Sep 10, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

🎧 Axios Re:Cap focuses on speedbumps on the road to a coronavirus vaccine, with the reporter who helped break news of the AstraZeneca trial stoppage.

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Top of the Morning
Source: Giphy

LVMH yesterday broke off its $16.2 billion engagement to Tiffany & Co., and then the two sides sprinted to file competing lawsuits in Delaware.

  • What we learned: The French government may have played a key role in the split, asking LVMH to delay the deal close for two months past the agreed-upon deadline.

Details: The request came via an August 31 letter from France's foreign affairs minister, who is the equivalent to the U.S. secretary of state. According to an English translation disclosed by Tiffany, it reads in part...

"The American government has decided to implement an additional customs duty on the import of certain French goods, in particular goods in the luxury sector, in reaction to France adopting a digital services tax, with the U.S. deferring the application thereof until January 6, 2021.
France considers these measures legally objectionable. ... Because the implementation of these tariffs may affect France’s external relations ... proposed investments by French companies in sectors that could be subject to such sanctions must be reevaluated in light of this new context.
You should defer the closing of the pending Tiffany transaction until January 6, 2021. I am sure that you will understand the need to take part in our country’s efforts to defend its national interests."

Basically, LVMH told Tiffany: "I really like you, but my parents hate your parents, so I just don't think it'll work out right now."

Tiffany didn't take the rejection in stride. It seems to believe LVMH is using the French government request as cover for its own cold feet, referencing how LVMH previously tried to negotiate deal terms under the guise of "U.S. social justice protests and the COVID-19 pandemic."

  • It wants Delaware Chancery Court to enforce the deal.
  • It also got some backup via a new Bloomberg report that LVMH chairman Bernard Arnault "asked for help from the French government in an effort to pull out of [the deal]."

LVMH this morning said not only that it will "defend itself vigorously," but also that it will file a lawsuit of its own — claiming Tiffany violated the deal terms through "crisis mismanagement."

  • Specifically, LVMH says it will cite dividend distributions during the pandemic.

The bottom line: Breakups can be messy, particularly when there's a third party involved.

The BFD

Illustration: Aïda Amer/Axios

Simon Property Group (NYSE: SPG) and Brookfield Property Partners (Nasdaq: BPY) have tentatively agreed to acquire most of the retail operations of JCPenney, as part of a deal that will help the bankrupt retailer avoid liquidation.

  • Why it's the BFD: This could save upwards of 70,000 jobs.
  • Deal details: The agreement values JCP at around $1.75 billion, with lenders putting up $300 million for both the company's distribution arm and ownership of 161 of its roughly 650 remaining stores. JCP also is in talks with Wells Fargo for $2 billion in new financing.
  • The bottom line: "Simon has already reached deals this year to save men’s suit maker Brooks Brothers and denim retailer Lucky Brand from bankruptcy, teaming up with the apparel licensing firm Authentic Brands Group to do so. It also previously teamed up with ABG and Brookfield to save Forever 21. Brookfield in May said it was planning to spend $5 billion to save retailers hurt by the pandemic." — Lauren Thomas, CNBC
Also...

TikTok clock: We're now just days away from President Trump's deadline, and hopes of a deal appear to be fading. Several outlets now report that TikTok and parent company ByteDance are seeking a workaround that could satisfy both the U.S. and Chinese governments, although details remain scarce.

  • The bottom line: If a third way is found by next Tuesday night, don't be surprised if it's more about Trump and Xi saving face than it is about the national security of either country.
  • Go deeper: Inside TikTok's killer algorithm.

🚑 Follow-up appointment: Zocdoc never replied to requests for comment on the lawsuit we discussed yesterday.

  • Also worth mentioning that the plaintiff, deposed Zocdoc CEO Cyrus Massoumi, launched a VC firm in 2016 with Indiegogo founder Slava Rubin, but it does not appear to have ever held a final close.
  • As we noted in the piece, Massoumi wants to be installed as Zocdoc's CEO.
Venture Capital Deals

• Orchard, a New York-based home buying and selling platform, raised $69 million in Series C funding. Revolution Growth led, and was joined by return backers FirstMark Capital, Navitas, Accomplice, and Juxtapose. http://axios.link/dQNr

🚑 OncoImmune, a Rockville, Md.-based developer of leukemia and COVID-19 therapeutics, raised $56 million in Series B funding. HM Capital co-led alongside an undisclosed investor, and was joined GBA Fund, GF Xinde, and return backers 3E Bioventures Capital and Kaitai Capital. http://axios.link/oHKP

🚑 Casma Therapeutics, a Cambridge, Mass.-based biotech focused on muscular dystrophy, raised $50 million in Series B funding. The Column Group led, and was joined by Eventide Asset Management, Schroder Adveq, and return backer Third Rock Ventures. http://axios.link/Gbym

EverC, an anti-online money laundering startup, raised $35 million in Series B funding. Red Dot Capital Partners led, and was joined by Maor Investments and return backers Viola Ventures, Arbor Ventures, and American Express Ventures. www.everc.com

Groww, an Indian investment app targeting millennials, raised $30 million in Series C funding. YC Continuity led, and was joined by return backers Sequoia India, Ribbit Capital, and Propel Ventures. http://axios.link/S0Hq

StackRox, a Mountain View, Calif.-based developer of Kubernetes-native container security solutions, raised $26.5 million in Series C funding. Menlo Ventures led, and was joined by Highland Capital Partners, HP Enterprise, Sequoia Capital and Redpoint Ventures. http://axios.link/ZAKr

🚑 MiNA Therapeutics, a London-based developer of RNA activation therapeutics, raised £23 million in Series A funding led by aMoon. http://axios.link/yx0h

Iron Ox, a San Carlos, Calif.-based based developer of indoor robotic farms, raised $20 million in Series B funding. Pathbreaker Ventures led, and was joined by Crosslink Capital, Amplify Partners, ENIAC Ventures, R7 Partners, Tuesday Ventures, At One Ventures, and YC. http://axios.link/VU8m

Descartes Underwriting, a Paris-based corporate insure-tech startup, raised $18.5 million in Series A funding. Serena and Cathay Innovation co-led, and were joined by seed backer BlackFin Capital Partners. http://axios.link/UAJp

Klue, a Vancouver-based competitive enablement platform, raised C$15 million in Series A funding. Craft Ventures led, and was joined by HWVP and return backers OMERS Ventures, Rhino Ventures, and BDC Ventures. http://axios.link/P3qm

Panther Labs, a San Francisco-based enterprise cybersecurity startup, raised $15 million in Series A funding. Lightspeed Venture Partners led, and was joined by S28 Capital, Innovation Endeavors, and Fathom Capital. http://axios.link/zamI

🚑 LightForce Orthodontics, a Boston-based provider of 3D-printed braces, raised $14 million in Series B funding. Tyche Partners led, and was joined by return backers AM Ventures and Matrix Partners. http://axios.link/yo18

Curio, a London-based audio journalism platform, raised $9 million in Series A funding. Earlybird VC led, and was joined by Draper Esprit, Cherry Ventures, and Horizons Ventures. http://axios.link/tKNJ

Salaryo, an Israeli provider of fintech solutions for freelancers and startups, raised $5.8 million from Variant Investments, KEN Investments, Techstars Ventures and Michael Ullmann. http://axios.link/MwUI

Behold, a Los Angeles-based personalized shopping app, raised $5 million from Upfront Ventures, Greycroft Ventures, Troy Capital Partners, and TenOneTen Ventures. www.shopbehold.com

Surefire Local, a Vienna, Va.-based online marketing platform for local businesses, raised $3 million from Timia Capital. http://axios.link/UZYx

Private Equity Deals

Atar Capital acquired WinCup, a Stone Mountain, Ga.-based maker of biodegradable foodservice packaging products, from BlackRock. www.wincup.com

Astute, a Columbus, Ohio-based customer engagement company backed by Audax Private Equity, acquired Socialbakers, a Czech unified social media marketing platform that raised over $30 million from Index Ventures, Earlybird VC, and Draper Esprit. http://axios.link/8OQr

EQT agreed to buy Spanish online real estate listings site Idealista for €1.3 billion from Apax Partners. http://axios.link/2zyI

Eurazeo said it will buy the 20% stake it didn’t already hold in Paris-based mid-market investment firm Idinvest Partners. http://axios.link/lAWQ

🚂 Kansas City Southern (NYSE: KSU), one of North America’s largest railroad operators, rejected around a $20 billion takeover offer from The Blackstone Group and Global Infrastructure, per the WSJ. http://axios.link/24JN

ParkerGale Capital acquired a majority stake in SMA Technologies, a Houston-based provider of workload automation software. www.smatechnologies.com

ThreatConnect, an Arlington, Va.-based security operations platform backed by Providence Strategic Growth, acquired Nehemiah Security, a Washington, D.C.-based cyber risk quantification company. www.threatconnect.com

Public Offerings

Academy Sports + Outdoors, a KKR-backed sporting goods retailer, filed for an IPO that Renaissance Capital estimates could raise $500 million. The Katy, Texas-based company plans to list on the Nasdaq (ASO) with Credit Suisse as lead underwriter, and reports $120 million of net income on $4.8 billion in revenue for the fiscal year ending Feb. 1, 2020. http://axios.link/Jboq

• The Carlyle Group is prepping IPOs for two Brazilian portfolio companies: Restaurant chain Madero and furniture retailer Tok&Stok, per Reuters. http://axios.link/4rI4

• Ceska Zbrojovka Group, a Czech firearms manufacturer, is prepping what would be Prague’s first IPO since 2016. http://axios.link/1tvB

🚑 Codiak BioSciences, a Cambridge, Mass.-based developer of exosome therapeutics, refiled for a $100 million IPO. It originally filed in April 2019, but withdrew the registration later that year. The pre-revenue company plans to list on the Nasdaq (CDAK) and has raised $168 million in VC funding from firms like Arch Venture Partners (28.3% stake), Flagship (18.9%) and Fidelity (14.1%). http://axios.link/ibMZ

🚑 Dyne Therapeutics, a Cambridge, Mass.-based biotech startup focused on rare types of muscle diseases, set IPO terms to 10.3 million shares at $16-$18. It would have a fully-diluted market value of $782 million, were it to price in the middle, and plans to list on the Nasdaq (DYN) with JPMorgan as lead underwriter. The pre-revenue company raised $165 million in VC funding from Atlas Venture (31.1% pre-IPO stake), Forbion Capital, (19.6%), MPM Capital (15.8%), RA Capital (6.9%), Vida Ventures (6.9%), Citadel (5.1%), and Wellington Management (5.1%). http://axios.link/5zIl

GPA, a listed Brazilian food retailer, said it may spin off its Assai wholesale unit via an IPO. http://axios.link/sRHW

Lightspeed POS, a Canadian provider of point-of-sale software, filed for a $376 million listing on the NYSE (LSPD). The company currently trades in Toronto. http://axios.link/C8WI

• Petz, a Brazilian pet supplies retailer controlled by Warburg Pincus, raised around $571 million in a Sao Paulo IPO. http://axios.link/n58z

SPAC Stuff

Dune Acquisition, a SaaS-focused SPAC formed by delta2 Capital, filed for a $130 million IPO. http://axios.link/wPde

NavSight Holdings, a national security-focused SPAC led by Robert Coleman (founder of Six3 Systems), raised $200 million in its IPO. http://axios.link/MwoF

Perella Weinberg Partners is forming a SPAC to buy a women-owned and led business, with aims of raising around $200 million in an IPO, per Bloomberg. http://axios.link/aymB

Prime Impact Acquisition I, a tech-focused SPAC led by former Western Digital execs, raised $300 million in its IPO. http://axios.link/ADrD

Starboard Value Acquisition, a SPAC formed by activist investor Starboard Value, raised $360 million in an upsized IPO. http://axios.link/Iayd

Liquidity Events

CVC Capital Partners and CPPIB are weighing a 2021 sale process or IPO for Petco Animal Supplies, per Bloomberg. A deal could value Petco at around $6 billion (including debt). http://axios.link/1Ji2

🚑 Royal Philips (NYSE: PHG) acquired Intact Vascular, a Wayne, Penn.-based developer of devices for minimally-invasive peripheral vascular procedures, for upwards of $360 million ($275m upfront). Intact Vascular had raised around $155 million in VC funding from firms like NEA, Quaker Ventures, HIG BioHealth Partners, and Vensana Capital. http://axios.link/hKgR

More M&A

Reliance Retail of India plans to offer around a $20 billion stake to Amazon (Nasdaq: AMZN), per Bloomberg. http://axios.link/g95M

Fundraising

TCV is targeting $3.25 billion for its eleventh fund, per public pension fund documents. www.tcv.com

It's Personnel

Citi announced that Jane Fraser will take over as CEO next February, succeeding Michael Corbat. She currently leads Citi's global consumer banking unit, and would become the first woman to lead a major U.S. bank. http://axios.link/Kv1L

Prashanth Cherukuri joined Piper Sandler as a managing director of tech investment banking. He previously was with Jefferies. www.psc.com

Alessandra Christiani joined The Halifax Group as VP of biz dev. She previously was an investment manager at Capital Aviation Group. www.thehalifaxgroup.com

🚑 Cressey & Co., a health care-focused PE firm, promoted Steve Dildine to partner and Ryan Moseley to principal. www.cresseyco.com

Alexandra Lebenthal, former president and CEO of Lebenthal & Co., joined Houlihan Lokey as a senior advisor to its financial services group. www.hl.com

Osceola Capital promoted Patrick Watkins to principal. www.osceola.com

Final Numbers
Data: SPAC Research through 6/30/20. Chart: Andrew Witherspoon/Axios
  • Caveat, per Axios' Kia Kokalitcheva: More than 50 SPACs have priced IPOs since the end of June, including the largest one of all time.
Dan Primack

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