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Apr 26, 2021

Axios Pro Rata

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Top of the Morning

Illustration: Aïda Amer/Axios

MindMed tomorrow is set to become the second psychedelic drug developer to go public in the U.S., with a third right around the corner.

Why it matters: Wall Street is eagerly volunteering for a high-risk trip, tempted by a massive addressable market for mental health treatments.

The big bet: Most clinical-stage biotech bets are binary, but MindMed has the added challenge of its active ingredient being considered Schedule 1 drugs. In other words, it needs to worry as much about the DEA as the FDA.

  • Another complicating factor is that MindMed believes its products should be taken under medical supervision, although it's unclear if FDA approval would accept telepresence in lieu of in-person.
  • In other words, this is a very different legalization process than with cannabis, which is as much about recreational use as it is medical use.

Capital markets: New York-based MindMed went public last year on Toronto's NEO Exchange, after failing to secure a second round of VC funding.

  • "VCs had blinders on when they saw those three letters: LSD," says MindMed founder and co-CEO JR Rahn. "We got laughed out of most rooms. Where we found patient capital was up in Toronto."
  • Rahn adds that the move to Nasdaq will allow institutional investors to take larger positions in the company, although it will keep its NEO listing active.
  • Fellow psychedelics developer Compass Pathways went public last last year and currently has a $1.33 billion market cap. ATAI Life Sciences, backed by Peter Thiel, just filed for its own IPO.

The bottom line: Psychedelics have been studied for decades, but were mostly ignored by investors until the past year. What seems to have changed in the past year was the pandemic, which increased public awareness of the scale of mental health ailments, and the relative paucity of available treatments and treatment infrastructure.

The BFD

Illustration: Aïda Amer/Axios

Thoma Bravo agreed to buy Silicon Valley-based cybersecurity and compliance software maker Proofpoint (Nasdaq: PFPT) for $12.3 billion.

  • Why it's the BFD: This would be the largest-ever private equity deal for a software company. It's also the latest indication that the return of mega-buyouts doesn't necessarily mean the return of club deals, as Thoma Bravo is going it alone.
  • Details: Thoma Bravo will pay $176 per share, which represents a 34% premium to Friday's closing price. The deal includes a 45-day go-shop provision, and is expected to close in the third quarter. Proofpoint today reported a $43 million net loss on $288 million of revenue for Q1 2021.
  • Bottom line: "The company is probably best known for email-based security tools, which remains a very significant business, especially when you consider how so many breaches start with what appear to be innocent emails but are in reality malicious intent vectors, hiding bad actors, dodgy links and more for malicious hackers to worm their way into bigger networks via unassuming individuals.” — TechCrunch
Venture Capital Deals

UpGrad, an Indian upskilling platform, raised $120 million from Temasek. http://axios.link/dJx0

Mighty Networks, a Palo Alto-based community platform for creators and brands, raised $50 million in Series B funding. Owl Ventures led, and was joined by Ziff Capital Partners, LionTree Partners and insiders like Intel Capital, BBG Ventures, Lucas Venture Group and Reid Hoffman. http://axios.link/hxp7

🚑 Current Health, a British remote care management platform, raised $43 million in Series B funding. Northpond Ventures led, and was joined by LRVHealth, OSF HealthCare, Section 32 and Elements Health Ventures. http://axios.link/QCGC

Unsupervised, a Boulder, Colo.-based provider of customer data analytics, raised $35 million in Series B funding co-led by Cathay Innovation and Signalfire. http://axios.link/llju

LEAD School, an Indian provider of school and curriculum management services, raised $30 million in Series D funding co-led by GSV Ventures and WestBridge. http://axios.link/m0IG

StashAway, an Indian robo-adviser app, raised $25 million in Series D funding. Sequoia Capital India led, and was joined by insiders Eight Roads Ventures and Square Peg. http://axios.link/UlyM

Cuckoo Internet, a British broadband provider, raised $6 million. RTP Global led, and was joined by JamJar Investments. http://axios.link/6Sx8

Private Equity Deals

The Blackstone Group offered $1.1 billion for a majority stake in listed Indian IT outsourcing services provider Mphasis. Co-investors would include Abu Dhabi Investment Authority and UC Investments. http://axios.link/Sa0t

🚑 The Carlyle Group agreed to buy Unchained Labs, a Pleasanton, Calif.-based maker of life sciences biologic tools, for $435 million. Sellers are Novo Holdings, Canaan Partners and TPG Biotech. www.unchainedlabs.com

Charterhouse Capital Partners is restarting the sale process for Mirion Technologies, a San Ramon, Calif.-based nuclear measurement and analytics company that could fetch more than $2 billion, per Bloomberg. http://axios.link/tSxH

Diversis Capital Partners bought Performance Designed Products, a San Diego-based developer of video game accessories and peripherals. www.pdp.com

Newlight Partners agreed to invest up to $150 million in Rosemark Group, an acquisition platform focused on the customer marketing sector.

Stone Point Capital and GIC are in advanced talks to buy Ascensus, a Dresher, Pa.-based retirement and savings account provider owned by Genstar Capital and Aquiline Capital Partners, for around $3 billion, per Bloomberg. http://axios.link/rV6X

🚑 VSS Capital Partners invested in Ambulatory Management Solutions, a Chicago-based provider of outpatient anesthesia, surgical and admin services. www.ams-md.com

Public Offerings

Five companies plan to go public on U.S. exchanges this week: Aveanna Healthcare, Endeavor, FTC Solar, Fortegra and Privia Health Group. http://axios.link/jRQi

Hello, a Chinese bike-sharing marketplace, filed for a $100 million IPO. It plans to list on the Nasdaq and reports a $1.3 million profit on $932 million in revenue for 2020. The company raised over $3 billion from firms like Ant Financial, Primavera Capital Group, Chengwei Capital, Fosun International and GGV Capital. http://axios.link/uWTj

SUSE, a German open-source enterprise software firm owned by EQT Partners, said it plans to raise around $500 million in a Frankfurt IPO. http://axios.link/anne

🚑 TScan Therapeutics, a Waltham, Mass.-based developer of T-cell therapies for cancer, filed for a $100 million IPO. It plans to list on the Nasdaq (TCRX) and raised from Baker Brothers (24.7% pre-IPO stake), Novartis (10.4%), 6 Dimensions Capital (9%), Bessemer Venture Partners (6.6%), Longwood Fund (6.6%), GV (6.2%) and Pitango (5.7%). http://axios.link/zYdO

🚑 Vera Therapeutics, a South SF-based developer of treatments for immunological and inflammatory diseases, filed for an $86 million IPO. The pre-revenue company plans to list on the Nasdaq (VERA) and raised $131 million from Abingworth (13.5% pre-IPO stake), Fidelity (13.5%), Longitude Venture Partners (13.5%), Sofinnova Ventures (13.5%), Surveyor Capital (9%), Kleiner Perkins (8.3%) and GV (5.8%). http://axios.link/O64G

ZipRecruiter, a Santa Monica, Calif.-based, filed for a direct listing on the NYSE (ZIP). It reports an $86 million profit on $418 million in revenue for 2020, versus a $6.5 million net loss on $430 million in revenue for 2019. Shareholders include IVP and Wellington Management. http://axios.link/i9Hc

Liquidity Events

Nestlé (Swiss: NESN) confirmed it's in talks to buy The Bountiful Co., a Ronkonkoma, N.Y.-based maker of nutritional supplements under brands like Nature's Bounty and Puritan's Pride. Bountiful recently filed for an IPO, reporting $70 million of net income on $2.1 billion in revenue for the year ending Sept. 30, 2020. KKR holds a majority stake, while The Carlyle Group holds a minority position. http://axios.link/0k5V

More M&A

AT&T (NYSE: T) is seeking a buyer for Rooster Teeth, an Austin, Texas-based streaming video unit of WarnerMedia, per Bloomberg. http://axios.link/JOds

🚑 Johnson & Johnson (NYSE: JNJ) restarted the sale process for its breast implant unit (Mentor Worldwide), which was shelved early last year, per Bloomberg. http://axios.link/QqwT

Mubadala Petroleum of UAE agreed to buy a 22% stake in the Tamar natural gas field (operated by Chevron) from Israel’s Delek Drilling for $1.1 billion. http://axios.link/JKeJ

The U.K. government launched a £1 billion privatization auction for thousands of miles of phone lines that run alongside railways. http://axios.link/pvI2

It's Personnel

Ajit Pai, former FCC chairman, joined Searchlight Capital Partners as a partner. http://axios.link/yyeE

Yifat Oron, former CEO of LeumiTech, joined The Blackstone Group as a senior managing director and head of a new Tel Aviv office. She’ll focus on tech and growth investments. www.blackstone.com

Samuel Green joined Apollo Global Management as a Sydney-based principal, per his LinkedIn. He previously was a VP with Macquarie Principal Finance. www.apollo.com

Nick Mangus joined Aurora Capital Partners as a vice president, per his LinkedIn. He previously was with ACON Investments. www.auroracap.com

Onex Partners promoted Faiz Hemani from senior principal to managing director. www.onex.com

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