May 20, 2024

ICYMI: We just posted full coverage of last week's BFD event in San Francisco, including interview videos. Check it out.

Top of the Morning

Illustration: Tiffany Herring/Axios

The Carlyle Group's aviation fund had 23 commercial planes leased out in Russia when the country invaded Ukraine in February 2022.

  • The planes, a mix of Boeing and Airbus aircraft valued at over $700 million, remain stuck inside of Russia, effectively seized by the government.
  • Carlyle has been unable to either get them back or get their insurance claims paid out, despite having "all-risk" and "war-risk" policies.

Driving the news: Carlyle earlier this month sent certified letters to several U.S. congressional leaders, asking for an investigation into reserves practices of aviation insurers and reinsurers.

  • It argues that the industry definitely has transparency issues and may have solvency issues, the latter of which could explain why its claims haven't been honored.

The big picture: This dispute goes far beyond just Carlyle, or the related lawsuit it filed in Florida 18 months ago.

  • There are more than 200 jets in similar straits, which has sparked a wave of litigation.
  • This includes a monster U.K. case brought by Carlyle and other lessors like Ireland's AerCap, which covers an estimated $10 billion of assets.
  • Many of the defendants sought to have it tried in Moscow, but London's High Court instead ruled that it will hear the case next spring.

Zoom out: No one in Congress has yet replied to Carlyle's letter.

  • Carlyle acquired the aviation finance business from Apollo in 2018, but this is the first claim it's made for lost aircraft under war-risk insurance policies.

The bottom line: The global commercial aircraft leasing business is estimated to be worth more than $150 billion, but its future business model will be impacted by how the Russia situation gets resolved.


Illustration: Natalie Peeples/Axios

ADNOC, the UAE's state-owned oil and gas giant, agreed to buy an 11.7% stake in NextDecade's (Nasdaq: NEXT) liquefied natural gas project in Texas.

Why it's the BFD: This is ADNOC's first deal in the U.S., and reflects the growing global ambitions of Middle Eastern energy giants. Don't be surprised if Saudi Aramco is next to make a stateside move.

Details: ADNOC is buying the position in the Rio Grande Project from Global Infrastructure Partners, and it also signed a 20-year LNG offtake agreement with NextDecade.

The bottom line: "The deal comes as the U.S. has emerged as world's largest LNG supplier, with more capacity slated to come online this decade despite the White House pause on new approvals." — Ben Geman, Axios

Venture Capital Deals

🚑 R3 Vascular, a Mountain View, Calif., developer of a stent for peripheral artery disease, raised $87m in Series B funding. Deerfield Management led, and was joined by insider 415 Capital.

Codesphere, a German platform for customizing existing cloud services, raised $18m in Series A funding from Creandum.

Neros, an LA-based autonomous military drone developer, raised $10.9m in seed funding from Sequoia Capital.

Overland AI, a provider of off-road ground vehicle autonomy solutions for the defense sector, raised $10m in seed funding. Point72 Ventures led, and was joined by Shasta Ventures, Ascend VC, Pioneer Square Labs, Voyager Capital, and Cubit Capital.

Bedrock Materials, a Chicago maker of sodium-ion battery materials, raised $9m co-led by Trucks VC, Refactor Capital, and Version One Ventures.

🚑 Oxford Endovascular, a British medical device maker focused on brain aneurysms, raised £8m in Series A funding. Parkwalk Advisors led, and was joined by Norcliffe Capital, The University of Oxford, Oxford Science Enterprises, and Vulpes Investment Management.

Teal, an embedded infrastructure startup for vertical SaaS businesses, raised $8m in seed funding. Torch Capital led, and was joined by Basis Set Ventures, General Advance, and Dash Fund., a Swedish quality assurance testing startup, raised €3m. ProFounders led, and was joined by Curtiosity and by Founders., a Belgian industrial energy control platform, raised €2.1m co-led by Übermorgen Ventures and Cavalry Ventures.

Private Equity Deals

Alicorn Venture Partners agreed to buy Glassbox (Tel Aviv: GLBX), a London-based provider of customer intelligence solutions in which Alicorn was an early investor, for $150m.

Avatel Telecom, a Spanish carrier that could be valued at €700m, shortlisted four takeover suitors: H.I.G. Capital, PAI Partners, Searchlight Capital Partners, and Telefónica.

Encore Consumer Capital acquired Chalet Desserts, a Sacramento maker of frozen bakery desserts and baked good inclusions.

EQT is in advanced talks to buy Keyword Studios (LSE: KWS), an Irish video game services company that's rejected four of the PE firm's unsolicited buyout bids, per Bloomberg. The final deal could value Keyword at more than £2b.

Juniper Landscaping, a Fort Myers, Fla. portfolio company of Bregal Partners, acquired Davis Landscaping, which operates in the Carolinas and Pennsylvania.

Kinderhook Industries invested in Apex Waste Solutions, a solid waste collection firm focused on the Colorado Front Range. In related news, Apex bought Colorado Springs, Colo.-focused All American Disposal.

Superior Environmental Solutions, a Cincinnati portfolio company of Palladium Equity Partners, acquired Arrowhead Environmental Services, an environmental and industrial services firm focused on Central Virginia.

Public Offerings

The only major U.S. IPO expected this week is from Bowhead Specialty, a New York property and casualty insurer backed by Gallatin Point Capital.

🚑 Rapport Therapeutics, a Boston developer of developer of neuromedicines, filed for an IPO. It plans to list on the Nasdaq (RAPP), and has raised $250m from Johnson & Johnson, Cormarant Asset Management, Arch Venture Partners, Third Rock Ventures, Fidelity, Goldman Sachs, Logos Capital, Perceptive Advisors, Sofinnova Investments, Surveyor Capital, and T. Rowe Price.

Liquidity Events

Quadrant Private Equity is seeking to sell Darrell Lea, an Australian chocolate and licorice maker that could fetch nearly A$1b, per Bloomberg.

Randstad (AMS: RAND) acquired Torc, a Boston-based talent marketplace that had raised $5m in seed funding from Recognize Partners and Asymmetric Capital Partners.

Thoma Bravo agreed to sell Venafi, a Salt Lake City-based machine identity management company, to Israeli cybersecurity company CyberArk (Nasdaq: CYBR) for $1.54b in cash and stock.

Thoma Bravo hired JPMorgan to explore a sale of its 83% stake in Instructure (NYSE: INST), a Salt Lake City educational software firm with around a $3b market cap, per Reuters.

More M&A

🎲 Hard Rock Hotels & Casinos is considering a takeover offer for troubled Australian casino operator Star Entertainment (ASX: SGR), which has a A$1.3b market cap.

Elliott Investment Management has built a stake of more than $1b in Johnson Controls (NYSE: JCI), per Bloomberg.

Zeus Capital, a British investment bank, is in talks to buy the capital markets unit of financial advisor WH Ireland Group (LSE: WHI), per Bloomberg.

🦞 Red Lobster filed for Chapter 11 bankruptcy protection, and signed a stalking horse agreement to sell to current lenders.

  • The seafood restaurant chain was founded by Bill Darden, the namesake for Darden Restaurants, and acquired by Golden Gate Capital for $2.1b in 2014. Golden Gate exited its remaining stake in 2020, by selling to Thai Union Group.


Kedaara Capital, an Indian PE firm, raised $1.7b for its fourth fund.

iSeed Ventures has secured $100m of a fourth fund that could raise up to $150m, per an SEC filing.

RedBird Capital Partners raised around $3.9b for its fourth flagship fund and $1.4b for its next RedBird IMI fund, per the WSJ.

🎶 Round Hill Music Royalty Partners of Nashville, Tenn., is raising its fourth fund, per an SEC filing.

Valar Ventures raised $300m for its ninth fund, per an SEC filing.

It's Personnel

Heather Slavkin Corzo is stepping down as policy director at the SEC. She'll be succeeded by Corey Klemmer, who most recently was corporate finance counsel to SEC chair Gary Gensler.

Final Numbers

The line chart shows the daily stock prices of SouthState and Independent Bank from Jan. 2, 2020, to May 17, 2024, with SouthState's stock price fluctuating around the mid-80s and Independent Bank's stock price seeing a significant drop by May 2024.
Data: Yahoo Finance; Chart: Axios Visuals

We didn't get the wave of regional bank consolidation that many expected after SVB's collapse, thus making this morning's deal between SouthState and Independent Bank that much more notable.

  • SouthState (NYSE: SSB), a Florida-based bank with South Carolina roots, will pay around $2 billion in stock for McKinney, Texas-based Independent (Nasdaq: IBTX).
  • That works out to $48.51 per share for Independent, representing a 10.4% premium over Friday's closing price.
  • Combined, the company would have around $65 billion in assets, $55 billion in deposits and $48 billion in gross loan value.

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