Illustration: Lazaro Gamio/Axios
It was all champagne wishes and caviar dreams on Tuesday for Sprint and T-Mobile US, after a U.S. district court judge ruled that the mobile carriers could merge over the objections of 13 states' attorneys general.
Deutsche Telekom, which owns nearly 63% of T-Mobile US, is seeking to renegotiate, per the Financial Times:
"The German telecoms company wants to cut the price agreed for Sprint two years ago because the shares and performance of the company have deteriorated, said two people close to DT. The move is opposed by Sprint’s controlling shareholder, SoftBank of Japan, according to people close to the its chairman Masayoshi Son. The stand-off sets the stage for what could be a protracted and bitter battle to get the deal done."
When the 170-page ruling first came down, most focus was on how Judge Victor Marrero concluded it was impossible to determine which side was correctly predicting the competitive consequences of a merger. In short, he wasn't interested in playing fortuneteller.
What got less play were Marrero's statements about how Sprint's business was flagging, and that it might not remain viable without the merger (yes, he did allow himself to look into that crystal ball). Or, as The Verge's Nilay Patel put it: "The judge thinks that Sprint is... a bad company with a crap network run by dummies."
Sprint stock continues to trade at a discount to the deal's implied price, suggesting that investors remain wary that the deal will close as is (albeit less wary than they were before Tuesday).
The bottom line: The longer a deal takes to close, the more challenges may arise.
• Concord blues: Deval Patrick yesterday dropped out of the presidential race, but don't expect the former Massachusetts governor to return to his recent job at Bain Capital's impact investing fund. Sources say neither side expects a reunion.
🎧 Pro Rata Podcast digs into the intelligence coup of the century, the CIA's decades-long, secret ownership of a global communications tech company used by dozens of countries (including Iran). My guest is Washington Post reporter Greg Miller, who broke the story. Listen here.
Thoma Bravo reportedly will fail to secure majority shareholder approval for its $2 billion takeover of educational software company Instructure (NYSE: INST), meaning it must either improve its offer or walk away.
Backstory: Instructure's board accepted Thoma Bravo's $47.60 per share bid in early December, but included a 35 "go-shop" period. Shareholder proxy firms Glass Lewis and ISS came out against the deal, with the formal shareholder vote set for today. Instructure shares have usually closed above $47.60 since its Thoma Bravo agreement was first announced.
The bottom line: "Instructure, the enterprise software company whose tools power much of the digital infrastructure of U.S. university courses, has over the past quarter transformed from a sleepy software company to a rumor mill magnet." — Gary Alexander, Seeking Alpha
• Astranis, a San Francisco-based commercial satellite startup, raised $90 million in Series B equity and debt funding. Venrock led the equity tranche, and was joined by return backer Andreessen Horowitz. http://axios.link/i6Yr
🤖 Intuition Robotics, an Israeli developer of home robot companions for the elderly, raised $36 million in Series B funding. Sparx Group and OurCrowd co-led, and were joined by Toyota, Sompo Holdings, iRobot, Union Tech Ventures, Happiness Capital, Samsung Next, Capital Point, and Bloomberg Beta. http://axios.link/5RcZ
• Vedantu, an Indian learning app for middle and high school students, raised $24 million in new Series C funding led by GGV Capital (round total now $66m). http://axios.link/SAgw
• Radar, a Brooklyn-based location data infrastructure startup, raised $20 million in Series B funding. Accel led, and was joined by Two Sigma Ventures, Heavybit, Prime Set, and Bedrock Capital. http://axios.link/oCum
• Datometry, a San Francisco-based data warehouse virtualization startup, raised $17 million in Series B funding from WRVI Capital, Dell Technologies Capital, Redline Capital, and Acorn Pacific Ventures. www.datometry.com
• Freight Farms, a Boston-based maker of vertical-farming containers, raised $15 million in Series B funding. Osparie Ag Science led, and was joined by return backer Spark Capital. http://axios.link/Z4pB
• Habu, a developer of “omni-channel orchestration for the entire customer journey,” raised $15 million in Series A funding from super[set] and Ridge Ventures. http://axios.link/mEVo
🚑 CloudCath, a San Francisco-based provider of remote monitoring solutions for patients undergoing catheter-based treatments, raised $12 million in Series A funding. Capital Integral led, and was joined by FundRx, The Capital Partnership, Coconut Tree Investments, and Stanford’s StartX Fund. http://axios.link/Tq8j
• UrbanFootprint, a Berkeley, Calif.-based urban planning software platform, raised $11.5 million in Series A funding. Valo Ventures led, and was joined by Social Capital and Radicle Impact. http://axios.link/UiXL
• Praetorian, an Austin, Texas=based cybersecurity startup, raised $10 million in Series A funding from Bill Wood Ventures and McKinsey & Co. www.praetorian.com
• Unmind, a London-based workplace mental health platform, raised €9.1 million in Series A funding. Project A led, and was joined by Felix Capital. http://axios.link/foCp
• Flip, a German employee messenger app, raised €3.6 million from LEA Partners, Cavalry Ventures, and Plug and Play Ventures. http://axios.link/gzJq
🐶Butternut Box, a London-based fresh food delivery brand for dogs in Europe, raised an undisclosed amount of funding from L Catterton. Existing backers are White Star Capital and Five Seasons Ventures. www.butternutbox.com
• Apax Partners agreed to buy Cadence Education, a Scottsdale, Ariz.-based early childhood education provider, from Morgan Stanley Capital Partners. www.cadence-education.com
⛽ Enverus, an Austin, Texas-based portfolio company of Genstar Capital, acquired RS Energy Group, a Canadian software company focused on the upstream oil and gas market, from Warburg Pincus. www.enverus.com
• Houston Air Holdings, a new budget airline led by former United Airlines CFO Andrew Levy, raised $125 million from undisclosed backers. http://axios.link/icHX
⛽ Marathon Petroleum (NYSE: MPC) is receiving takeover interest for its Speedway gas station chain from TDR Capital and the Japanese owner of 7-Eleven, per Bloomberg. A deal could be worth around $26 billion. http://axios.link/gBBw
• MiddleGround Capital acquired Banner Services Corp., a Carol Stream, Ill.-based processor and distributor of metal bar products, from High Street Capital. www.bargrind.com
• Post Capital Partners invested in Agile Sourcing Partners, a Corona, Calif.-based BPO company for the electric and gas utility, commercial construction, security, and telecom markets. www.agilesourcingpartners.com
• Service Champions, a Brea, Calif.-based portfolio company of CenterOak Partners, acquired Bell Brothers, a Sacramento-based provider of residential air conditioning and plumbing services. www.servicechampions.com
• Westhook Capital acquired Santa Rita Landscaping, a Tucson, Ariz.-based provider of commercial landscaping services. www.santaritalandscaping.com
• Cogna (fka: Kroton), a Brazilian for-profit education company, raised around $590 million via a secondary public float. Proceeds will be used both for acquisitions and to repay debt. http://axios.link/2V2F
• SelectQuote, an insurance policy comparison site backed by Brookside Equity Partners, hired Morgan Stanley and Credit Suisse to manage an IPO that could come in the first half of this year, per Reuters. The float is expected to value SelectQuote north of $2 billion (including debt). http://axios.link/bJFo
🚑 Cinven is pursuing a dual exit process for German lab services company Synlab, both hiring investment ban Lilja for an IPO and seeking a buyer, per Reuters. The company could be valued at €5.5 billion. http://axios.link/o25f
• Google (Nasdaq: GOOG) completed its $2.6 billion purchase of Looker, a Santa Cruz, Calif.-based data analytics platform that had raised from firms like CapitalG, Premji Invest, Kleiner Perkins, IVP, Redpoint Ventures, and Meritech Capital Partners. http://axios.link/nbaA
• Insight Partners completed its $1.1 billion purchase of Armis, a Palo Alto-based enterprise IoT security platform, for $1.1 billion. CapitalG also participated with a $100 million investment. Armis had raised $110 million from firms like Sequoia Capital, Bain Capital Ventures, Tenaya Capital, and Red Dot Capital. http://axios.link/Hw0z
• Kinderhook Industries agreed to sell SCA, a Trussville, Ala.-based specialty vehicle manufacturer for light-duty trucks and SUVs, to Fox Factory Holding (Nasdaq: FOXF) for $328 million. www.scaperformance.com
• Citizens Financial Group (NYSE: CFG) agreed to buy the assets of Los Angeles-based financial advisory Trinity Capital. www.citizensbank.com
• GoDaddy (NYSSE: GDDY) agreed to buy the domain registrar and marketplace assets of Uniregistry, which will maintain its domain registry. http://axios.link/YdRJ
• McClatchy, the local newspaper publishing giant, filed for Chapter 11 bankruptcy protection, with expectations that it will be taken over by New Jersey hedge fund Chatham Asset Management, McClatchy's largest creditor and the owner of the National Enquirer. http://axios.link/Jwnn
• Schneider Electric (Paris: SCHN) agreed to buy Germany construction software company RIB Software (DE: RIB) for €1.4 billion. http://axios.link/kiK5
• Spotify (NYSE: SPOT) disclosed that it will pay between €130 million and €180 million in cash for podcasting network and content site The Ringer. http://axios.link/t3VW
• TPG Telecom (ASX: TPM) and Vodafone Australia (ASX: HTA) won court approval for their A$15 billion merger, overcoming a challenge from Australian antitrust regulators. http://axios.link/IpS0
• KKR raised $1.3 billion for its first global impact investing fund. http://axios.link/LA4n
• Logan Bartlett joined Redpoint Ventures as a managing director on its growth equity team. He previously was with Battery Ventures. www.redpoint.com
• Matt Ford left UK challenger bank Tandem Bank in order to join Santander InnoVentures, per TechCrunch. http://axios.link/61fr
• John Kissick, the retired co-founder of Ares Management, stepped down from the listed investment firm’s board of directors. He’ll be replaced by Kipp deVeer, an Ares partner and head of its credit group. www.aresmgmt.com
• Phil Lo joined GPI Capital as managing director of investor relations and biz dev. He previously led IR for Siris Capital. www.gpicap.com
• Mainsail Partners hired Lynn Atkinson (COO, former CFO at NewPort Group), Phil Stern (VP of ops, ex-head of payroll sales at Gusto), and Erica Currello (VP of biz dev, ex-VP at SkyView Capital). The firm also promoted David Farsai to principal. www.mainsailpartners.com
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