Jan 11, 2019

Axios Pro Rata

Top of the Morning

The junk bond crunch yesterday began to ease, thus giving some hope to private equity firms that have been forced to put new deals into a leveraged holding pattern.

  • Targa Resources Partners, a midstream energy unit of Targa Resources (NYSE: TRGP), sold $1.5 billion of high-yield bonds. This was twice what Targa had originally intended to sell, reflecting strong buyer interest.
  • This was the first non-investment-grade offering in over five weeks, which is a longer drought than was experienced during the financial crisis or after 9/11.
  • Targa will use proceeds to refinance debt and other general corporate purposes, not for an acquisition. So this doesn't necessarily swing the door open for leveraged buyouts, but at least may prime the pump a bit.

Activist investors launched a record number of campaigns last year, according to data compiled by Lazard. Per the FT:

226 companies faced activist campaigns last year, up from 188 in 2017, and the amount of capital invested in the targets was up to a high of $65 billion. Some of the biggest campaigns of 2018 included Third Point’s proxy fight with Campbell Soup, Pershing Square and Third Point’s efforts to drive United Technologies to split into three separate businesses, and Elliott’s nascent campaign to push Pernod Ricard to improve its profit margins.

Slack plans to follow Spotify's path to the public markets, utilizing a direct listing rather than an IPO, per the WSJ. Its plan reportedly is to go in Q2, although that of course remains subject to the government shutdown being resolved. Companies don't typically like to go public in summer months, so we could begin to see a calendar crunch if this absurdity goes on too much longer.

New firm alert: Chris Douvos, a longtime limited partner in VC funds, has quietly launched a new firm called Ahoy Capital.

  • This comes around six months after the passing of 44 year-old Jason Andris, who had been Douvos' partner at Venture Investment Associates.
  • Douvos basically spun out the existing VIA funds into Ahoy, in agreement with Andris' family, and SEC documents show he already closed on $32 million for a $100 million-targeted new fund. Former VIA executive Amy Zengo is Ahoy's COO.
  • The strategy is said to be fund-of-funds focused on seed and early-stage funds, with some flexibility for secondaries (direct and indirect) and company co-investments.
  • Hopefully this means Douvos will begin blogging again, as he was one of the only LPs ever to do so.

Ford Motor Co. yesterday announced it will shut down Chariot, an on-demand bus service it bought in 2016 for $65 million.

  • Ford's Chariot buy was obviously a bust, but company execs at CES told Axios that the automaker will continue unabated in its push toward multi-modal "mobility."

Podcast: Kim Hart fills in as host, with a look at how Amazon could come under regulatory scrutiny for its private-label products. Listen here.


Photo by Smith Collection/Gado/Getty Images

Postmates, a San Francisco-based on-demand delivery company, raised $100 million in Series F funding at a $1.85 billion valuation. New investor BlackRock was joined by return backers like Tiger Global. The entire round was primary capital (i.e., no one cashed out).

  • Why it's the BFD: Because this comes less than four months after Postmates raised $300 million at a $1.2 billion valuation, and is said to have resulted from inbound investor interest. On the upside, it reflects accelerated growth. On the downside, it reflects concerns over the deeper capital reserves of rivals like DoorDash and Uber.
  • Bottom line: "Raising money on the private markets just before raising it on the public markets makes sense for companies that see an IPO as less of a financing event and more of an opportunity for marketing or for shareholders to sell their stock. And no matter when, it’s hard to turn down money when offered at a higher valuation." — Teddy Schleifer & Jason Del Rey, Recode
Venture Capital Deals

OneLogin, a San Francisco-based provider of unified access management solutions, raised $100 million. Greenspring Associates and Silver Lake Waterman co-led, and were joined by return backers CRV and Scale Venture Partners. http://axios.link/FRcT

Laird Superfood, a Sisters, Ore.-based maker of superfood products, raised $32 million. Backers include new strategic partner WeWork. www.lairdsuperfood.com

Badi, a Spanish room-rental marketplace, raised $30 million in Series B funding. Goodwater Capital led, and was joined by Target Global and return backers Spark Capital and Mangrove Capital Partners. http://axios.link/Tc17

Decisiv, a Glen Allen, Va.-based provider of service relationship management solutions, raised $30 million from Kayne Partners. www.decisiv.com

TemperPack, a Richmond, Va.-based maker of recyclable packaging, raised $22.5 million in Series B funding led by Revolution Growth. http://axios.link/5dLl

Piano, a New York-based content monetization startup, raised $22 million in Series B funding led by Updata Partners. http://axios.link/JgYc

Gousto, a British meal company kit, raised £18 million from backers like Unilever. http://axios.link/6zUZ

Mr Jeff, a Spanish on-demand and subscription-based laundry and dry cleaning service, raised $12 million in Series A funding led by All Iron Ventures. http://axios.link/By4U

ThreeKit, a Chicago-based provider of 3D product configuration and visualization software, raised $10 million in seed funding led by serial entrepreneur Godard Abel. http://axios.link/PJWd

Carson, a New York-based services platform for unstaffed residential buildings, raised $3 million in seed funding led by BuildingLink. http://axios.link/3mwD

Private Equity Deals

🚑 Acuity Eyecare, a Dallas-based portfolio company of Riata Capital Group, acquired regional eyecare groups ABBA Eye Care (Colorado Springs) and EyeCare Specialties (Lincoln, Neb.). www.acuityeyecaregroup.com

Brentwood Associates acquired a majority stake in Afterburn Holdings, an Orangetheory Fitness franchisee in Houston.e

🍕 KKR is running into some minority shareholder resistance to its €432 million takeover offer for Spanish pizza delivery company Telepizza Group, according to Bloomberg. http://axios.link/v0Lw

United Technologies Corp. (NYSE: UTX) stopped the sale process for its Chubb fire-safety and security, “due to the recent market volatility.” Bloomberg reports that bids, from private equity firms Apax Partners, PAI Partners and Eurazeo, came in below the $3 billion that UTC had sought. http://axios.link/7eiw

Public Offerings

Illustration: Lazaro Gamio/Axios

Anheuser-Busch InBev is considering an IPO for its Asian operations, per Bloomberg. http://axios.link/0C6u

Liquidity Events

LNK Partners sold its minority stake in Beachbody, a Santa Monica, Calif.-based fitness and weight-loss company, to an undisclosed buyer. www.beachbody.com

More M&A

Orsted, a Danish energy group, has received at least four bids for its power distribution and residential customer business, including from Enel and SEAS-NVE, per Reuters. The deal could be worth around €2.5 billion. http://axios.link/DLTI

ProSiebenSat.1 Media, a German broadcaster, denied a local media report that it will be subject to a takeover effort from Axel Springer. http://axios.link/AVmC

Virgin Atlantic Airways agreed to buy British regional airline carrier Flybe Group (LSE: FLYB). http://axios.link/Rbex


Genesia Ventures held a $45 million first close for its second fund, which will make seed investments in Japanese and Southeast Asian startups. www.genesiaventures.com

PeakSpan Capital, a Silicon Valley-based VC firm, raised $265 million for its second fund, per an SEC filing. http://axios.link/iQMR

It's Personnel

Blue Wolf Capital Partners promoted Bennet Grill from to principal. www.bluewolfcapital.com

Carrick Capital Partners promoted Chris Wenner to managing director. www.carrickcapitalpartners.com

• EQT Partners, which is considering an IPO, promoted six directors to partner: Brian Chang (Singapore), Victor Englesson (Stockholm), Stephen Escudier (NYC), Carl Johan Renström (Stockholm), Magnus Tornling (Oslo) and Matthias Wittkowski (Munich).

Justin Kotzin joined General Atlantic as an operating partner and head of debt capital markets. He previously was with Morgan Stanley. www.generalatlantic.com

Cat Lee, former head of culture at Pinterest, joined consumer-focused VC firm Maveron as an investment partner. http://axios.link/KTHL

Perella Weinberg Partners plans to name co-founder Peter Weinberg as CEO, with Bob Steel transitioning to chairman, per Bloomberg.

Keisuke Sueyoshi, former head of Japanese M&A for Deutsche Bank, joined Goldman Sachs, per Bloomberg. http://axios.link/Q46A

Svoboda Capital Partners, a Chicago-based private equity firm, promoted David Rubin to principal. www.svoco.com

Final Numbers: U.S. private equity fundraising
Source: PitchBook 2018 US PE Breakdown report