Axios Pro Rata

A green watering can with a dollar sign painted on it.

November 30, 2023

πŸ€– Situational awareness: Microsoft will receive non-voting observer rights on the OpenAI board. Also, happy 1st birthday to ChatGPT.

Top of the Morning

Illustration of a semitruck and shipping containers surrounded by abstract shapes and money elements.

Illustration: Gabriella Turrisi/Axios

When trucking company Yellow went bankrupt in August, it seemed that U.S. taxpayers would eat much of a $700 million loan from the pandemic-era CARES Act.

What's new: There's an offer on the table that would repay every dime. But a large number of prominent politicians, from both sides of the aisle, are asking the Treasury Department to punt.

Details: Estes Express earlier this fall offered $1.53 billion "stalking horse" bid for Yellow's shipment centers. That would easily be enough to repay around $500 million in debt held by senior lender Citadel β€” which purchased the notes from Apollo, post bankruptcy β€” plus other creditors and the CARES Act loan.

  • Then we got a wrinkle, just ahead of the bankruptcy auction kicking off this past Tuesday. It was a bid by the owner of trucking company Jack Cooper to restart Nashville-based Yellow, not just scoop up logistics properties or other assets.
  • This new proposal, as reported by the NY Times, would repay private creditors immediately, but postpone the Treasury loan repayment to 2026 from 2024.

Politics: It's this second deal that's being supported, at least in principle, by a chorus of U.S. senators, including Elizabeth Warren (D-Mass.), Josh Hawley (R-Mo.), Sherrod Brown (D-Ohio), Roger Marshall (R-Kan.), and Bernie Sanders (I-Vt.).

  • Each signed public letters asking Treasury to extend the maturity date of the CARES Act loan to Yellow, although it remains unclear if Treasury has the legal right to do so.

Wait, what? The political argument is that Sarah Amico, the exec chair of Jack Cooper and a former U.S. Senate candidate, could rehire thousands of Teamsters union truckers and others who lost their jobs when Yellow shut down. Moreover, doing so would be in keeping with the spirit of the original loan.

  • The risk, of course, is that this is pulling defeat from the jaws of victory for U.S. taxpayers, particularly given that Jack Cooper itself filed for bankruptcy in 2019.
  • Moreover, the "less-than-truckload" niche in which Yellow plays is under secular strain.
  • That's likely why Rep. French Hill (R-Ark.), a former member of the CARES Act Oversight Commission, said via a spokesperson that he doesn't believe Treasury should extend or modify the maturity terms of Yellow's loan.

The bottom line: We could know the outcome by as early as tomorrow.

Editor's note: This story has been updated to reflect that the rival bid for Yellow Trucking is being led by a new entity formed by Sarah Amico, not by Jack Cooper.

The BFD

Illustration of stacks of one hundred dollar bills laid in a medical cross shape

Illustration: Annelise Capossela/Axios

Cigna (NYSE: CI) is in merger talks with Humana (NYSE: HUM), per multiple reports.

Why it's the BFD: The combined company would become one of the nation's largest health insurers, rivaling market leaders UnitedHealth and Aetna owner CVS Health.

Details: The deal would be structured in a combination of cash and stock, with negotiations ongoing. If finalized, possibly by year-end, it's almost certain to receive antitrust scrutiny.

  • Bloomfield, Conn.-based Cigna closed trading yesterday with a $77 billion market cap, while Louisville, Ky.-based Humana's was $59.4 billion.

The bottom line: "Cigna, which had revenue of about $181 billion last year, would be able to marry its huge pharmacy-benefit unit, which manages drug plans, and its strength in commercial insurance with Humana's big position in the fast-growing Medicare segment, something Cigna has long sought." β€” WSJ

Venture Capital Deals

β€’ Wormhole, a cross-blockchain messaging protocol spun out of Jump Trading Group, raised $225m at a $2.5b valuation from Brevan Howard, Coinbase Ventures, Multicoin Capital, ParaFi, Dialectic, Borderless Capital, Arrington Capital and Jump Trading. https://axios.link/3T2AzQE

β€’ Castore, a British performance sportswear brand, raised Β£145m. Raine Partners led, and was joined by Hanaco Ventures and Felix Capital. https://axios.link/47XbCKK

β€’ BlueVoyant, a New York-based cyber threat intelligence firm, raised more than $140m in Series E funding co-led by Liberty Strategic Capital and Istari. The company also acquired Conquest Cyber, a Miramar, Fla.-based startup focused on the government and defense sectors. https://axios.link/3T0o0W1

πŸš€ Ursa Major, a Berthoud, Colo.-based rocket engine maker, raised $138m in Series D and Series D-1 funding. Explorer 1 Fund and Eclipse co-led, and were joined by RTX Ventures, BlackRock, Exor Ventures, Mack & Co. and XN. www.ursamajor.com

β€’ Together, a Menlo Park, Calif.-based cloud platform for generative AI training, raised $102.5m in Series A funding. Kleiner Perkins led, and was joined by Nvidia and Emergence Capital Partners. https://axios.link/3uCnSBT

β€’ Kognitos, a San Jose, Calif.-based provider of back-office automation software, raised $20m. Khosla Ventures led, and was joined by Clear Ventures, Engineering Capital and Wipro Ventures. https://axios.link/3uEamO2

β€’ Adionics, a French direct lithium extraction company, raised $27m in Series B funding from SQM, Bpifrance, Supernova Invest, CΓ©leste Management and Ovive. www.adionics.com

β€’ Flow48, a UAE-based SME lending startup, raised $25m in pre-Series A funding from Speedinvest, Daphni, 212, Blockchain Founders Fund, Unpopular Ventures, Endeavor Catalyst and TLG. https://axios.link/3R3bEK8

β€’ Squint, a San Jose, Calif.-based AI startup that helps companies build manufacturing workflows, raised $13m. Sequoia Capital led, and was joined by Menlo Ventures. https://axios.link/3R4nWlt

β€’ Again, a Danish developer of bacteria that converts CO2 into sustainable chemicals, raised $10m in seed funding from Acme, GV, and Atlantic Labs. https://axios.link/3Gm0XNW

β€’ Coinchange, a Toronto-based DeFi yield platform, raised US$10m in funding from G1 VC, Spirit Blockchain, Good News Ventures, K2 CA and Mintfox. https://axios.link/3QZ3XV5

β€’ PhiCommerce, an Indian omnichannel payment startup, raised $10m in Series A1 funding. Beenext led, and was joined by Opus Ventures. https://axios.link/46AUd9s

β€’ Hang Media, a DTC sports platform, raised $9.2m in Series A funding led by The Operating Group. https://axios.link/3uzTOH9

πŸš‘ Clayful, a Davie, Fla.-based provider of on-demand mental health support to students, raised $7m led by Reach Capital. www.clayfulhealth.com

β€’ Mummolin, a Cheyenne Wyo.-based decentralized bitcoin mining pool, raised $6.2m in seed funding. Jack Dorsey led, and was joined by Accomplice, Barefoot Bitcoin Fund, MoonKite, NewLayer Capital and the Bitcoin Opportunity Fund. https://axios.link/3N6NsFz

β€’ Retrocasual, a Redmond, Wash.-based manufacturing process management platform, raised $5.3m co-led by Glasswing Ventures, One Way Ventures and Indicator Ventures. www.retrocasual.com

β€’ @Hotel, an Annandale, Va.-based booking platform for consumer travel, raised $4m from 20GROWTH, PAR Capital and individual angels. www.athotel.com

β€’ Lucky F*ck Energy Drink raised $4m in seed funding led by Imaginary Ventures. www.luckybevco.com

β€’ Acctual, a New York-based accounting platform for crypto companies, raised $3.9m in seed funding. Third Prime and IDEO co-led, and were joined by Alchemy Ventures, OrangeDAO and Soma Capital. https://axios.link/3N7lbP8

β€’ Fr8 Labs, a Singaporean freight logistics tech startup, raised $1.5m from East Ventures, FEBE Ventures, Kaya Founders, Mulia Sky Capital, Seedstars International Ventures and Venturra. www.fr8labs.co

β€’ Conduiit, a New York-based fintech for film and TV productions, raised $1m in pre-seed funding co-led by Fiat Ventures and Aperture VC. www.conduiit.app

β€’ HempStreet, an Indian developer of cannabis-based treatments for common health ailments, raised $1m in pre-Series A funding led by Waahlin Holdings. https://axios.link/46B6kTR

Private Equity Deals

β€’ Avenue Sports Fund, alongside Ryan McKillen (ex-Uber) and champion sailor Mike Buckley, agreed to buy the U.S. team of international sailing league SailGP for more than $40m. https://axios.link/3GnMvow

🐢 Blackstone agreed to acquire Rover Group (Nasdaq: ROVR), a Seattle-based pet walking and sitting marketplace, for $2.3b. The $11 per share price represents a 29.4% premium to Tuesday's closing price. Rover went public via SPAC in mid-2021. https://axios.link/3uH64pm

β€’ EagleTree Capital acquired Summit Hill Foods, the Rome, Ga.-based owner of the Better Than Bouillon and Original Louisiana Hot Sauce brands. www.shfoods.com

β€’ Madison Dearborn Partners acquired T2S Solutions, a Belcamp, Md.-based provider of engineering and related services to the DoD and other U.S. government agencies. https://axios.link/3uLLXGf

β€’ New State Capital Partners acquired Agility Recovery Services, an Atlanta-based provider of subscription-based disaster recovery and business continuity services. www.agilityrecovery.com

β€’ White Glove, a Birmingham, Mich.-based portfolio company of Rockbridge Growth Equity, agreed to merge with TouchFuse, a Tampa, Fla.-based marketing platform for financial advisors. www.whiteglove.com

Public Offerings

β€’ Air Astana, Kazakhstan's national airline, is hiring bankers for an early 2024 dual listing in London and at home, per Bloomberg. https://axios.link/3GnZkPK

β€’ Dubai Taxi said it received over $41b in subscriptions for its $315m local IPO. https://axios.link/410iNiO

β€’ PayU, Prosus' Indian payments and fintech unit, is seeking an IPO within the next year, according to Prosus interim CEO Ervin Tu. https://axios.link/46DAl5F

SPAC Stuff

β€’ Fenix 360, a Singaporean social network focused on creator monetization, agreed to go public at an implied $610m valuation via Duet Acquisition Corp.(Nasdaq: DUET). https://axios.link/3uLKDDh

Liquidity Events

⚑ Occidental Petroleum (NYSE: OXY) is in talks to buy CrownRock, an energy producer focused on the Permian Basin in West Texas, from Lime Rock Partners for more than $10b, per the WSJ. https://axios.link/3sOYicr

πŸš‘ Onex hired Bank of America to explore a sale of British health-care staffing firm Acacium Group, which could fetch around $1.5b, per Bloomberg. https://axios.link/3uvt5v5

β€’ Paste Magazine acquired feminist-focused media brand Jezebel and political news site Splinter from G/O Media, a portfolio company of Great Hill Partners. https://axios.link/47YUDaR

β€’ Permira is seeking to sell a minority stake in Luxembourg-based fund administrator Alter Domus at an enterprise value north of €4b, per Reuters. https://axios.link/3SYhiQg

More M&A

πŸ€ The Adelson family confirmed that it has a binding agreement to buy a majority stake in the Dallas Mavericks from Mark Cuban, who says he doesn't plan to run for president in 2024.

πŸš‘ AbbVie (NYSE: ABBV) agreed to buy ImmunoGen (Nasdaq: IMGN), a Waltham, Mass.-based developer of antibody-drug conjugates, for $10.1b in cash, or $31.26 per share (95% premium to yesterday's closing price). https://axios.link/4a17laU

⚑ Gabon Oil Co., a state-owned business, plans to use its right of first refusal to acquire Assala Energy from Carlyle, which previously agreed to sell the oil business for $1.3b to France's Maurel & Prom (Paris: MAU), per Reuters. https://axios.link/3sMe73C

πŸš‘ Pharmavite, a West Hills, Calif.-based nutraceuticals maker, acquired Bonafide Health, a Harrison, N.Y.-based women's health company focused on menopause. www.pharmavite.com

β€’ Seven & i (Tokyo: 3382) agreed to buy Convenience Group Holdings, the operator of 7-Eleven convenience stores in Australia, for A$1.7b from R.G. Withers Nominees. https://axios.link/3uzDohH

πŸš€ SpaceX acquired Pioneer Aerospace, a maker of space capsule parachutes whose parent company went bankrupt, for $2.2m. https://axios.link/49Xd5Cp

🏈 Byron Trott, co-CEO of BDT & MSD Partners, is in talks to buy a minority stake in the Miami Dolphins, per Bloomberg. This report comes on the heels of one that Ken Griffin is in similar discussions with Dolphins owner Stephen Ross. https://axios.link/3uG7SyQ

Fundraising

🌎 Antin Infrastructure Partners raised €1.2b for a sustainable infrastructure fund. https://axios.link/49XdlRT

β€’ Blackstone raised $2.6b for its eighth real estate secondaries fund. www.blackstone.com

β€’ Inverness Graham, a Wayne, Pa.-based PE firm, is raising its fifth fund, per an SEC filing.

β€’ Lindsay Goldberg, a New York-based PE firm, is raising its sixth fund, per an SEC filing.

It's Personnel

β€’ Vivek Bommi joined Macquarie Asset Management as head of leveraged credit. He previously was with Alliance Bernstein. www.macquarie.com

β€’ Bill Burkoth joined Forest Road as managing partner of life sciences. He previously was co-founder and a senior partner at Pfizer Ventures. www.forestroadco.com

β€’ Matthieu Ducharme joined AXA Investment Managers as head of private equity secondaries in its AXA Prime business. He previously was with Northleaf Capital. www.axa-im.com

β€’ Caterina Ket joined ICG as a Frankfurt-based associate director of fund marketing. She previously was with Mercer. www.icgam.com

β€’ Jenny Nelson (ex-Evercore) and Joe Tremblay (IFM Investors) joined H.I.G. Capital as managing directors in the firm's capital formation team, while Jennie Park (Briarcliffe Credit Partners) joined as a principal. www.higcapital.com

β€’ Gabi Peic joined ATL Partners as head of marketing and IR. She previously was with LCA Capital. https://axios.link/3QXHYOx

Final Numbers

Data: U.S. Department of Commerce; Chart: Axios Visuals
Data: U.S. Department of Commerce; Chart: Axios Visuals

The U.S. economy was even hotter in Q3 than previously reported, as the Commerce Dept yesterday revised the annualized growth figure to 5.2% from 4.9%. Go deeper.

Thanks for reading Axios Pro Rata, and to copy editors Mickey Meece and Bryan McBournie! Please ask your friends, colleagues, and health insurers to sign up.