pre-IPO stake), Biotechnology Value Fund (9.56%), Eight Roads (8.35%), F-Prime Capital Partners (7.5%) and Qiming Ventures (6.37%). https://axios.link/3HJ0feP

Liquidity Events

Hillhouse Capital is seeking to sell a stake in Scotch whisky maker Loch Lomond Group, which could fetch an $800m enterprise value, per Bloomberg. https://axios.link/3JOzxTP

Vinco Ventures and Icon Publishing (led by ex-MoviePass chair Ted Farnsworth) acquired supermarket tabloid the National Enquirer from Chatham Asset Management. https://axios.link/3x3Ed08

More M&A

🚑 Abbvie (NYSE: ABBV) is removing a $2b limit on new acquisitions, which it imposed after buying Allergan for $63b in 2020, per the WSJ. https://axios.link/3wZDDRi

🚑 Danaher (NYSE: DHR) has "expressed takeover interest" in Catalent (NYSE: CTLT), a Somerset, N.J.-based contract manufacturer with a $10b market cap, per Bloomberg. https://axios.link/3DFCD8M

Dongwon Industries is in talks to buy to South Korean operations of McDonald's (NYSE: MCD), per Korea Economic Daily. https://axios.link/3Yso5Bb

India's government will become the largest outside shareholder in Vodafone Idea, a joint telecom venture between Vodafone (LSE: VOD) and conglomerate Aditya Birla Group, after ordering that the company convert its debts into equity. https://axios.link/3DEPcAX

Newmont (NYSE: NEM), a Denver-based gold miner, is offering to buy Australian rival Newcrest (ASX: NCM) for around US$17b in stock. https://axios.link/3x0djXi

Recharge Industries of Australia was named the preferred bidder to buy bankrupt British battery maker Britishvolt. https://axios.link/3DIMISe

The Rothschild family, via their Concordia holding company, is seeking to take their eponymous French bank private via a tender offer at around a €3.7b valuation. https://axios.link/3HFrBS9

SEON, a fraud protection firm that's raised over $100m from firms like IVP, acquired Complytron, a Budapest-based compliance and anti-money laundering firm. https://axios.link/3Ytjyyk

Fundraising

Greenbriar Equity Group raised nearly $3.48b for its sixth fund. www.greenbriarequity.com

Hanover Investors, a PE firm focused on small-cap public companies in the U.K. and Nordics, raised £150m for its third fund. https://axios.link/3wZ5mSg

Hatteras Venture Partners of Durham, N.C. has secured around $127m of a $250m-targeted seventh fund, per an SEC filing. www.hatterasvp.com

Kapor Capital is raising up to $50m for an opportunity fund, per an SEC filing. https://axios.link/3wZ2zIM

Ovni Capital, a new French VC firm led by Arnaud Laurent (XLR Capital) and Augustin Sayer (Newfund Capital), held a €50m first close on its debut fund. https://axios.link/3Y8dQ58

Shamrock Capital raised $600m for its third content and media rights fund. www.shamrockcap.com

VXI Capital, a Boston-area VC firm led by Orin Hoffman (ex-The Engine, iRobot), is raising $75m for its debut fund, per an SEC filing. www.vxicapital.com

Weinberg Capital Partners of Paris is raising a fund to invest in defense companies, per Bloomberg. https://axios.link/3JLyt2S

It's Personnel

The Carlyle Group officially named former Goldman Sachs CFO and co-president Harvey Schwartz as its next CEO, seven months after the acrimonious departure of Kewsong Lee. https://axios.link/3DIzULA

Virginie Morgon is out as chair and CEO of Eurazeo, following shareholder pressure. Also leaving will be Marc Frappier, the PE firm's head of large-cap buyouts. Eurazeo's executive board will be led by new co-chairs Christophe Baviere and William Kadouch-Chassaing. https://axios.link/40waYRi

Global Endowment Management named Stephanie Lynch as managing partner-elect, Matt Bank and deputy CIO and Jay Ripley as deputy managing partner. www.globalendowment.com

Final Numbers

Data: Yahoo Finance. Chart: Axios Visuals
Data: Yahoo Finance. Chart: Axios Visuals

A San Francisco jury on Friday found Elon Musk and Tesla not liable, following a trial over a 2018 tweet in which Musk falsely wrote that he had "funding secured" to take the electric carmaker private.

  • Tesla stock remains well below its trading level when Musk made his offer to buy Twitter, and when he completed the deal, but has rebounded strongly from its year-end lows.
  • The jury verdict came after market close, and shares were up 1.6% at today's open.

Thanks for reading Axios Pro Rata, and to copy editor Bryan McBournie! Please ask your friends, colleagues and storage unit auctioneers to sign up.