Axios Pro Rata

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December 09, 2021

🚨 Some news: Our upcoming Axios Pro newsletter on fintech deals will be co-authored by Ryan Lawler and Lucinda Shen.

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Top of the Morning

Illustration of a retail building covered in sale stickers

Illustration: Annelise Capossela/Axios

The traditional retail LBO is dying, Axios' Richard Collings reports.

  • The old model was to lever up, cut costs, monetize real estate, use cash flow to service debt, extract dividends, rinse and repeat.
  • But that's no longer flying, even as the industry emerges from the pandemic, due to rich valuations and a low appetite for credit risk.

By the numbers: North American retail buyout volume sunk to less than $1 billion in Q3, per Mergermarket data.

  • Industry sources said credit markets are only willing to lever traditional retailers up to 2.5 X EBITDA, a decrease from up to 4.5x in the first half of this year when buyouts of both Michaels and At Home group were transacted.
  • Lenders are increasingly risk averse when it comes to retail because they consider operational costs such as the amount of owed rent, in turn tied to lease agreements, as a form of debt.
  • Some apparel retailers, however, have restructured/shortened their leases to address the issue.

What they're saying: "There are three types of retail investments that will continue to attract investor attention: site-based services, experiential concepts that can drive traffic and brand banner stores that serve as customer acquisition channels in a more diversified channel landscape," says Ryan Cotton, global head of consumer at Bain Capital.

  • 2021 deals by Sycamore Partners, a firm historically dedicated to retail LBOs, consisted of providing debt financing to apparel retailer Express, purchasing cruise ship assets from Royal Caribbean Cruises in an all-cash deal, acquiring Ste. Michelle Wine Estates and adding a bolt-on to portfolio company Pure Fishing.

The bottom line: PE firms with dedicated retail practices will have to be more creative about how they invest in the sector going forward.


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Source: Giphy

Lee Enterprises (Nasdaq: LEE) said its board unanimously rejected a $141 million hostile takeover offer from Alden Global Capital, saying the $24 per share bid undervalues the local newspaper publisher and isn't in its best interests.

Why it's the BFD: The local newspaper industry views Alden as both Scrooge and the Ghost of Christmas Future, cutting costs to the point that readers are no longer well-informed.

Context: Lee's move today isn't a stunner, given that it previously adopted a poison pill, and that the investment adviser to one of Lee's largest shareholders on Wednesday wrote that the company's shares should be valued "north of $100."

The bottom line: "Any argument that shares of a local newspaper chain should be trading at 'north of $100' is a difficult one to make at a time when newspapers are in terminal decline. But there's so much societal pressure against Alden's bid that stakeholders may feel pressure to continue pushing off the hostile takeover offer." — Sara Fischer, Axios

Venture Capital Deals

🚑 Cerebral, a Walnut, Calif.-based online mental health services provider, raised $300 million at a $4.8 billion valuation. SoftBank led, and was joined by Prysm Capital, Len Blavatnik’s Access Industries, WestCap Group and Artis Ventures.

Mambu, a Dutch provider of embedded financial services and banking APIs, raised €235 million in Series E funding at a €4.9 billion valuation led by EQT Growth.

Robotic Research, a Clarksburg, Md.-based autonomous commercial trucking startup, raised $228 million in Series A funding from SoftBank, Enlightenment Capital, Crescent Cove Advisors, Henry Crown and Co. and Luminar Technologies.

Pleo, a Danish provider of expense management software and smart company cards, raised $200 million at a $4.7 billion valuation. Coatue led, and was joined by Alkeon Capital and insiders Bain Capital Ventures, Thrive Capital, Creandum, Kinnevik, Founders, Stripes and Seedcamp.

Tradeshift, an SF-based procure-to-pay platform, raised $200 million in equity and debt funding from such backers as Koch Industries, IDC Ventures, LUN Partners, Private Shares and Fuel Capital.

CloudBees, a San Jose, Calif.-based enterprise software delivery platform, raised $150 million in Series F funding at a $1 billion pre-money valuation. Goldman Sachs led, and was joined by Morgan Stanley, Bridgepoint Capital and insiders HSBC, Golub Capital, and Delta-v Capital.

Ola, an Indian ride-hail firm, raised $139 million at a $7.34 billion valuation. Edelweiss led, and was joined by FL, Siddhant Partners, Tejal Merchantile and Hero Enterprise.

NZXT, a City of Industry, Calif.-based PC gaming hardware and services company, raised $100 million led by Francisco Partners.

Rho, ​​a New York-based corporate spend and cash management startup, raised $75 million in Series B funding. Dragoneer led, and was joined by DFJ Growth and insiders M13, Inspired Capital and Torch Capital.

🚑 Exai Bio, an S.F.-based liquid biopsy startup, raised $67.5 million in Series A funding. Section 32 and Casdin Capital co-led, and were joined by Two Sigma Ventures.

Synthesia, a London-based AI platform for making synthetic videos, raised $50 million in Series B funding. Kleiner Perkins led, and was joined by GV and insiders Firstmark Capital, LDV Capital, Seedcamp and MMC Ventures.

Celigo, a San Mateo, Calif.-based integration platform as a service startup (IPaaS), raised $48 million in Series C funding. OMERS led, and was joined by NewSpring Capital.

NewtonX, a New York-based B2B insights company, raised $32 million in Series B funding. Marbruck Ventures led, and was joined by Level One, UBS O’Connor, Gaingels, Heliad Partners and insiders Two Sigma, Third Prime, XFund, Story Ventures and Switch.

🚑 K36 Therapeutics, a Cambridge, Mass.-based biotech focused on multiple myeloma patients, raised $30 million in Series A funding co-led by F-Prime Capital and Atlas Venture with Eight Roads Ventures.

Petra, a maker of tunnel-boring robots, raised $30 million in Series A funding. DCVC led, and was joined by ACME Capital, Congruent Ventures, 8VC, Real Ventures, Elementum Ventures and Mac Venture Capital.

Universe, a Brooklyn, N.Y.-based website building platform, raised over $30 million in Series B funding. Addition led, and was joined by Google Ventures, Javelin Venture Partners, Box Group.

Atom Learning, a London-based provider of online ed materials for elementary school-aged kids, raised $25 million from SoftBank.

Resolve, an embedded BNPL solutions provider that spiun out of Affirm in 2019, raised $25 million. Insight Partners led, and was joined by insiders Initialized Capital, KSD Capital, Haystack VC, Commerce Ventures and Clocktower Ventures.

Cassini Systems, a London-based margin analytics platform for the derivatives market, raised $20.5 million. Ten Coves Capital led, and was joined by Mosaik Partners.

🚑 Nomic, a Canadian high-throughput protein profiling startup, raised $17 million in Series A funding. Lux Capital led, and was joined by SR One and Casdin Capital.

Perchwell, a New York-based data and workflow platform for residential real estate, raised $15 million in Series A funding. Founders Fund led, and was joined by include Lux Capital, Matterport and California Regional MLS.

uLesson, a Nigeria-based K-12 ed-tech startup, raised $15 million in Series B funding from Tencent, Nielsen Ventures, Owl Ventures, TLcom Capital and Founder Collective.

Mindbox, a Russian marketing automation platform, raised $13 million from Baring Vostok.

Passbase, a German digital identity startup, raised $10 million in Series A fundung. Costanoa Ventures led, and was joined by Lakestar, Eniac Ventures, Cowboy Ventures and Seedcamp.

Upmesh, a Singapore-based livestream shopping app, raised $7.5 million in seed funding led by Monk’s Hill Ventures.

Pontoro, a Mountain View, Calif.-based digital asset securitization and liquidity platform, raised $6 million in seed funding led by Ulu Ventures.

Sympl, an Egyptian BNPL startup, raised $6 million in seed funding. Beco Capital led, and was joined by A15 and Global Ventures.

LiveBuy, a Berlin-based live shopping startup, raised $5.6 million in seed funding led by RTP Global.

Crack the Code, a Peruvian provider of K-12 computer science training, raised $2.7 million in seed funding led by Kaszek. www.crackthecode.ia

Private Equity Deals

Accel-KKR invested in Entersekt, a South African provider of device identity and authentication solutions.

🚑 EQT bought a 20% stake in 3Shape, a Danish maker of 3D scanners for dentists.

L2 Capital Partners acquired YakAttack, a Farmville, Va.-based maker of mounted aftermarket accessories.

Moa Capital bought TeleGeography, a Carlsbad, Calif.-based telecom market research and consulting firm.

Silver Lake led a $1.2 billion investment in Integrity Marketing Group, a Dallas-based omnichannel insurer. Harvest Partners will remain the company’s largest outside investor, with HGGC also retaining a position.

Spectrum Equity bought a majority strake in PresenceLearning, a New York-based provider of teletherapy and software for special ed and mental health providers in K-12 schools. The company had raised over $65 million from firms like Bain Capital Double Impact. Catalyst Investors, Red House Education, New Markets Venture Partners and Catamount Ventures.

Sydney Airport Holdings received Australian antitrust regulator approval for its A$23.6 billion takeover by an investor group that includes IFM Investors, QSuper, AustralianSuper and Global Infrastructure Partners.

Public Offerings

HashiCorp, a S.F.-based provider of multi-cloud automation software, raised $1.2 billion in its IPO. It priced at $80 per share (above $68-$72 range), for a $14 billion market cap. It will list on the NYSE (HCP) and had raised around $350 million in VC funding, most recently at a $5.1 billion valuation, from backers like Mayfield, GGV Capital, Redpoint Ventures, True Ventures, Franklin Templeton, T. Rowe Price, Geodesic Capital, Haystack, and IVP.

Nubank, a Brazilian challenger bank, raised $2.6 billion in its IPO. The company priced at $9 per share, after having cut its original $10-$11 range, for a $41 billion market cap. It will list on the NYSE (NU) and in São Paulo, while backers include Berkshire Hathaway.

SPAC Stuff

🚑 Jackson Acquisition, a healthcare SPAC led by Jeb Bush, raised $200 million in its IPO. The SPAC's directors include former U.S. Senator David Perdue, who this week announced his candidacy for governor of Georgia.

  • Fellow Georgia gubernatorial candidate Stacey Abrams also is on the board of one SPAC and agreed to join the board of Heliogen once it's acquired by a different SPAC. Her spokesperson says she plans to maintain those seats while campaigning.

Liquidity Events

Adobe (Nasdaq: ADBE) agreed to buy ContentCal, a British social media marketing startup that had raised over $13 million from Fuel Ventures, Guinness Asset Management and Perivoli Innovations Trust.

CPP Investments is seeking to sell insurance companies Wilton Re (which could fetch $4 billion) and Ascot Group, per Reuters.

🚑 EBOS Group, a listed New Zealand healthcare products distributor, agreed to buy Australian peer LifeHealthcare for A$1.17 billion from Pacific Equity Partners.

Ingram Micro, an Irvine, Calif.-based portfolio company of Platinum Equity, agreed too sell most of its commerce and lifecycle services business for $3 billion to CMA CGM, a French marine transport and logistics firm.

L'Oréal (Paris: OR) agreed to buy Youth to the People, an LA-based skincare brand, from backers like Sandbridge Capital and Strand Equity Partners.

More M&A

🚑 City of Hope, a Duarte, Calif.-based nonprofit cancer research center, agreed to pay $390 million to buy Boca Raton, Fla.-based Cancer Treatment Centers of America.

ConocoPhillips (NYSE: COP) agreed to sell its Indonesia assets for $1.36 billion to France’s MedcoEnergi.

Criteo (Nasdaq: CRTO) agreed to buy Iponweb, a London-based online ad infrastructure company, for $380 million.

Endeavor (NYSE: EDR) agreed to buy nine minor league baseball teams, including clubs affiliated with the Cardinals, Cubs, Giants and Yankees.

New Mexico utility regulators voted unanimously to reject Avangrid’s (NYSE: AGR) proposed $8 billion purchase of PNM Resources (NYSE: PNM).

Stanley Black & Decker (NYSE: SWK) agreed to sell its e-security solutions unit to Stockholm-listed Securitas for $3.2 billion.


Advent International raised $4 billion for its second tech growth equity fund.

Apollo Global Management will target $25 billion for its 10th flagship private equity fund, per Bloomberg.

Antler of Singapore raised £21.4 million for a new fund focused on U.K. startups.

🚑 Ascend Partners, a healthcare-focused PE firm co-led by Seon Hwang (ex-Warburg Pincus) and Richard Park (founder and ex-CEO of CityMd), raised $570 million for its debut fund.

Corazon Capital, a Chicago-based early-stage VC firm, raised $134 million for its third fund.

🚑 Eir Ventures raised €122 million for a fund focused on Nordic biotech startups.

Flint Capital raised $103 million for its second fund focused on European and Israeli tech startups seeking to enter the U.S. market.

Hollyport Capital is raising $2 billion for new secondary PE funds that focus on buying stakes in older funds, per the WSJ.

Twilio (NYSW: TWLO) launched a $50 million corporate VC fund.

Whitecap Venture Partners raised C$140 million for its fifth fund.

It's Personnel

Lily Bernicker (ex-Collaborative Fund) joined Wireframe Ventures as a principal to focus on climate startups.

Ray Durand joined Star Mountain Capital as director of finance. He previously was with JPMorgan.

🚑 Jennifer Griffin joined Mission BioCapital as a partner for strategy and investor relations. She previously was with the Massachusetts Life Sciences Center. The firm also promoted both Cassidy Blundell and Zach Collins to principals.

Sean Joffe (ex-Sixpoint Partners) and Peter Greenwood (Anchorage Capital) joined Greenhill & Company as a managing director and principal, respectively, of private capital advisory.

Final Numbers

Top 10 private-equity firms’ carbon-emissions reporting
Data: MSCI; Chart: Jacque Schrag/Axios

Go deeper: Private equity's climate footprint gains focus

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