A quick announcement: Mike Allen is taunting me, by launching an afternoon newsletter to complement his outstanding Axios AM roundup. It's called Axios PM, and you can sign up for it (and all other Axios newsletters) by going here. Okay, here we go...
Payless, the Kansas-based footwear retailer that filed for Chapter 11 bankruptcy protection last month, said in a court filing that it's investigating possible claims against private equity sponsors Golden Gate Capital and Blum Capital Partners. At issue is more than $350 million worth of fees and dividends that the two firms reportedly received from Payless during their five-year ownership periods.
- Why it's the BFD: If Payless were to prove some sort of sponsor liability related to dividend recaps, it would send a chill through a private equity industry that uses such techniques to juice returns (often without enough regard for the possible consequences).
Private Equity Deals
• Good Sportsman Marketing, a Dallas-based portfolio company of Huron Capital, has made two acquisitions: Scent Web, maker of a delivery mechanism for dispensing deer scent attractants, from Michigan's A-Way Hunting Products; and Oregon-based Bullseye Camera Solutions, a maker of shooting camera systems. No financial terms were disclosed. http://bit.ly/2rEyoGG
• GSR Capital of China is in advanced talks to acquire Nissan Motor Co.'s stake in a lithium-ion auto battery joint venture with NEC Corp. for around $1 billion, according to Bloomberg. https://bloom.bg/2r2iJOK
• Staples (Nasdaq: SPLS) has rejected a takeover offer from Cerberus Capital Management, according to Bloomberg. Sycamore Partners also has an offer on the table for the office supplies retailer, which has a market cap just south of $6 billion. http://bit.ly/2qqYf0d
• Web.com (Nasdaq: WEB), a Jacksonville, Fla.-based Internet domain name registrar, is in talks with several private equity firms after receiving takeover approaches, according to Reuters. The company has a current market cap of around $980 million. http://reut.rs/2s2u4xm
• Creative Artists Agency has teamed with Chinese film company Bona Film Group to launch a $150 million film production investment fund. http://bit.ly/2qVCl8O
• The New Jersey State Investment Council, a $74 billion pension system with nearly an 11% exposure to private equity, plans to slow down its allocation to the asset class due to "record levels of fundraising and dry powder [that] offsets the long-term favorable profile" of private equity. http://bit.ly/2qmGQGw
• Star Mountain Capital, a New York-based lower middle-market debt investor, has closed its second fund with $300 million in capital commitments. www.starmountaincapital.com
🚑 Kevin Chen has stepped down as a partner with Sequoia Capital China in order to launch his own healthcare-focused VC funding, according to China Money Network. He had joined Sequoia in 2014. http://bit.ly/2rXy43a
• The Sterling Group, a Houston-based middle-market private equity firm, has promoted Brad Staller to partner. He sits on the boards of portfolio companies Time Manufacturing, ProcessBarron and Specified Air Solutions. www.sterling-group.com