Aug 6, 2018

Axios Pro Rata

By Dan Primack
Dan Primack

Situational awareness: PepsiCo CEO Indra Nooyi announced plans to step down, after 12 years at the helm.

Top of the Morning
Source: Giphy

Private equity spent much of 2012 in an unwanted spotlight, thanks to Mitt Romney's presidential run, and there are (very) early indications that it could get blinded again in 2020.

  • Deval Patrick, the former Massachusetts governor who now leads an impact investment fund for Bain Capital, did the Sunday show thing on CNN yesterday.
  • It was ostensibly to talk midterms, but host Jake Tapper also raised his association to Bain.
  • Both in terms of possible legislation stemming from the Toys "R" Us situation (with which neither Patrick nor his fund are involved) and to an ascendant left flank in the Democratic Party that might not take too kindly to Patrick's resume, were he to vie for the nomination.

Key exchange (edited for clarity, full transcript here):

TAPPER: These workers are looking for new legislation that would force these firms like Bain to fund severance payments to employees who are laid off as a result of private equity investments. Do you think that's a good idea?
PATRICK: It might be. I would want to look at that -- at that legislation. You know, circumstances are different. Not every deal works. Not every company succeeds. That happens in markets. And that's not always because of private equity...
TAPPER: Given the way that the Democratic Party went after Bain during that race and the way that Hillary Clinton faced so much criticism from the left for her speeches to Goldman Sachs in 2016, did you have any reservations at all about joining Bain?
PATRICK: I describe myself as a capitalist. I'm not a market fundamentalist. I don't think markets solve every problem just the right way. But I do believe in opportunity. I think we need an economy that is expanding and is expanding out, so it reaches people on the margins, not just up.
And I think there is a right way and a wrong way to do that. And I think impact investing is an incredibly interesting and exciting way to participate in growth capitalism. So, no, I don't buy all that.

Growth: Polaris Partners has quietly closed on $175 million for its first-ever growth fund, which will make both control and non-control investments in lower mid-market tech companies.

  • This is not a new investment strategy for Polaris, but it had previously been doing such deals out of a flagship fund that primarily focuses on early-stage tech and healthcare companies.

Today in Abraaj: The managers of the troubled firm's $375 million North Africa fund, led by Ahmed Badreldin, are asking liquidators for "an amicable separation" of their group from the rest of Abraaj, per a document viewed by WSJ Pro PE.

• Antitrust: Linde shares tanked this morning, after the German industrial gasses company disclosed that the U.S. FTC wants more divestitures before approving its planned $79 billion merger with Praxair (NYSE: PX).

• Data point: CrunchBase reports that there was a record number of $100 million+ funding rounds in July.

Office update: IWG, the London-listed owner of outsourced office company Regus, today said that it is ending takeover talks with its three remaining suitors— Starwood Capital, TDR Capital and Terra Firma — after none of them offered an acceptable price.

  • We had reported last month that rival WeWork was gearing up to "aggressively market" to Regus clients post-acquisition, which is something that it hasn't generally done to date. Particularly if the winner was Starwood.

🎙 Listen up: Today we kick off Week 3 of the Pro Rata podcast. Be sure to subscribe on Apple or other platforms.

Source: Giphy

Amcor (ASX: AMC), an Australian plastic packaging company, has agreed to buy Wisconsin-based rival Bemis (NYSE: BMS) for $5.25 billion in stock (12% premium to Friday's closing price).

  • Why it's the BFD: Because consolidation is the name of the game right now in packaging, due primarily to rising costs.
  • Bottom line: "Amcor generated sales of $9.1 billion last year servicing sectors ranging from food and beverages to pet care. The company, whose founding dates back to the 1860s, has grown into a global packaging giant employing more than 35,000. By acquiring Bemis, Amcor could bolster its offerings of so-called rigid plastic packaging." — Dana Mattioli & Ben Dummett, WSJ
Venture Capital Deals, an Indian online and offline fitness company, raised $120 million in Series C funding from IDG Ventures, Accel, Kalaari Capital, Chiratae Ventures and Oaktree Capital.

🚑 League, a Canadian employee health benefits platform, raised C$62 million. TELUS Ventures led, and was joined by Wittington Ventures and return backers OMERS, RBC Ventures, Real Ventures, Infinite Potential Group and BDC IT Venture Fund.

Ample, a San Francisco-based startup focused on “solving the energy delivery challenge for electric cars,” raised $31 million in Series A funding. Shell Ventures led, and was joined by Moore Strategic Ventures, Repsol Energy Ventures, Hemi Ventures and TRIREC.

Tianrang, a Chinese provider of enterprise data analytics, raised $26 million from Gaorong Capital, CMB International, Ziniu Fund and Wacai.

Stampli, a Mountain View, Calif.-based invoice management platform, raised $6.7 million in Series A funding. SignalFire led, and was joined by Bloomberg Beta, Hillsven Capital and UpWest Labs.

• Farmstand, a London-based fast-casual restaurant chain, raised $3 million in Series A funding led by Kindred Capital.

Private Equity Deals

AnaCap Financial Partners acquired the first lien corporate debt and loan portfolio of NKBM, a Slovenian bank that is majority owned by Apollo Global Management.

Avenu, a Herndon, Va.-based portfolio company of Mill Point Capital, has agreed to acquire the local and municipal constituent government software business of Conduent (NYSE: CNDT).

🍪 C.H. Guenther & Son, a San Antonio-based portfolio company of PPC Partners, has acquired Cookietree, a Salt Lake City-based maker of thaw-and-serve cookies and other bakery products.

Charterhouse Capital Partners acquired a majority stake in Funecap Groupe, a French funeral services business.

CoolSys, a Brea, Calif.-based refrigeration and HVAC company backed by Audax Private Equity, has acquired Energy Squared, a Princeton, N.J.-based energy design consulting firm.

Dyal Capital Partners acquired a passive minority stake in Golub Capital.

🍦 Strand Equity acquired a minority stake in Brooklyn-based Van Leeuwen Ice Cream.

Public Offerings

Five companies plan to price IPOs on U.S. exchanges this week: Amalgamated Bank, Bianco Genomics, Mesa Air Group, Pacific City Financial and Vaccinex.

Liquidity Events

⛽ Kosmos Energy (NYSE: KOS) agreed to buy Deep Gulf Energy, a Dallas-based deepwater oil and gas company operating in the Gulf of Mexico, from First Reserve for $1.23 billion in cash and stock.

Vista Equity Partners is in early talks to sell Tibco Software, a Palo Alto-based provider of infrastructure and business intelligence software, per Bloomberg. Vista paid $4.3 billion to take Tibco private in 2014.

More M&A

• Amcor (ASX: AMC), an Australian packaging company, has agreed to buy Wisconsin-based rival Bemis (NYSE: BMS) for around $5 billion.

• BlaBlaCar, a French carpooling company that has raised over $100 million from firms like Insight Venture Partners, agreed to buy Russian carpooling startup BeepCar.

• Didi Chuxing said it will invest $1 billion into its auto services unit, renamed Xiaoju Automobile Solutions, without announcing a rumored spinout.

Japan Tobacco (Tokyo: 2914) agreed to buy the tobacco business of Bangladesh’s Akij Group for approximately $1.5 billion.

Party City (NYSE: PRTY) rejected a takeover proposal earlier this year from listed Chinese toys and apparel maker Meisheng, according to Reuters.


Yunfeng Capital, a Chinese private equity firm co-founded by Jack Ma, raised $2.5 billion for its third fund, per an SEC filing.

Final Numbers
Source: Thomson Reuters Deals Intelligence
Dan Primack

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