Sep 5, 2019

Axios Pro Rata

By Dan Primack
Dan Primack
Top of the Morning

Illustration: Sarah Grillo/Axios

We've all pulled out folding chairs to watch the post-Labor Day IPO parade. In particular, the floats from high-fliers like WeWork, Peloton, Cloudflare, DataDog, and SmileDirectClub.

But perhaps the most interesting IPO will take place 4,400 miles south of New York, in the tiny South American country of Guyana.

  • The issuer is Pomeroon Trading, an upstart coconut and spice farm co-founded by a Stanford Business School graduate named Duncan Turnbull.
  • It only seeks to raise around $1 million but, if successful, it would be the first-ever agricultural company to list on the Guyana Stock Exchange and only the exchange's third new listing in the past decade.
  • The road-show will stop in Barbados and Trinidad, instead of in San Francisco and Boston.

Why it matters is that Guyana, home to fewer than one million people, is poised to become the world's next petro-state, with Exxon Mobil's first oil production vessel arriving just the other day. But no one knows if tiny country's government can properly manage the inflows, and companies like Pomeroon Trading could help preemptively diversify its exports (i.e., help Guyana avoid becoming the next Venezuela).

  • Turnbull grew up in Northern England and, as a teenager, bought and sold a few pigs. By the time he attended Oxford as an undergrad, he was selling a couple hundred pigs per year. In fact, Turnbull eventually ended up looking at opportunities in Guyana at the suggestion of someone whose wife had bought a pig.
  • He later became an investment banker and then headed to Stanford, knowing he wanted to do something in agriculture. In Guyana he saw the traditional sugar and tobacco crops, but was stunned by the relative lack of coconuts, despite the climate and growing global demand for coconut oil and coconut water.
  • Turnbull and a partner leased out a 1,000 acre farm to form Pomeroon, and got to work creating new on-farm infrastructure and processing facilities, planting dwarf trees, and testing out a few new crops (e.g., passion fruit, moringa). It also hired over 50 locals (half of whom are women), and generated cash crop revenue from existing plants while the new ones grow, with expectations that the IPO would let it lease new land.
  • "It blows my mind that the Caribbean is net importer of coconuts. Even the cruise ships that go around are making handicrafts out of coconuts from India, not from countries like Guyana (which he says is more culturally Caribbean than Latin American).

Again, they're only seeking to raise $1 million. That's usually pocket change in this space. But, for both current Guyana residents and for the country's diaspora, it's an opportunity to invest locally at a time when one of the world's largest companies just laid contractual claim to newfound natural resources.

The BFD

Illustration: Lazaro Gamio/Axios

CVS Health (NYSE: CVS) got judicial sign-off for its $70 billion acquisition of health insurer Aetna, with Federal Judge Richard Leon approving a Justice Department settlement in which the combined company sold off its Medicare drug plans to WellCare.

  • Why it's the BFD: There had been widespread opposition to the mega-merger, including from the American Medical Association, over concerns that it could significantly increase prices and limit consumer choice. Judge Leon took the complaints very seriously, even taking the unprecedented step of allowing live testimony from critics, but ultimately was satisfied by the divestitures.
  • Bottom line: CVS has been operating as if the merger was completed, and legal experts said the judge didn't have the authority to unwind it. This final order puts everything to rest. — Bob Herman, Axios
Venture Capital Deals

• Grove Collaborative, a direct-to-consumer e-commerce platform for natural home and personal care products, raised $150 million in Series D funding at a $1 billion post-money valuation. Lone Pine Capital, General Atlantic, and Glynn Capital co-led, and were joined by return backers Norwest Venture Partners, Mayfield Fund, NextView Ventures, MHS Capital, and Heron Rock Capital. www.grove.co

🚑 Nkarta, a South San Francisco-based developer of natural killer cell therapies to fight cancer, raised $114 million in Series B funding. Amgen Ventures, Deerfield Management, Life Science Partners, Logos Capital and RA Capital Management were joined by return backers NEA, Novo Holdings, and SR One. http://axios.link/moCG

🚑 Repare Therapeutics, a Montreal-based precision oncology startup, raised US$82.5 million in Series B funding. Cowen Healthcare Investments led, and was joined by OrbiMed, Redmile, BVF Partners, Logos Capital and return backers Versant Ventures, MPM Capital, Fonds de solidarité FTQ, and BDC Capital. http://axios.link/JZt7

Terramera, a Vancouver-based developer of alternative pesticide product, raised US$45 million in Series B funding. Ospraie Ag Science led, and was joined by return backer S2G Ventures. www.terramera.com

Bellwether Coffee, a Berkeley, Calif.-based maker of small commercial coffee roasters, raised $40 million in Series B funding co-led by DBL Partners and SolarCity co-founders Lyndon and Peter Rive. http://axios.link/uh0D

🚑 iStar Medical, a Belgian developer of ophthalmic implants for the treatment of glaucoma, raised €40 million in Series C funding. LSP and GIMV co-led, and were joined by Earlybird, BNP Paribas Fortis PE and return backers Capricorn Partners, SRIW, and the Belgian Federal Investment Fund. http://axios.link/UpJg

Olivela, a luxury fashion e-commerce platform, raised $35 million in Series A funding led by Morgan Stanley International. http://axios.link/bD5E

🚑 Sight Sciences, a Menlo Park, Calif.-based developer of ophthalmic medical devices, raised $31 million in Series D equity funding led by KCK Group. http://axios.link/vrll

🚑 BrightInsight, a San Jose, Calif.-based IoT platform for biopharma and medtech, raised $25 million in Series A funding co-led by New Leaf Venture Partners and Eclipse Ventures. www.brightinsight.com

Even Financial, a New York-based supply-side platform for online financial products, raised $25 million. Citi Ventures and MassMutual Ventures co-led, and were joined by LendingClub, and return backers American Express Ventures, Canaan Partners, F-Prime Capital, GreatPoint Ventures, and Goldman Sachs. http://axios.link/OuSk

Fyllo, a Chicago-based provider of marketing software for the cannabis industry, raised $16 million in seed funding co-led by JW Asset Management and K2 & Associates. http://axios.link/QNHP

PerimeterX, a San Francisco-based cybersecurity startup focused on preventing automated website attacks, raised $14 million in new Series C funding from Deutsche Telekom Capital Partners and Salesforce Ventures. http://axios.link/Mthm

Sourcewater, a Houston-based provider of oilfield water intelligence software, raised $7.2 million in Series A funding from such backers as Bison Technologies and Marubeni Corp. http://axios.link/f6rB

🚑 PathoQuest, a Paris-based startup focused on pathogen detection in biological samples, raised €8 million from Norginer Ventures, Kurma Partners, Idinvest Partners, Investiere, and Charles River Labs. www.pathoquest.com

Capcito, a Stockholm-based SME financing platform, raised €7 million from Schibsted Growth, Ventech, SEB Venture Capital, and Collector Ventures. http://axios.link/PIVK

Saltbox, an Atlanta-based co-working space operator for companies that also need warehouse space, raised $3.2 million led by Village Global. http://axios.link/Ju32

Private Equity Deals

ACS, a Springfield, Mo.-based building materials company backed by Angeles Equity Partners and Clearlake Capital Group, acquired Contractor’s Truss Systems, a Cotter, Ark.-based provider of engineered wood products. www.contractorstruss.com

Apis Partners acquired a majority stake in Tutuka, a South Africa-based prepaid card processor, from Paycorp. www.tutuka.com

HC Private Investments of Chicago acquired Epicurean Butter Co., a Federal Heights, Colo.-based maker of finishing butters for the retail and foodservices markets. http://axios.link/pWjh

• KKR acquired a majority stake in EuroKids International, a preschool and K-12 education provider in India.

Kudu Investment Management acquired a minority stake in EJF Capital, an Arlington, Va.-based alternative asset management firm focused on “regulatory event driven themes across the financial and real estate sectors.” http://axios.link/C707

May River Capital bought Kason, a Milburn, N.J.-based maker of screening, drying, cooling, and processing equipment. It will become part of May River’s new material processing equipment platform, AMP, which also will include existing portfolio company Marion Process Solutions. www.mayrivercapital.com

🚑 Medical Depot, a Miramar, Fla.-based medical products distributor owned by Clayton Dubilier & Rice, is in talks to restructure its debt ahead of “an expected liquidity crunch,” per the WSJ. http://axios.link/NCb3

🚑 PAG acquired a 58% stake in biologic antibodies developer Hisun BioRay Biopha for $540 million from listed Chinese pharma group Zhejiang Hisun Pharmaceutical. http://axios.link/Pxhj

Providence Equity Partners acquired a majority stake in TimeClock, a San Angelo, Texas-based provider of workforce management software. www.timeclockplus.com

Providence Strategic Growth acquired I’Car Systems-DataFirst Group, a French provider of software for auto manufacturers and dealers, from Argos Wityu. www.icarsystems.fr

🚑 Resonetics, a Nashua, N.H.-based portfolio company of GTCR, acquired Tru Tech Systems, a Mount Clemons, Mich.-based provider of precision processing services for the medical device market. http://axios.link/XNZX

Silver Lake said it will make a new $1 billion investment in Motorola Solutions (NYSE: MSI). http://axios.link/oVpX

Stage Fund acquired Cymmetria, an Israel-based cybersecurity deception platform that previously raised around $11 million from VC firms like Sherpa Ventures. http://axios.link/Gvfy

Sterling Investment Partners acquired a majority stake in HeartLand, a Kansas City-based provider of commercial landscape and facilities services. www.heartlandcompany.com

TPG Capital agreed to pay $500 million to acquire CollabNet, an Alpharetta, Ga.-based dev-ops company, from Vector Capital. http://axios.link/XggF

Public Offerings

🚑 Envista, a Brea, Calif.-based dental products company being spun out of Danaher (NYSE: DHR), set IPO terms to 26.8 million shares at $21-$24. It would have a fully-diluted market value of $3.5 billion, were it to price in the middle, and plans to trade on the NYSE (NVST) with J.P. Morgan as lead underwriter. http://axios.link/SKgd

Huize, a Chinese online insurance platform, filed for a $150 million IPO. It plans to trade on the NYSE (HUIZ) with Morgan Stanley as lead underwriter, and reports nearly $1 million of net income on $66 million in revenue for the first half of 2019. The company raised over $30 million in VC funding from firms like SAIF Partners and Fortune Capital. http://axios.link/1G21

MetroCity Bankshares, a Doraville, Ga.-based bank with 19 branches, filed for a $40 million IPO. It plans to trade on the Nasdaq (MCBS) with Keefe Bruyette Woods as lead underwriter. http://axios.link/57Mg

Liquidity Events

🍔 3G Capital sold around $3 billion of its stake in Restaurant Brands International (NYSE: QSR), the parent company of Burger King and Tim Hortons, cutting its stake from 41% to 32.1%. http://axios.link/702M

GI Partners and TA Associates seeking a buyer for MRI Software, a Solon, Ohio-based real estate software business that could fetch upwards of $3.5 billion, per Buyouts. http://axios.link/NBnq

KKR is seeking to sell or list German defense supplier Hensoldt at an enterprise value of around €2 billion, per Reuters. http://axios.link/rD28

Palo Alto Networks (NYSE: PANW) agreed to buy Zingbox, a Mountain View-based IoT security startup, for $75 million in cash. ZingBox had raised around $23 million from such firms as GSR Ventures, Dell Technologies Capital, Wisemont Capital, Triventures, Envision Ventures, and Clearvision Ventures. http://axios.link/eIFF

Pamlico Capital is seeking a buyer for Service Express, a Grand Rapids, Mich.-based provider of third-party maintenance for data center infrastructure, per Buyouts. http://axios.link/6OM2

Pfingsten Partners sold Bailey International, a Knoxville, Tenn.-based provider of provider of hydraulic solutions, to an affiliate of EBSCO Industries. www.ebscoind.com

More M&A

🍸 Campari (Milan: CRPI) agreed to buy French rums brands Trois Rivieres and La Mauny for €60 million. http://axios.link/IL2q

• OpenGov, a government performance management software company that earlier this week raised $51 million in Series D funding, acquired ViewPoint, a permitting and licensing SaaS company. www.opengov.com

Prudential Financial (NYXE: PRU) agreed to buy Assurance IQ, a Bellevue, Wash.-based online insurance intermediary. The deal includes $2.35 billion upfront plus upwards of $1.15 billion in earnouts. http://axios.link/Gf9A

Fundraising

Reefknot Investments, a joint venture between Singapore sovereign wealth fund Temasek and Swiss logistics company Kuehne + Nagel, launched a $50 million VC fund for logistics and supply chain startups. http://axios.link/EigC

It's Personnel

Buddy Clarke stepped down as a managing director with energy-focused private equity firm Kayne Anderson, in order to join oil and gas company Spur Energy Partners, per Bloomberg.

IVP, a late-stage venture firm, added three investors: James Black (ex-Qatalyst Partners), Becca Faust (Goldman Sachs) and Karthik Ramakrishnan (Qatalyst). www.ivp.com

🚑 Graham Walmsley joined biotech-focused hedge fund Logos Capital as a general partner, per his LinkedIn page. He previously was a principal with Versant Ventures.

Final Numbers
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Reproduced from CivicScience; Chart: Axios Visuals

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Dan Primack

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