November 27, 2023

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Top of the Morning

Illustration: Maura Losch/Axios

Daryl Hall has sued John Oates, which is the sort of thing that once would have caused Kurt Loder to break into regularly scheduled programming.

  • (Dear readers under 30 ... Hall & Oates was a very popular band. Kurt Loder was an MTV News anchor. MTV News was a ... never mind. Google it.).

Why it matters: The dispute could pull back some covers on the secretive world of music rights deals, which keep booming despite the recent troubles of market big Hipgnosis.

Driving the news: Hall and Oates years ago sold part of their catalog rights to a New York-based firm called Primary Wave, which has since raised money from such investors as BlackRock, Brookfield Asset Management, CAA, and Oaktree Capital Management.

  • Now, according to the complaint filed in Nashville Chancery Court, it appears that Oates recently agreed to sell at least some of his remaining rights to Primary Wave.
  • Hall, who's long bemoaned the original deal, sued to stop the sale — which he alleges is in violation of Hall's contract with Oates, and is subject to arbitration.
  • A judge agreed to issue a temporary restraining order to block Oates, after Hall alleged the deal was set to close by as early as last week.

The big picture: Hall filed his complaint under seal, but the judge lifted some of it and says more information soon could be publicly disclosed. This could include a lengthy section about Hall's original agreement with Oates, which currently is blacked out, and perhaps details about the proposed sale to Primary Wave.

  • And that's what's of particular interest, given how little we typically learn about these music rights deals. Not just the dollars, but the structure and incentives.

The bottom line: Oates wants to cash in, like so many of his peers. But Hall can't go for that.

The BFD

Illustration: Sarah Grillo/Axios

Omeed Malik, a financier known for backing companies with anti-ESG values, has raised $170 million for his second SPAC.

Why it matters: This is a rare success in a very tough year for SPACs, and a market validation of Malik's "patriotic parallel economy" thesis.

Details: Colombier Acquisition Corp. II filed to raise $130 million in its IPO, and last week announced that it had priced at $150 million by selling an additional 2 million shares. Now it's upsized again, via an exercise of the underwriters' greenshoe.

  • Malik's first SPAC merged earlier this year with online marketplace PublicSq.

The bottom line: Malik is proving adept at securing capital, but the jury remains out on his strategy's ROI.

  • Shares of Malik's initial SPAC hit $29.80 when it announced the PublicSq deal, but PublicSq stock closed trading on Friday at just $5.73. Rumble, another SPAC target that's within the same milieu, closed Friday at $5.14.

Venture Capital Deals

🚑 RepeatMD, a Houston-based inbound revenue SaaS for aesthetic and wellness practices, raised $40m in Series A funding (plus $10m in debt from SVB). Centana Growth Partners and Full In Partners co-led, and were joined by PROOF. www.repeatmd.com

• PhysicsX, a U.K.-based simulation platform for engineers of physical products, raised $32m in Series A funding. General Catalyst led, and was joined by Standard Industries, NGP Energy, Radius Capital and Henry Kravis. https://axios.link/47RrFJP

• EMotorad, an Indian e-bikes maker, raised $20m in Series B funding. Panthera Growth Partners led, and was joined by Alteria Capital, xto10x Technologies and insider Green Frontier Capital. https://axios.link/46wVuOO

• Mozaic.io, a payments platform for creators, raised $20m in Series A funding from Volition Capital. https://axios.link/3GijTgl

• WeRoad, an Italian group adventure travel platform, raised €18m in Series B funding led by H14. https://axios.link/40Yzxqx

• Crezco, a British B2B invoice and bill payments platform, raised $12m in Series A funding from MMC Ventures and 13books Capital. https://axios.link/47vzF3C

• DoorFeed, a British residential real estate investment platform, raised €7m in seed extension funding. Motive Ventures led, and was joined by Stride VC and Seedcamp. https://axios.link/3GBgbyJ

• QuantumDiamonds, a German quantum sensing startup, raised €7m in seed funding co-led by IQ Capital and Earlybird. https://axios.link/3uHT1DK

• Generative Engineering, a London-based provider of physical product design software, raised $4m in seed funding. EQT Ventures led, alongside Join Capital. https://axios.link/40XZjeF

• Aptus.ai, an Italian provider of machine-readable documentation, raised €3m. P101 led, and was joined by Fin+Tech. https://axios.link/47S16nK

• CheckRewards, a Dubai-based cashback services startup, raised $1.2m from Mitgo Group. https://axios.link/49XIlkT

Private Equity Deals

🚑 Archimed completed its £203m take-private buyout of British health care IT firm Instem (LSE: INS). https://axios.link/45uZbF4

• BT Group (LSE: BT) and German PE firm Aurelius Group have decided not to make a takeover offer for MusicMagpie, a British online retailer of used smartphones and other electronics. https://axios.link/47uEPgd

🚑 Elliott Investment Management has acquired a stake in German lab operator Synlab, which in September agreed to be acquired for around €2.2b by Cinven. https://axios.link/49UcxNt

• EngageSmart (NYSE: ESMT), a Braintree, Mass.-based provider of customer engagement and payments software, said it didn't receive any offers during its 30-day "go-shop" period. That means it's on track to be acquired by Vista Equity Partners for around $4b, or $23 per share. https://axios.link/3Q9SWQj

🚑 Gauge Capital recapitalized East Coast Institute for Research, a Jacksonville, Fla.-based clinical research site management group focused on cardiovascular and metabolic diseases. www.eastcoastresearch.net

• KKR agreed to acquire Potter Global Technologies, a St. Louis-based provider of fire safety and emergency communication products, from Gryphon Investors. www.potterglobaltech.com

⚡ Octopus Energy, a British company backed by CPP Investments, acquired a 12.5% stake in the Walney Extension offshore wind farm in the Irish Sea from Danish pension fund AIP Management. https://axios.link/3Gg1cda

• OpenGate Capital agreed to buy Player One Amusement Group, a Toronto-based amusement services provider, from Canada's Cineplex (TSE: CGX) for C$155m. https://axios.link/46vomHi

Public Offerings

• Floward, a Kuwaiti online retailer of flowers and gifts, hired Goldman Sachs and HSBC for a Saudi IPO, per Bloomberg. The company has raised nearly $200m from firms like Impact 46, AlJazira Capital, Rainwater Partners and STV. https://axios.link/3Remcaz

Liquidity Events

⚡ Actis is in talks to sell its 51% stake in Cameroon's energy distributor (Eneo) to the country's government. https://axios.link/3uDYxY2

• Adobe (Nasdaq: ADBE) acquired Rephrase, a text-to-video company, per the Economic Times. Rephrase had raised around $12m from firms like Red Ventures, Silver Lake, 8VC and Lightspeed India Partners. https://axios.link/47vmiA6

🚑 Boehringer Ingelheim of Germany acquired T3 Pharmaceuticals, a Swiss biotech focused on bacterial cancer, for upwards of $508m. T3 had raised over $20m in VC funding from firms like Boehringer Ingelheim and Reference Capital. https://axios.link/3MXP9oH

⚡ OVO, a British energy distributor acquired Bonnet, a London-based EV charging app that raised over £8m from crowdfunding and firms like GV, TIER and Deliveroo. https://axios.link/3SWH3QO

• Paine Schwartz Partners is seeking a buyer for Suja Life, a San Diego-based maker of cold-pressed juices, per Axios Pro. https://axios.link/3MWvvti

More M&A

⚡ Adnoc is considering a €10b acquisition of Wintershell Dea, a German oil and natural gas exploration company backed by BASF, per Bloomberg. https://axios.link/3sIx0EB

⚡ Eneva, a listed Brazilian energy company, submitted a nonbinding merger offer to Brazilian fuel distributor Vibra Energia. https://axios.link/47vMivr

• John Bean Technologies (NYSE: JBT) of Chicago offered to buy listed Icelandic food processing tech firm Marel for €2.4b in cash and stock. https://axios.link/3SRJtjQ

• Lanes Group, a British water treatment company with more than £500m in annual revenue, is considering strategic options that could result in a majority stake sale, per Bloomberg. https://axios.link/49WFbOm

• PCCW, a Hong Kong-based telecom conglomerate controlled by Richard Li, is seeking to sell a minority stake in its fiber unit for around $1b, per Bloomberg. https://axios.link/40VWLxG

🚑 Taisho Pharmaceutical (Tokyo: 4581) received a management buyout offer that would value the OTC drugmaker at around $4.75b, making it Japan's largest-ever management buyout. https://axios.link/3QVkNnV

Fundraising

• AI Fund, a VC firm led by Andrew Ng, is raising $50m for its second fund, per an SEC filing.

• Molten Ventures has agreed to buy rival U.K. venture firm Forward Partners (LSE: FWD) for £41.4m, and said it plans to raise an additional £50m. https://axios.link/3usvu9Q

• Saviu Ventures, a VC firm focused on Francophone Africa, held a €12m first close on its second fund, which is targeting upwards of €50m, per TechCrunch. https://axios.link/49N8rXL

• Twelve Below, a New York-based seed and pre-seed firm, raised $108m for new funds. https://axios.link/47ST91U

It's Personnel

• Monica Chase joined TSG Consumer Partners as a managing director and head of IR. She previously was with Permira. www.tsgconsumer.com

Final Numbers

Data: CME Group's FedWatch Tool; Chart: Axios Visuals
Data: CME Group's FedWatch Tool; Chart: Axios Visuals

Wall Street expects the Fed to begin cutting interest rates by next summer, and that could be welcome news for dealmakers.

  • Venture capital and private equity flourished in a low-rate environment, as institutional investors sought yield by committing to alt asset funds.
  • But LP wallets got tighter as rates rose, forcing many GPs to face capital scarcity for the first time in their careers.
  • No one anticipates a return to zero, but even minor cuts would be welcomed by dealmakers who have struggled to adapt.

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