May 22, 2024

Hey, London: Reminder that we're hosting a private equity conversation tonight beginning at 6pm, as a sister event to what we did yesterday morning in New York. Get your invite.

  • Our guests are Andrew Sillitoe, co-CEO of Apax Partners, and Philipp Freise, KKR's co-head of European private equity.

Top of the Morning

Illustration: Aïda Amer/Axios

Blackstone might have just set itself up to become more profitable, by agreeing to give away some of its private equity profits.

Driving the news: The firm plans to share equity in its portfolio companies with most workers in those companies, according to a limited partner memo obtained by Axios.

  • The "systematic initiative" would apply to all of Blackstone's new large-scale, U.S. control investments. Plus around 18,000 employees of Copeland, a St. Louis-based HVAC manufacturer it purchased last year for $14 billion.
  • It had previously provided worker equity on a one-off basis, including at such companies as Ancestry, Bumble, and Merlin Entertainment.
  • Blackstone's expanded effort was first reported by the WSJ.

Catch up quick: Blackstone rival KKR kicked off the worker equity trend in 2011, with an initial focus on industrial portfolio companies like C.H.I. Overhead Doors.

  • In 2022, KKR and nearly two dozen other groups launched Ownership Works, a nonprofit aimed at helping both public and private companies to expand employee equity.

Why it matters: First, because it's simply the right thing to do.

  • Portfolio company workers are stakeholders, often with modest personal resources, and no amount of financial modeling or engineering can pay off without their day-do-day contributions.
  • It also could help make Blackstone a more appealing buyer for certain companies, plus reduce the employee churn that's common after private equity takeovers.
  • Finally, this move could lower some of the regulatory heat on private equity, which often is perceived as a bad boss.

The bottom line: Blackstone is the world's largest private equity firm, in terms of capital raised. KKR is the second. Other private equity firms should follow the leaders.

The BFD

Illustration: Gabriella Turrisi/Axios

Oaktree Capital Management says that it's become the new owner of Italian soccer club Inter Milan, after Chinese holding company Suning missed €395 million in loan repayments.

Why it's the BFD: Inter Milan is among Italy's most popular and successful teams, and is sure to become a takeover target for those who view Oaktree as an accidental owner.

Details: Los Angeles-based Oaktree made the loans in 2021, guaranteed by Suning's control stake in the club. Repayment was due yesterday.

The bottom line: U.S. institutions or individuals now own seven of the 20 clubs competing in the Serie A league.

Venture Capital Deals

🚑 AltruBio, an SF biotech focused on immunological diseases, raised up to $225m in Series B funding. BVF Partners led, and was joined by RA Capital Management, Cormorant Asset Management, Soleus Capital, and insiders aMoon Fund and Blackstone. axios.link/3UNXxKx

H (fka Holistic AI), a French foundation model and agentic AI startup, raised $220m in seed funding from Accel, UiPath, Bpifrance, Eric Schmidt, Xavier Niel, Amazon, FirstMark, Elaia Partners, Eurazeo, Yuri Milner, Aglaé Ventures, Creandum, Motier Ventures, Samsung, and Visionaries Club. axios.link/3wI9uJM

Farcaster, a decentralized social media protocol, raised $150m. Paradigm led, and was joined by a16z crypto, Haun Ventures, USV, Variant, and Standard Crypto. axios.link/4bpWK9J

🎶 Suno, a Cambridge, Mass.-based AI music startup, raised $125m. Lightspeed led, and was joined by Matrix Partners, Founder Collective, and Nat Friedman. axios.link/4buxvmy

🚑 Tuesday Health, a Chicago-based hospice care startup, raised $60m, per Axios Pro. Valtruis led, and was joined by Blue Venture Fund, Mass General Brigham Ventures, and CareSource. axios.link/4bJguF1

Praktika, a London language learning app, raised $35.5m in Series A funding. Blossom Capital led, and was joined by Creator Ventures and Blue Wire Capital. praktika.ai

🚑 Boulder Care, a virtual addiction treatment startup, raised $35m in Series C funding, per Axios Pro. Stripes was joined by insiders First Round Capital, Qiming Venture Partners, and Laerdal Million Lives Fund. axios.link/4dTqnBK

Reactive, a British provider of electric grid monitoring tech, raised £25m in Series D funding. M&G's Catalyst led, and was joined by BGF and Breakthrough Energy Ventures. axios.link/44SE8fY

Aerodome, a developer of "drone-as-first-responder" tech, raised $21.5m in Series A funding. CRV led, and was joined by a16z, Karman Ventures, Immad Akhund, and Ford Street Ventures. axios.link/3WQDRbo

Verse, an energy management software startup, raised $20.5m in Series A funding, per Axios Pro. GV led, and was joined by Coatue, CIV, and MCJ Collective participated. axios.link/4dRA6Zp

🚑 SamaCare, an SF provider of prior authorization software for specialty medications, raised $17m in Series B funding. Questa Capital led, and was joined by insiders Vive Collective and South Park Commons. samacare.com

Ketos, an SF water data provider, raised $10m. Tenfore Holdings led, and was joined by Danu Venture Group and insiders Broadway Angels, Plum Alley Ventures, Plug and Play Ventures, and Accenture. axios.link/4bD0Pai

Ore Energy, a Dutch developer of utility-scale batteries, raised €10m in seed funding from Positron Ventures, per TechCrunch. axios.link/3wMVP46

Traction Ag, an Auburn, Ind., provider of accounting software for the agriculture market, raised $10m in Series A funding. Cooperative Venturesled, and was joined by CHS and Growmark. tractionag.com

🚑 Welbe, a Mexican occupational health management startup, raised $7m in Series A funding. Volpe Capital led, and was joined by IFC, NAZCA, Kortex, GreenRock, Marathon, and Parceiro Ventures. main.wellbecare.com

🚑 Limula, a Swiss developer of cell therapy manufacturing tech, raised around $6.8m in seed funding. LifeX Ventures led, and was joined by Verve Ventures, Zühlke Ventures, Oxford Seed Fund, Lichtsteiner Foundation, and the W.A. de Vigier Foundation. limula.ch

Subeca, a Dallas-based water metering tech developer, raised $6m in Series A funding. Suez led, and was joined by Amazon's Climate Pledge Fund and Burnt Island Ventures. subeca.com

Cellugy, a Danish developer of cellulose-based materials, raised €4.9m in seed funding. ICIG Ventures and Unconventional Ventures co-led, and were joined by Joyance Partners, PSV DeepTech, The Footprint Firm, and EIFO. axios.link/4dQJTPg

🚑 Superpower, an LA-based personal health optimization startup, raised $4m in seed funding from Susa Ventures and Long Journey Ventures. superpower.com

Volt, an SMS messaging infrastructure platform, raised $3m in seed funding, per Axios Pro. Mercury Fund led, and was joined by Atento Capital, Uncorrelated Ventures, Stout Street Capital, and Yellow Rocks. axios.link/3WStKTA

Private Equity Deals

Blue Point Capital Partners acquired National Safety Apparel, a Cleveland maker of personal protective equipment for the electrical, industrial and service markets. thinknsa.com

BV Investment Partners acquired a majority stake in CyberSheath, a Reston, Va.-based IT services provider for companies in the defense industrial sector. Sellers include Lightview Capital. cybersheath.com

Circtec, a London developer of pyrolysis tire recycling facilities, raised €75m in equity funding co-led by Novo Holdings and A.P. Moller Holding. axios.link/3V67Vyu

Core Industrial Partners completed its take-private buyout of Fathom Digital Manufacturing, a Hartland, Wis.-based 3D printing firm that it had owned before Fathom went public via a SPAC. fathommfg.com

Eastern Metal Supply, an aluminum products maker owned by Wynnchurch Capital, acquired Eagle Metal Distributors, an Orlando distributor of aluminum products and patio screens. easternmetal.com

Forward Consumer Partners acquired a 50% stake in Xochitl, an Irving, Texas, maker of tortilla chips and salsas. axios.link/4bpNYIV

🚑 InTandem Capital acquired Adams Clinical, a Watertown, Mass.-based clinical trial sites network. adamsclinical.com

KKR acquired a minority stake in PHINMA Education, the education arm of Filipino conglomerate PHINMA Corp. axios.link/4bNfKP9

LeadsOnline, a Plano, Texas, portfolio company of TA Associates, acquired Nighthawk Cloud, a provider of investigative data visualization and analysis. leadsonline.com

Momentum, a Bath, N.Y.-based environmental services firm backed by Nonantum Capital Partners, acquired T&R Environmental, a provider of spill response and remediation services in upstate New York. momentumenvironmental.com

🌎 Novata, a New York provider of sustainability solutions for private markets, raised an undisclosed amount of funding from Motive Ventures and insiders Hamilton Lane and S&P Global. novata.com

🚑 The Riverside Company invested in CRIO, a Boston provider of e-clinical software that had raised around $17m from firms like Rally Ventures. clinicalresearch.io

The Vistria Group launched Crestfield Risk, a resources platform for independent insurance agencies. axios.link/4bM5LcZ

Public Offerings

Raspberry Pi, a British maker of low-priced PCs, confirmed that it picked London for its upcoming IPO. The company is controlled by a nonprofit foundation, but also has raised funding from backers like Arm and Lansdowne Partners. axios.link/44V4T3G

SPAC Stuff

Acuren, a Texas provider of engineering and industrial testing services firm owned by American Securities, agreed to go public via Admiral Acquisition (LSE: ADMR), a SPAC led by Martin Franklin. The deal values Acuren at $1.85b, with the post-merger company to transfer its listing to New York. axios.link/4dTh2de

🚑 Perceptive Capital Solutions, a health care SPAC formed by Perceptive Advisors, filed for a $75m IPO. axios.link/3QWdEnY

Liquidity Events

Autodesk (Nasdaq: ADSK) acquired Wonder Dynamics, an LA developer of VFX solutions for indie filmmakers that had raised over $10m from backers like Sunset Ventures, Founders Fund, Cyan Banister, Realize Tech Fund, Capital Factory, MaC Venture Capital, and Robert Schwab. axios.link/3WQJR48

🚑 Biogen (Nasdaq: BIIB) agreed to buy Hi-Bio, a South SF biotech focused on immune-mediated diseases, for upwards of $1.8b in cash (including $1.15b upfront). Hi-Bio raised around $217m from firms like Arch Venture Partners, Monograph Capital, Viking Global Investors, Arkin Holdings, Alpha Wave Global, and Jeito Capital. axios.link/4dQBXxt

🚑 Centivo, a health plan for self-funded employers that's raised around $150m in VC funding, acquired Eden Health, a primary care and insurance navigation company that had raised $140m from Insight Partners, Meteor MCCK, MVP Capital Partners, Flexcap, Bossanova Investimentos, Amigos Health, Company Ventures, Max Ventures, PJC, Aspect Ventures, and Flare Capital Partners. centivo.com

🚑 Doctolib, a French admin SaaS for doctors and medical workers that's valued by private investors at nearly €6b, acquired Aaron.ai, a German provider of patient communications solutions that had raised around €4m from BonVenture, Knight Capital, Futury Capital, and IBB Ventures. axios.link/3UUDfyW

Energy Spectrum Capital agreed to sell midstream energy firm Pinnacle Midland to Phillips 66 (NYSE: PSX) for $550m in cash. axios.link/44Tre1a

More M&A

Anglo American (LSE: AAL) rejected a sweetened $49.2b takeover offer from Australian miner BHP Group (ASX: BHP). axios.link/3UTAAFD

🎲 Hard Rock Hotels & Casinos denied having takeover interest in troubled Australian casino operator Star Entertainment (ASX: SGR), which had publicly identified Hard Rock as a suitor. axios.link/4dICrpH

Saltchuk Resources of Seattle agreed to buy Overseas Shipholding Group (NYSE: OSG), a Tampa, Fla., liquid bulk carrier, for $950m in cash, or $8.50 per share. axios.link/4bi8pax

Fundraising

Alcazar Energy, an infrastructure investment firm focused on utility-scale renewables projects in emerging markets, raised $490m for its second fund. alcazarenergy.com

Entrepreneurial Equity Partners, a Chicago PE firm focused on the food, consumer, and packaging markets, raised $546m for its second fund. e2p.com

🚑 Jo Natauri, former head of health care PE investing for Goldman Sachs, has launched a midmarket firm called Invidia Capital Management. axios.link/4auIdZc

Paceline Equity Partners, a Dallas-based PE firm, raised $780m for its second fund. axios.link/4bRT8NH

Peterson Partners of Salt Lake City raised $265m for its 10th PE fund. petersonpartners.com

Riata Capital Group, a Dallas-based lower midmarket PE firm, raised $285m for its second fund. riatacapital.com

It's Personnel

Jeff Mills joined VC firm Madrona as a partner and head of IR. He previously was with Gryphon Investors. madrona.com

Morgan Stanley named Song Yang Lee as head of its Asia Pacific financial institutions group, per Bloomberg. axios.link/3V86JuD

Christopher Olds joined British growth equity firm BGF as COO. He previously was CFO of Ultraleap. bgf.co.uk

Final Numbers

A table showing the 2024 Axios Harris 100 Poll. The top 10 companies are Nvidia, 3M, Fidelity Investments, Sony, Adidas, USAA, Honda Motor Company, Patagonia, Apple and Samsung.
Source: Harris Poll; Chart: Axios

Nvidia, which reports quarterly earnings after today's market close, scored top marks in the annual Axios/Harris Poll 100.

The big picture: Nearly two-thirds of included companies saw their reputation scores decline, Axios' Sara Fischer and Margaret Talev write.

Top three reasons given for the corporate reputation cuts:

  1. Not doing enough to keep prices fair from inflation (26%).
  2. Poor ethical behavior around pricing, wages and hiring (20%).
  3. Too much focus on cultural issues not key to consumers (18%).

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