Axios Pro Rata

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January 13, 2022

✏️ Style change: Decided to shorten "million" to "m" and so forth, in the deal blurbs sections. Hopefully this helps you get through the newsletter a bit quicker. OK, here we go...

Top of the Morning

Illustration of a stock ticker with LED lights forming the TPG logo and an upward pointing arrow
Illustration: Annelise Capossela/Axios

TPG will begin trading today on the Nasdaq, after raising $1 billion in an IPO that values the private equity giant at around $9 billion.

Why it matters: This day is more than a decade in the making.

  • In February 2012 I sat in a Berlin hotel across from TPG co-founder Jim Coulter, and peppered him with questions about the firm going public. Peers like Blackstone and KKR already had shares trading, and Carlyle Group was just months away from the same.
  • He was decidedly noncommittal — tbh, reminding me a bit of Stripe's Collison brothers — talking about how the timing had to be "right."

From a macro market level, the timing most certainly isn't right today. HR software unicorn JustWorks postponed an IPO set for the week due to market volatility, and interest rate hikes could cause some traders to be extra cautious on PE firms that use leverage for some of their purchases.

Coulter and top TPG management, however, tell Axios that conditions are now right for TPG:

First, because it successfully executed its succession plan, with co-founders David Bonderman and Coulter moving into new roles (non-exec chair and exec chair, respectively), and the appointments of Jon Winkelried as CEO and Todd Sisitsky as president. It also distributed equity to almost everyone inside the firm.

Second because it's diversified beyond its buyout roots, particularly in areas like impact and growth equity investing. Plus, it turned around a core private equity business that had some early aughts challenges.

Third, and perhaps most importantly, TPG has gotten to watch its publicly-listed peers.

  • The most direct comp is likely Sweden-based EQT, which listed in Stockholm in 2019, but there is still plenty of shared DNA with U.S. firms.
  • The lag time let TPG decide that it prefers a lighter balance sheet (e.g., Ares and Blackstone) to a heavier balance sheet (e.g., Apollo and KKR). It also got to benefit from seeing other firms convert from publicly-traded partnerships to C-corporations, which let their shares become eligible for most equity indexes and ETFs; thus helping drive share prices higher. There's also been evolution on valuation metrics (remember "net economic income?").
  • Finally, the rise of passive investing has made private equity more appealing to those wanting exposure to active managers.

Details: TPG priced 33.9 million shares at $29.50, the midpoint of its proposed range. The firm also is promising a quarterly dividend.

The bottom line: Expect CVC Capital Partners to be the next alt asset firm firm IPO, with bankers to also hover over shops like Silver Lake, Warburg Pincus and (maybe) Andreessen Horowitz.

The BFD

Illustration of the Denver Broncos logo holding a “For Sale” sign in its mouth.
Illustration: Shoshana Gordon/Axios

A Denver judge's ruling this week removed a major roadblock to selling the Denver Broncos football franchise, which now appears imminent, Axios' Jeff Tracy reports.

Why it's the BFD: This is expected to smash the current record for pro sports team sales, which is $2.35 billion for the Brooklyn Nets in 2019.

Pregame: When Pat Bowlen bought the Broncos in 1984 from Edgar Kaiser Jr. for just $78 million, the deal gave Kaiser Jr. a right of first refusal on future sales. But the judge on Tuesday ruled that agreement is no longer valid. Bowlen died in 2019, before picking a successor among his seven kids (who don't all see eye-to-see on who should be in charge).

The bottom line: Expect there to be several bidding groups, with former Broncos quarterbacks John Elway and Peyton Manning to be among those involved.

Venture Capital Deals

MycoWorks, an developer of fungi-based biomaterials that can substitute for leather, raised $125m in Series C funding. Prime Movers Lab led, and was joined by SK Capital Partners and Mirabaud. http://axios.link/k3HO

SEBA Bank, a Swiss crypto banking platform, raised around $119m in Series C funding from Julius Baer Group, Alameda Research, Altive and DeFi Technologies. http://axios.link/9Hew

SeekOut, a Seattle-based enterprise hiring platform, raised $115m in Series C funding led by insider Tiger Global. http://axios.link/dVAc

LEAD School, an Indian provider of tech solutions for school management and materials procurement, raised $95m in Series E funding at a $1.1b valuation. WestBridge Capital led and was joined by GSV Ventures. http://axios.link/0Nrb

SoSafe, a German cybersecurity awareness and testing platform, raised $73m in Series B funding. Highland Europe led and was joined by La Famiglia and insiders Acton Capital and GFC. http://axios.link/6yKM

Pluang, a Jakarta-based investment app, raised $55m. Accel led, and was joined by The Chainsmokers, BRI Ventures and insiders Square Peg, Go-Ventures and Openspace Ventures. http://axios.link/DbRC

Giift, a Singapore-based loyalty program developer and manager, raised $50m from Apis Partners. www.giift.com

TheMathCompany, an Indian data analytics and data engineering firm, raised $50m led by Brighton Park Capital. www.themathcompany.com

• AcreTrader, a Fayetteville, Ark.-based farmland investing platform, raised $40m in Series B funding led by Anthemis Group. http://axios.link/dsNY

Accrue Savings, a Middletown, Del.-based “save now pay later” startup, raised $25m in Series A funding. Tiger Global led, and was joined by Aglaé Ventures, Maple VC, Twelve Below, Box Group, Red Sea Ventures, Ground Up Ventures, Good Friends and Silas Capital Ventures. http://axios.link/48v8

UBITS, a Colombia-based corporate training platform, raised $25m in Series B funding. Riverwood Capital led, and was joined by Owl Ventures, Endeavor Catalyst and Roble Ventures. www.ubits.com

🚑 Quris, an Israeli AI-powered drug development startup, raised $19m in new funding. Welltech Ventures led, and was joined by iAngels and GlenRock Capital. http://axios.link/6vZ8

Seel, a consumer product return enablement startup, raised $17m in Series A funding. Lightspeed Venture Partners led, and was joined by insiders Foundation Capital, Afore Capital and West Loop Ventures. http://axios.link/tnw6

Superchat, a Berlin-based omnichannel customer messaging startup, raised $15.6m in Series A funding. Blossom Capital led and was joined by 468 Capital. http://axios.link/gdCj

Shield, an Israeli communication compliance platform, raised $15m in Series A funding Macquarie Capital and OurCrowd co-led, and were joined by Mindset Ventures. http://axios.link/3okw

Web3Auth, a Singapore-based crypto onboarding and authentication startup, raised $13m in Series A funding. Sequoia Capital India led, and was joined by such firms as USV, Multicoin Capital and FTX. http://axios.link/5Ml4

Second Nature, an Israeli sales coaching platform, raised $12.5m in Series A funding from Signals Venture Capital, Stage One Ventures, Cardumen Capital and Zoom. http://axios.link/PNpy

Turnip, an Indian mobile gaming community platform, raised $12.5m in Series A funding. Greenoaks and Elevation Capital co-led, and were joined by SEA Capital and Vibe Capital. http://axios.link/ybaL

Ecommerce Brands, a consumer brand aggregator, raised $10m in equity led by Bearing Ventures (plus $30m in debt). http://axios.link/MSdI

Eureka, an Israeli data cloud security platform, raised $8m in seed funding led by YL Ventures. http://axios.link/GZYp

Fintech Farm, a British platform for launching neobanks in emerging markets, raised $7.4m in seed funding. Flyer One Ventures and Solid co-led, and were joined by TA Ventures, Jiji, u.ventures and AVentures Capital. http://axios.link/BpbU

Heat, a London-based streetwear mystery box startup, raised $5m from backers like Antler and LVMH. www.heat.io

HeyCharge, a German provider of infrastructure for underground EV charging, raised $4.7m in seed funding. BMW I Ventures led, and was joined by Statkraft. http://axios.link/OeXe

🚑 HeyRenee, an LA-based personal health concierge startup, raised $4.4m in seed funding. Quiet Capital led, and was joined by GFC, City Light Capital, Fika Ventures, Mucker Capital, SaaS Ventures and Tau Ventures. www.heyrenee.co

• Paysail, an SF-based invoicing payments platform that leverages asset-backed stablecoins, raised $4m in seed funding. Uncork Capital led and was joined by Tribe Capital, Pear VC and Mischief Capital. http://axios.link/3PJU

Masters, an app for trading with celebrity athletes, raised $2.7m in seed funding. Sweet Capital led, and was joined by Mucker Capital, Goodwater Capital and Luxor Capital. http://axios.link/7dF1

Private Equity Deals

Argosy Private Equity bought a control stake in Global Power Products, a Lawrenceville, Ga.-based maker of utility-grade transfer switches and other electricity products. www.globalpowerproducts.com

🎲 The Blackstone Group further sweetened its takeover bid for Australian casino operator Crown Resorts (ASX: CWN) to A$8.9b. http://axios.link/QPpZ

Desert Peak Minerals, a Denver-based mineral rights and royalties company formed by Kimmeridge Energy Partners, agreed to merge with rival Falcon Minerals (Nasdaq: FLMN) in a $1.9b deal. http://axios.link/nBWd

Global Processing Services, a London-based payments and embedded finance platform, raised $100m from Temasek and MissionOG. This is an extension to a $300m investment from Advent International and Viking Global, which gave those firms a control stake. http://axios.link/tMu1

Godspeed Capital bought Exceptional Software Strategies, a Linthicum Heights, Md.-based provider of IT solutions to federal agencies. www.exceptionalsoftware.com

🚑 Marlin Equity Partners bought a majority stake in CE Broker, a provider of continuing education management and license verification software to the healthcare sector. www.cebroker.com

Sentinel Capital Partners bought surf-racing products maker The Recreational Group, which will be merged with existing portfolio company Controlled Products. www.RecreationalGroup.com

🚑 Spark Dental Management, backed by Rock Mountain Capital, bought Children's Dental Management, which has 35 locations in three states. www.sparkdentalmanagement.com

SV Labs, a portfolio company of San Francisco Equity Partners, agreed to buy Diversified Manufacturing Corp., a fellow contract manufacturer of beauty and personal care products. www.s-vlabs.com

Zayo Group, a Boulder, Colo.-based portfolio company of EQT and Digital Bridge, bought QOS Networks, an Irvine, Calif.-based provider of SD-WAN and edge managed services, from M/C Partners. www.qosnetworks.com

Axios Pro Preview

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Illustration: Maura Losch/Axios

📩 Axios Pro newsletters launch next Wednesday. Subscribe at AxiosPro.com.

🚑 GTCR is nearing a deal to acquire Experity, the country's largest electronic health records company for the urgent care market, for between $1.2 billion and $1.3 billion from Warburg Pincus, Axios' Sarah Pringle was first to report.

  • Why it matters: This comes as urgent care clinics experience a patient visits boom due to COVID testing, which ultimately benefits end-market tech companies like Experity. Go deeper.

🏁 Checkers and Rally's, the burger chains backed by Oak Hill Capital Partners, "hopes" to refinance its debt within a year, CEO Frances Allen tells Axios' Richard Collings. Allen was brought in to turn around the business in early 2020.

  • By the numbers: Revenue from Jan. 1 through late October 2021 was $271 million, up 8% compared to the same period a year prior, she says. EBITDA is projected to improve to $60 million by 2025 from just under $40 million currently. Go deeper.

Sarah will co-author our health deal deals newsletter, while Richard is on our retail deals newsletter. www.AxiosPro.com

Public Offerings

🏎️ Andretti Acquisition, an auto SPAC co-led by race car driver Michael Andretti, raised $200m in its IPO. The original filing was for $250m. http://axios.link/tcm5

Modiv Acquisition, a real estate SPAC, withdrew registration for a $100m IPO that it filed for last March.

Gores Holdings IX, a SPAC formed by Gores Group, raised $525m in its IPO. http://axios.link/1QAi

Liquidity Events

🚑 Advent International is considering a sale process for BioDuro-Sundia, a San Diego-based drug research and development services firm that could fetch at least $1.5b, per Bloomberg. http://axios.link/rvDv

Affinity Equity Partners is considering a sale process for Trimco Group, a Hong Kong-based garment label maker that could fetch more than $1b, per Bloomberg. http://axios.link/8pXK

Coinbase (Nasdaq: COIN) agreed to buy FairX, a Chicago-based crypto futures exchange whose backers include Virtu Financial, Battery Ventures, Hyde Park Venture Partners and XTX Ventures.http://axios.link/qqMb

More M&A

Johnson Matthey (LSE: JMAT) plans to close its battery materials business, which employs 430 people, after failing to find a buyer. http://axios.link/SRyE

Monster Beverage (Nasdaq: MNST) will pay $330m to buy CANarchy, a Longmont, Colo.-based craft beer and hard seltzer producer. http://axios.link/t2X0

Wood PLC (LSE: WG), a British oilfield services and engineering firm, said it plans to sell its Built Environment consulting unit, in a deal that reportedly could fetch around £2b. http://axios.link/yf3Q

Fundraising

Clear Current Capital, an early-stage VC firm focused on alt protein, is raising $50m for its second fund. www.clearcurrentcapital.com

Dorm Room Fund, a VC firm focused on student-led startups, raised $10.4m for its latest fund. http://axios.link/KyKT

Golding Capital Partners of Munich raised €280m for its first dedicated secondaries fund. www.goldingcapital.com

Great Hill Partners is seeking to raise $3.5b for its eighth flagship fund. http://axios.link/TTnX

Owl Ventures, an ed-tech VC firm, raised $640m for its fifth flagship fund, $270m for its second opportunities fund and $100m for SPVs. http://axios.link/yoaA

Recognize, a private equity firm focused on tech services, raised $1.3b for its debut fund. Its founders include David Wasserman (ex-CD&R), Charles Phillips (ex-Infor CEO), Francisco D’Souza (Cognizant co-founder) and Rajeev Mehta (ex-president of Cognizant). http://axios.link/yYsc

It's Personnel

🌎 Nicole Systrom joined Galvanize, the climate tech investment firm led by Tom Steyer, as chief impact officer. She previously founded Sutro Energy Group. www.galvanizeclimatesolutions.com

Greycroft promoted Sharla Grass and Bryan Subijano to principals. www.greycroft.com

H.I.G. Capital promoted Stuart Aronson and Jordan Peer Griffin to executive managing directors. Its direct lending platform promoted Pankaj Gupta to president and Javier Casillas to chief credit officer. www.higcapital.com

Final Numbers

Source: Data: Yahoo Finance; Chart: Baidi Wang/Axios

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