May 5, 2017

Axios Pro Rata

By Dan Primack
Dan Primack

Friday greetings from my last day on the road for a bit. Just a reminder that you can get in touch or drop a dime via email (just hit reply), or by using our anonymous tip box at www.axios.com/tips. Plus all sorts of messaging apps, like Signal, Confide, Telegram and WhatsApp (Dan Primack / 857-472-3072). Here we go...

Top of the Morning

• Coming attractions: Bain Capital is now oversubscribed for its twelfth flagship buyout fund, according to multiple sources. It is expected to be capped a bit higher than the $7.3 billion vehicle closed in early 2014, with a final close slated for the end of July. Like in the past couple of Bain Capital funds, limited partners will have several choices in terms of fee structures.

• Play ball: Ryan Howard, the former Major League Baseball MVP who led the Phillies to a World Series in 2008, made sports headlines yesterday by announcing a comeback attempt that will begin in the minors. Less noticed was that Howard also signed on as a partner with SeventySix Capital, a venture firm based in the Philadelphia suburbs.

"Hopefully I'll play for another two or three years, but I'm also looking toward the future," Howard tells me. "One of the things about being a top-tier athlete is that you get to be around owners and pick their brain about business. I've always been interested in investing and entrepreneurs, and my agent made me an introduction to [SeventySix Capital co-founder Wayne Kimmel]."

Kimmel says that his firm, which is in the midst of raising a new fund, believes the sports world is integral to much of the convergence between the digital and physical worlds.

• Deal data: Global M&A is up 10% year-to-date over 2016, in terms of deal value, while the U.S. figure is 2%, according to Thomson Reuters. Global private equity deal value is up 44%, and the U.S. bump is 71%.

• Awaiting specifics: Apple announced this week that it is launching a $1 billion investment fund focused on the advanced manufacturing space, but the company is not yet disclosing any details about structure, strategy nor staffing.

• 1-star rating: Uber's legal troubles may be expanding from civil to civil and criminal.

• Crypto-keeper: Bitcoin Investment Trust yesterday doubled its proposed IPO size from $500 million to $1 billion. As we're written before, this is an attempt to mainstream bitcoin exposure, basically acting as an ETF that would reflect the cryptocurrency's value. By doubling the target to a whopping $1 billion, BIT managers are signaling their belief in widespread demand. Also voicing confidence are established financial firms Credit Suisse, KCG Americas and Wedbush Securities, which signed on as authorized participants (i.e., liquidity providers).

The real question now is what the SEC does, given that just two months ago it shot down a proposed bitcoin ETF that would have been managed by the Winklevoss twins, arguing that major bitcoin markets are particularly prone to price manipulation due to a lack of overseas regulation. BIT is structured a bit different and already is publicly-traded on the OTC, but its capital target remains theoretical until the SEC gives its blessing.

• Have a great weekend...

The BFD

Goldman Sachs has agreed to acquire around a 12% stake in the management company of energy-focused private equity firm Riverstone for around $500 million. This comes just one day after Goldman also purchased less than a 10% stake in Accel-KKR.

  • Why it's a big deal: There once was a belief that a slew of private equity firms would file for IPOs, both for expansion capital and so that firm founders could cash in on brand equity. But that worm has turned and been backed over by a truck. Now we have an accelerating trend of PE firms selling minority stakes to shops like Goldman Sachs, which is raising a $2 billion fund for this purpose (out of a group called Petershill that was originally formed a decade ago to buy into hedge funds). Other buyers include Dyal Capital Partners, Hycrofft Capital and (coming soon) AlpInvest. On this particular case, it also reflects how Riverstone's late aughts pay-to-play scandal ― which prompted The Carlyle Group to cut ties with the firm ― is no longer a reputational risk.
  • Energy angle: "The deal represents a vote of confidence in Riverstone, which suffered when oil prices collapsed in late 2014 but has recovered as energy prices stabilized, according to securities filings. While some of its big investments, such as oil explorers EP Energy and Fieldwood Energy, remain underwater or flat, Riverstone has had big profits in others, particularly companies that drill in the Permian Basin in West Texas." ― Ryan Dezember
Venture Capital Deals

• Signifyd, a San Jose, Calif.-based provider of fraud protection solutions for e-commerce businesses, has raised $56 million in Series C funding. Bain Capital Ventures led the round, and was joined by return backers like Menlo Ventures and American Express Ventures. http://tcrn.ch/2qFnqxi

• Soylent, a Los Angeles-based developer of food replacement products, has raised $50 million in new VC funding. GV led the round, and was joined by Tao Capital Partners and return backers Lerer Hippeau Ventures and Andreessen Horowitz. http://bit.ly/2pMCqvc

• Fuze, a Cambridge, Mass.-based cloud productivity and collaboration platform for the enterprise, has raised $30 million in new VC funding. No investors were disclosed. The company earlier this year raised $104 million from Wellington Management, Greenspring Associates, Summit Partners, Bessemer Venture Partners and G20. http://bit.ly/2qxjt0n

• Ultrahaptics, a UK-based developer of touchless interfaces that utilize ultrasound, has raised £17.9 million in Series B funding from Dolby Family Ventures, Woodford Investment Management, Cornes and the IP Group. http://tcrn.ch/2p6PreY

• Crew, a San Francisco-based communication platform for mobile workers, has raised $15 million in second-round funding from Greylock and return backer Sequoia Capital. http://bit.ly/2pFj6jf

• MPP Global, a UK-based ecommerce monetization platform, has raised £12 million in Series B funding from Albion Ventures and Grafton Capital. http://bit.ly/2pejN02

• SimpleLegal, a San Francisco-based legal spend management software, has raised $10 million in new VC funding, per an SEC filing. No investors were identified. www.simplelegal.com

• RTX, a London-based provider of payment and settlement solutions to the global carrier market, has raised £6 million in new VC funding from Boost & Co. www.rtx.routetrader.com

• Fastdata.io, a Santa Monica, Calif.-based real-time stream processing startup, has raised $1.5 million in VC funding from backers like Nvidia. http://bit.ly/2q4PaOy

Private Equity Deals

• Avantor, a Center Valley, Penn.-based portfolio company of New Mountain Capital has agreed to acquire VWR (Nasdaq: VWR), a Radnor, Penn.-based lab supplies distributor, for approximately $6.4 billion (including assumed debt), or $33.25 per share (17% premium to Tuesday's closing price).

• Golden Gate Capital has agreed to acquire GAL, a Bronx, N.Y.-based maker of elevator components and systems. No financial terms were disclosed. http://bit.ly/2pbuEa9

• Jaguar Growth Partners has acquired a 9.7% equity stake in listed Mexican hotel operator Hoteles City Express. www.cityexpress.com

• Legends Hospitality, a New York-based stadium management company owned by the NY Yankees and Dallas Cowboys, has raised an undisclosed amount of equity funding from New Mountain Capital at a reported $700 million valuation. https://bloom.bg/2p2XzSH

• Santédiscount, a French online health and beauty e-commerce company, has raised an undisclosed amount of equity funding from Ardian. http://bit.ly/2pF0oIe

• Webster Capital has acquired Matilda Jane Clothing, a Fort Wayne, Ind.-based maker of specialty apparel and accessories, from CID Capital. No financial terms were disclosed. www.matildajaneclothing.com

Public Offerings

• Advantage Solutions, an Irvine, Calif.-based provider of sales and marketing solutions, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol ADV, with Goldman Sachs and Morgan Stanley serving as lead underwriters. The company reports $31 million of net income on $2.1 billion in revenue for 2016. Sponsors include CVC Capital Partners and Leonard Green & Partners.

• BioHaven Pharmaceutical, a New Haven, Conn.-based developer of drugs to treat neurological diseases, raised $168 million in its IPO. The company priced 9.9 million shares (upsized from 8.33m) at $17 per share, for a fully diluted market value of $699 million. The pre-revenue company will trade on the NYSE under ticker symbol BHVN, while Morgan Stanley was listed as left lead underwriter. Shareholders include Portage Biotech (28.3% pre-IPO stake), Vivo Capital (6.7%) and RA Capital (5.1%). http://bit.ly/2pbBP29

• Liberty Oilfield Services, a Denver-based provider of hydraulic fracturing services, has postponed its planned IPO after cutting the terms earlier this week. Morgan Stanley and Goldman Sachs were serving as lead underwriters for Liberty, whose shareholders include Riverstone Holdings. http://bit.ly/2pLIuC5

• Ovid Therapeutics Inc., a New York-based developer of therapies for rare and orphan brain diseases, raised $75 million in its IPO. The company priced 5 million shares at $15 per share ($15-$17 range), for an initial market cap of around $369 million. It will trade on the Nasdaq under ticker symbol OVID, while Citi was listed as left lead underwriter. The company in 2015 raised a $75 million Series B round led by Fidelity, which was joined by Sanofi-Genzyme BioVentures, Tekla Capital Management, Sphera Global Healthcare Fund, Jennison Associates, Redmile Group, Cormorant Asset Management and DoubleLine Equity Healthcare Fund. www.ovidrx.com

Liquidity Events

EviCore, a Bluffton, S.C.-based healthcare benefits manager controlled by General Atlantic, is exploring either a sale or IPO that could value the company north of $4 billion, according to Reuters. http://reut.rs/2pelzye

• Orix Corp. (Tokyo: 8591) has agreed to acquire a 22.1% stake in Israeli geothermal energy company Ormat Technologies (NYSE: ORA) for $627 million. Sellers include First Israel Mezzanine Investors. http://reut.rs/2qKhty5

More M&A

• Canadian Imperial Bank of Commerce (TSX: CM) has increased the cash portion of its $4.9 billion takeover offer for Chicago-based lender PrivateBancorp (Nasdaq: PVTB) ahead of a May 12 shareholder vote. http://reut.rs/2pbiZrW

Fundraising

• EIG Global Energy Partners has closed its debut private debt fund with $2 billion in capital commitments. www.eigpartners.com

• Samena Capital, a Dubai-based private equity firm, has held a $375 million first close on its third special situations fund, which is targeting a total of $700 million, according to Private Equity International. http://bit.ly/2qznJg1

Valor Equity Partners, a Chicago-based private equity firm, is raising up to $750 million for its fourth fund, per an SEC filing. www.valorep.com

It's Personnel

• Keith Gordon, former EVP and COO of NuCO2, has joined consumer-focused private equity firm Brentwood Associates as an operating partner. www.brentwood.com

• Dorte Hoppner, former CEO of trade group Invest Europe, has been named chief operating officer of the Riverside Europe Fund. http://bit.ly/2p3PAVj

• Matt Walsh has joined Credit Suisse as a managing director and co-head of its TMT equity capital markets group, according to Reuters. He previously was in the same position of Boa Merrill Lynch. http://reut.rs/2qKm6IE

• Johan Van de Steen, a former partner with both KKR and Vision Capital, has joined IK Investment Partners as an operating partner. www.ikinvest.com

Final Numbers
Dan Primack