Mar 19, 2020

Axios Pro Rata

Situational awareness: The partners of Los Angeles-based buyout firm Leonard Green have formed a $10 million fund to help employees of their portfolio companies, per PE Hub. This is one time you won't be criticized for copying another firm's strategy...

Top of the Morning

Illustration: Aïda Amer/Axios

"Try to remember how you felt in September 2008, right when you learned Lehman collapsed. Were you more scared then, or are you more scared now?"

  • That's a question I've been asking investors and other sources since late February.
  • When I began, the responses were pretty evenly split.
  • This week, all but two people said they are more scared now — and that majority includes several big names who were previously siding with 2008.

The argument in favor of 2008 being scarier is that no one knew if the pit had a bottom, or if we'd just spiral endlessly — vacuuming up Main Street after Wall Street. Our present slide, while horrific, will eventually end — if not because of social distancing, then because scientists discover treatments and/or vaccines.

The argument for 2020 is that Main Street and much of Corporate America are being eviscerated simultaneously. Wall Street may be relatively immune so far, outside of plunging equity prices and M&A fee interruptions, but Wall Street is just a lubricant for the American economy — it's not the pistons. And if we begin to see a large wave of corporate defaults, both Wall Street and private equity will feel a suffocating squeeze of their own.

  • Add to this the fear of sickness and death, particularly for older Americans, neither of which we experienced in 2008.

The bottom line: While we are always captive to the present, it is objectively reasonable to call this the most fraught moment of our collective lives. Decisions that get made over the next several days and weeks, including the White House's $1 trillion stimulus proposal that many think is too small, will be consequential for most everything ever again covered in this newsletter, or in media like it.



KKR agreed to buy Viridor, the waste management unit of British utility Pennon Group (LSE: PNN) for £4.2 billion (including assumed debt).

  • Why it's the BFD: It's the largest AC (after-coronavirus) buyout so far. For KKR, comfort came from the fact that Viridor has long-term contracts with government agencies. For Viridor, which reportedly had higher offers from strategics, comfort came from the fact that the deal value isn't subject to the buyer's share price.
  • The bottom line: "Viridor, which has 1,200 employees, operates recycling, energy-from-waste and landfill facilities, and runs a waste collection service. It has been for sale since September when the company announced a strategic review." — The Financial Times
Pro Rata for Kids

Illustration: Axios Visuals

Yesterday I asked your kids for some riddles, and again you delivered.


Today's project: I don't know how much toilet paper you're hoarding, but I'm guessing you've got an empty roll or two. Have your kid make it into a car, using any art supplies or spare items lying around the house (and then email me the photos).

  • Here's what E put together earlier this morning, as an example:
Supplies: Toilet paper roll, paint, dime, dog poop bags, and a LEGO Donald Duck.
Venture Capital Deals

🚑 Immunocore, a U.K.-based developer of novel T cell receptor therapies, raised $130 million in Series B funding. General Atlantic led, and was joined by Eli Lilly, RTW Investments, and return backers CCB International, JDRF T1D Fund, Rock Springs Capital, Terra Magnum Capital Partners, and WuXi AppTec.

UserTesting, a San Francisco-based user experience testing platform, raised $100 million. Insight Partners led, and was joined by return backers Accel, OpenView, and Greenspring Associates.

Ada, a developer of customer service chatbots, raised $44 million in Series B funding. Accel led, and was joined by Bessemer Venture Partners, FirstMark, Version One, Leaders Fund, and Burst Capital.

🚑 Sight Sciences, a Menlo Park-based developer of ophthalmology and optometry devices, raised $30 million in Series E funding led by D1 Capital Partners.

ZincFive, a Tualatin, Ore.-based maker of nickel-zinc batteries, raised $13.1 million in Series C funding led by 40 North Ventures.

Robin Games, a Venice Beach, Calif.-based maker of free-to-play mobile “lifestyle” games, raised $7 million in seed funding. LVP led, and was joined by 1Up Ventures, Alpha Edison, Everblue Management, firstminute Capital, Greycroft Tracker Fund, Hearst Ventures, and Third Kind VC.

🚑 ReadySet Surgical, a Cincinnati-based provider of efficiency and compliance software for the hospital surgical supply chain, raised $5.5 million in Series A funding. JumpStart led, and was joined by North Coast Ventures.

Around, a Redwood City-based videoconferencing startup, raised $5.2 million in seed funding from Floodgate, Initialized Capital, Credo Ventures, and Naval Ravikant.

Convizit, an Israeli provider of website user behavior analytics, raised $5 million in seed funding. Pitango VC led, and was joined by Jumpspeed Ventures.

Novi, a clean-ingredient sourcing platform for CPG companies, raised $1.5 million in seed funding led by Defy Partners.

Private Equity Deals

C.J. Foods, a Bern, Kansas-based premium dry pet-food maker owned by JH Whitney, acquired Ogden, Utah-based American Nutrition.

Colfax Creek Capital acquired Traverse City Products, a Traverse City, Mich.-based provider of supplier of custom roll-formed and stamped metal products.

CVC Capital Partners is backing a $1.3 billion bid by Chinese gaming company iDreamSky (HK: 1119) to buy rival Leyou (HK: 1089), per Reuters.

Dave & Buster's Entertainment (Nasdaq: PLAY) adopted a poison pill provision, following last month’s news that KKR had amassed an 8.3% ownership stake.

Public Offerings

Blue Moon, a Chinese liquid detergent maker backed by Hillhouse Capital Group, picked CICC to lead its planned $1 billion Hong Kong IPO, per Reuters.

UTime, a Chinese mobile phone and electronics manufacturer, filed for a $22 million IPO. It plans to trade on the Nasdaq (UTME) with ViewTrade Securities as sole underwriter. The company reports a $1.4 million net loss on around $13 million in revenue for the six months ending last September.

Liquidity Events

VideoAmp, a Los Angeles-based screen measurement and optimization platform, acquired Conversion Logic, a Los Angeles-based provider of cross-channel attribution solutions that raised around $14 million VC funding from firms like Rincon Venture Partners, Fantail Ventures, and Pelion Venture Partners. VideoAmp has raised around $124 million from such firms as Eastward Capital Partners, Raine Group, RTL Group, Ankona Capital, and Mediaocean.

More M&A

Alimentation Couche-Tard (TSX: ATD) reiterated its interest in buying Caltex Australia (ASX: CTX), even though CA’s shares have lost around 40% of their value since Couche-Tard made its A$8.8 billion takeover offer in February.

Boeing’s (NYSE: BA) $5.26 billion agreement to an 80% stake in the commercial aviation business of Brazil's Embraer is still moving forward, but Reuters reports that Boeing’s plummeting stock price puts the transaction on a “knife edge.”

It's Personnel

Taren Stinebrickner-Kauffman joined New Media Ventures as its president. She previously was exec director of SumOfUs.

Final Numbers
Reproduced from Moody's Investors Service; Chart: Axios Visuals

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