May 28, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

🎧 Pro Rata Podcast digs into Trump vs. Twitter. My guest is Kara Swisher. Listen via Apple, Spotify, or Axios.

Top of the Morning

Illustration: Eniola Odetunde/Axios

If you can't beat them, join them. And then beat them.

Driving the news: Silver Lake acquired a 12% stake in Far Point Acquisition (NYSE: FPAC), in order to help force the blank-check acquisition company to complete its $2.6 billion takeover of Swiss payments firm Global Blue.

Backstory: Far Point was formed in 2018 by former New York Stock Exchange president Tom Farley and activist investor Dan Loeb (via his Third Point hedge fund), and raised $550 million in its IPO.

  • Far Point's goal was to buy a fintech, and in January 2020 agreed to acquire Global Blue from Silver Lake (which would retain a minority stake). Global Blue focuses on tax refunds related to tourism shopping.
  • Like with all blank-check acquisition companies, or SPACs, Far Point requires shareholder approval for its takeovers.
  • On May 7, Far Point's board unanimously recommended that shareholders vote against the Global Blue deal, based on economic changes driven by the coronavirus pandemic.
  • Silver Lake seethed.

To be clear, Silver Lake wasn't like a pro baseball player insisting that Far Point agree to the exact same terms in changing circumstances. It did make concessions, but not enough to appease Far Point. So it took advantage of Far Point being a publicly traded company — unlike a traditional private equity fund — and bought the 12% stake.

  • Third Point previously committed its shares to the deal, which means 37% of Far Point shareholders are now officially in favor.
  • That's still short of the required 50.1% needed to okay the deal, but that threshold is of outstanding shares rather than voted shares (meaning the gap may be smaller than it appears).
  • Silver Lake could up its odds by buying more stock in the open market. That may be a bit counterproductive in terms of exiting its investment, but still would bring Global Blue public and better capitalize the company via a deal structure that includes outside investments from such firms as Alibaba's Ant Financial.

Of note: Farley declined to comment when I messaged him earlier this morning, and a Silver Lake spokesperson hadn't returned my email as of this writing.

The bottom line: Silver Lake is playing both sides of the deal. It's the sort of thing that would seem unethical, or even illegal, in other contexts. But it seems fair when it comes to these dealings with Far Point and Global Blue. Tough, but fair.

The BFD

Illustration: Eniola Odetunde/Axios

General Electric (NYSE: GE) agreed to sell its lighting business to Savant Systems, a Hyannis, Mass.-based smart home management company backed by KKR.

  • Why it's the BFD: This cuts GE's last product ties to Thomas Edison.
  • $$$: No terms were disclosed, but the WSJ puts the price tag at around $250 million (including assumed liabilities). That's only half of what GE hoped to get when it first decided to divest in 2017.
  • The bottom line: GE is no longer in the consumer products business, although Savant plans to maintain the GE bulb branding via a long-term licensing agreement. As for what's next, GE could become the global leader in giant robot worms.

Pro Rata for Kids

Today's project if for your kid(s) to get over their disappointment of yesterday's scrubbed SpaceX launch, by creating their own space ship. This could be a drawing or Legos or empty paper towel rolls. Or maybe a clever couch conversion.

  • Per usual, please email me pics of what they create (and I promise to begin posting them again tomorrow).
Venture Capital Deals

Marqeta, an Oakland-based card issuing platform, raised $150 million in new funding at a $4.3 billion valuation. Coatue Management led, and was joined by Vitruvian Partners. Existing backers include Visa, Goldman Sachs, 83North, Granite Ventures, and Iconiq Capital. http://axios.link/C4cR

Pie Insurance, a Washington, D.C.-based workers’ comp insurer, raised $100 million in new equity funding. Gallatin Point Capital was joined by return backers Greycroft, SVB Capital, Aspect Ventures, Elefund, and Sirius International Insurance Group. www.pieinsurance.com

SmartRent, a Scottsdale, Ariz.-based provider of smart home automation solutions, raised $60 million in Series C funding. Spark Capital led, and was joined by Fifth Wall, Energy Impact Partners, the Amazon Alexa Fund, Bain Capital Ventures, and RET Ventures. http://axios.link/difl

Ascus Biosciences, a San Diego-based animal health and nutrition startup, raised $46 million in Series B funding. Temasek led, and was joined by Anterra Capital, Formation8, and Wilbur-Ellis. http://axios.link/xgJ3

🚑 Q32 Bio, a Cambridge, Mass.-based biotech focused on immune regulation, raised $46 million in Series A funding. Atlas Venture led, and was joined by OrbiMed, Abingworth, Sanofi Ventures, University of Colorado, and Children’s Hospital Colorado Center for Innovation. http://axios.link/dCt6

Wasabi, a Boston-based cloud storage startup, raised $30 million led by Forestay Capital. www.wasabi.com

🚑 Medwing, a Berlin-based healthcare staffing platform, raised €28 million in Series B funding. Cathay Innovation led, and was joined by Adevinta Ventures, Northzone, Atlantic Labs, and Cherry Ventures. http://axios.link/mgn3

Gatsby, a Berkeley, Calif.-based website developer platform, raised $28 million in Series B funding. Index Ventures led, and was joined by CRV and Trinity venture. http://axios.link/gzPp

Otrium, a Dutch startup that helps clothing brands sell end-of-season items, raised €24 million in Series B funding. Eight Roads Ventures led, and was joined by return backers Index Ventures and Hans Veldhuizen. http://axios.link/vEW9

Decibel, a digital experience analytics startup with offices in Boston and London, raised $23 million in new Series B funding led by Perwyn. www.decibel.com

Fundbox, a San Francisco-based B2B payments and credit network, raised $20 million in new Series C funding from backers like MUFG Innovation Partners. http://axios.link/4awo

Fernish, a Los Angeles-based online platform for renting high-end furniture, raised $15 million in new Series A funding led by Khosla Ventures. http://axios.link/s0uh

Podimo, a Denmark-based podcasting platform, raised €15 million. 83North led, and was joined by seed backers e.ventures and Heartcore. http://axios.link/VTnT

🚑 Siren, a developer of “smart socks” for reducing diabetic ulcers, raised $11.8 million in Series B funding. Anathem Ventures led, and was joined by DCM, Khosla Ventures, 500 Startups, and Founders Fund. http://axios.link/f9zv

Almanac, a platform for open-source documents, raised $9 million in seed funding led by Floodgate. www.almanac.io

Meniga, a London-based digital banking platform, raised €8.5 million. Groupe BPCE led, and was joined by Grupo Crédito Agrícola and UniCredit. http://axios.link/e9U1

Tugboat Logic, a Burlingame, Calif.-based virtual security officer platform, raised $8 million. Inovia Capital led, and was joined by Westwave Capital. http://axios.link/fmj0

Stringr, a New York-based provider of video footage for news organizations, raised $5.8 million from Thomson Reuters and return backers G5 Capital and Advection Growth Capital. http://axios.link/MQ2O

RudderStack, a customer data management startup, raised $5 million in seed funding led by S28 Capital. http://axios.link/wbiw

Toro, a data quality monitoring startup raised $4 million in seed funding co-led by Costanoa Ventures and Point72 Ventures. http://axios.link/q6nV

🚑 Stork Club, a San Francisco-based maternity care platform, raised $2.7 million in seed funding from Bowery Capital, Slow Ventures, and individual angels. www.joinstokclub.com

Carry1st, an Africa-focused gaming startup, raised $2.5 million in seed funding led by CRE Venture Capital. http://axios.link/KPJs

Greyparrot, a London-based recycling efficiency startup, raised £1.8 million in seed funding. Speedinvest led, and was joined by Force Over Mass. http://axios.link/80vf

Private Equity Deals

Connexity, a Los Angeles-based portfolio company of Symphony Technology Group, acquired Skimlinks, a London-based affiliate links platform for publishers. Skimlinks had raised around $30 million from firms like Greycroft, LocalGlobe, Frog Capital, Sussex Place Ventures, and Bertelsmann. http://axios.link/wZna

🚑 Crescent Capital is in talks to buy Australia’s PRP Diagnostic Imaging, per The Australian. www.prpimaging.com.au

Mubadala Investment Co. is in advanced talks to invest around $1 billion into Indian telecom giant Jio Platforms, per Reuters. http://axios.link/BXsp

Public Offerings

🚑 Progenity, a San Diego-based molecular testing company, filed for a $100 million IPO. It plans to trade on the Nasdaq (PROG) with Piper Sandler as lead underwriter, and reports a $148 million net loss on $144 million in revenue for 2019. Shareholders include Athyrium Capital Management (48% pre-IPO stake). http://axios.link/8ZdM

ZoomInfo, a Vancouver, Wash.-based data platform for sales, marketing, and recruiting, set IPO terms to 44.5 million shares at $16-$18. It would have a fully-diluted market value of $6.7 billion, were it to price in the middle, and plans to trade on the Nasdaq (ZI) with JPMorgan as lead underwriter. Backers include The Carlyle Group and TA Associates. http://axios.link/IUPK

Liquidity Events

Colony Capital hired Moelis & Co. to explore options for its hotel holdings, per Bloomberg. http://axios.link/GuJR

Dvele, a Loma Linda, Calif.-based digital platform for offsite home production, acquired Blu Homes, a Vallejo, Calif.-based maker of luxury prefab homes. Devele last year raised $14 million in a round led by Crescent Real Estate, while Blu had raised over $200 million from firms like Vision Ridge Partners and BrightPath Capital Partners. www.dvele.com

🚑 Omada Health, a San Francisco-based digital health care platform, acquired Physera, a San Francisco-based provider of virtual physical therapy, for around $30 million. Omada has raised over $250 million in VC funding, while Physera raised around $14 million from firms like BlueCross BlueShield Venture Partners. http://axios.link/YvKd

More M&A

Apple (Nasdaq: AAPL) acquired Inductiv, a Canadian AI startup focused on automating the identification and correction of data errors. http://axios.link/9spV

Boohoo (AIM: BOO) acquired the 34% stake it didn’t already hold in U.K.-based online fashion retailer Prettylittlething for upwards of £324 million (including £270m upfront). http://axios.link/IpFw

DHL acquired a minority equity stake in Link Commerce, a provider of white-label digital storefronts for retailers selling into emerging markets. http://axios.link/jjWs

Fundraising

The Carlyle Group does not plan to raise a second sub-Saharan Africa fund, with the four dealmakers on that team spinning out to launch a new firm called Alterra Capital. http://axios.link/7elI

Stellex Capital, a private equity firm focused on “underperforming or mismanaged lower and middle-market businesses,” is raising $1.25 billion for its second fund. http://axios.link/3BNQ

It's Personnel

Colin Day, founder and ex-CEO of iCIMS, joined Susquehanna Growth Equity as a senior adviser. www.sgep.com

Nicholas Hyde left IFM Investors to join KKR as lead of its client partner group in Australia and New Zealand. www.kkr.com

Karthic Jayaraman joined TPG Capital as a London-based partner and co-lead of health care investing. He previously spent nearly 20 years with the Carlyle Group. www.tpg.com

🦉 Owl Rock Capital hired Jesse Huff (ex-Oaktree Capital Management) as co-head of opportunistic investing, alongside Nicole Drapkin (who is being promoted to the role). www.owlrock.com

Reach Capital promoted Chian Gong to partner. www.reachcapital.com

Final Numbers
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Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes “probable deaths” that New York City began reporting on April 14.
Dan Primack

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