March 20, 2024

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Top of the Morning

Illustration: Brendan Lynch/Axios

The Minnesota Timberwolves are one of the NBA's hottest and youngest teams, with years of on-court success ahead.

  • Its new owners, however, have just days left to salvage their purchase.

Driving the news: Carlyle Group no longer is helping to finance the team takeover by Alex Rodriguez and former Walmart exec Marc Lore, after running into opposition from the NBA.

  • The firm had agreed in principle to make a $300 million structured equity investment at a $2.3 billion valuation, but it was subject to league approval.
  • Carlyle and the NBA negotiated for months, with a key sticking point said to include potential conflicts in the firm's private equity portfolio, with Carlyle ultimately walking away around two weeks ago.

History: Rodriguez and Lore first agreed to buy the T-Wolves and the WNBA's Minnesota Lynx from Glen Taylor in 2021, via a tranched-out purchase at a $1.5 billion valuation.

  • The pair last December exercised an option to add another 40%, giving them majority control, with the funds due at the end of this month.
  • Carlyle's investment represented around half of what they owed.

Look ahead: A spokesperson for Rodriguez and Lore says they still plan to close the deal on schedule, but clearly they've lost leverage.

  • Other prospective investors know the time crunch, which could let them push back on price. Remember, Carlyle was buying in at a 53% premium to Rodriguez and Lore's original deal.
  • They even could wait out the month and then try to strike their own agreement with Taylor, who must be privately praying that Rodriguez and Lore falter.

The big picture: The NBA has been very welcoming of private equity, with PE firms buying small stakes in such franchises as the Golden State Warriors, Sacramento Kings, and San Antonio Spurs.

  • But the league does have its limits, particularly when it comes to control investments in other businesses that could pose a conflict.
  • For example, a private equity firm might have trouble if it also owns a consumer goods company that has big-money sponsorship deals with NBA players. Or has exposure to a player agency or marketing firm.
  • In fact, word is that the NBA forced Cleveland Cavaliers owner Dan Gilbert to sell FatHead, a licensed seller of custom wall art that features NBA players.

Zoom out: An NBA spokesman says the league "did not deny Carlyle's proposed investment in the Minnesota Timberwolves and Lynx," although that's likely because the deal never progressed to a formal vote. Had Carlyle's original proposal been acceptable, then it would have happened.

  • Carlyle declined comment.

The bottom line: The shot clock is ticking for Rodriguez and Lore.

The BFD

Illustration: Shoshana Gordon/Axios

Microsoft has hired the co-founders and many other employees of Inflection AI, a Silicon Valley startup that last summer raised $1.3 billion at a $4 billion valuation.

  • This includes CEO Mustafa Suleyman, who previously co-founded DeepMind and will lead Microsoft's consumer AI division.

Why it's the BFD: Microsoft is cornering the AI market via strategic acquisition, almost daring the FTC to act.

Cap table: Investors on last summer's round include Reid Hoffman (who's staying on Inflection's board), Nvidia, Bill Gates, Eric Schmidt, and Microsoft.

Details: Inflection, which last year introduced a chatbot called Pi, insists that it's not been acqui-hired into oblivion, transitioning into a "studio strategy" with a new CEO.

  • Moreover, a source says that Inflection investors will be made whole, and then some, via a non-exclusive licensing agreement signed with Microsoft. Plus retain equity in Inflection AI.
  • But it's a very far cry from what Suleyman said last fall at the Axios BFD event in New York, when he claimed the goal was to "to build a multi $100 billion business. ... Hopefully one day we'll IPO."

Venture Capital Deals

🚑 Clasp Therapeutics, an immuno-oncology startup with offices in Maryland and Massachusetts, raised $150m in Series A funding co-led by Catalio Capital Management, Third Rock Ventures, and Novo Holdings. https://axios.link/3TIApgZ

Pocket FM, an Indian audio entertainment startup, raised $103m in Series D funding. Lightspeed led, and was joined by Stepstone Group. https://axios.link/3VnNdL6

Solaris, a German banking-as-a-service startup, raised €96m in Series F funding led by SBI Group. https://axios.link/3TRLZXz

🚑 PocketHealth, a Toronto-based medical records sharing startup, raised US$33m in Series B funding. Round13 Capital led, and was joined by Radical Ventures, Questa Capital, Deloitte Ventures, and Samsung Next. https://axios.link/3PRHj1t

Coterie, a Cincinnati-based small-business insurer, raised $27m from Hiscox, Intact Ventures, Weatherford Capital, and RPM Ventures. www.coterieinsurance.com

Ultrahuman, an Indian smart ring maker, raised $25m in Series B equity and debt funding from Blume Ventures, Steadview Capital, Nexus Venture Partners, and Alpha Wave. https://axios.link/3Vlwxny

NX Technologies, a German automotive payment management platform, raised €22m in Series B funding. PayPal Ventures led, and was joined by Motive Ventures. www.bezahl.de

CyberSaint, a Boston-based cyber risk management company, raised $21m in Series A funding. Riverside Acceleration Capital led, and was joined by Sage Hill Investors, Audeo Capital, and BlueIO. www.cybersaint.io

Poseidon, a Canadian developer of salmon-farming tech, raised US$21m in Series B funding. Ecosystem Integrity Fund led, and was joined by InBC Investment Corp and Export Development Canada. www.poseidonos.com

Morph, an Ethereum Layer 2 startup, raised $19m in seed funding. DragonFly Capital led, and was joined by Pantera Capital, Foresight Ventures, The Spartan Group, MEXC Ventures, Symbolic Capital, Public Works, MH Ventures, and Everyrealm. https://axios.link/3J5dEy1

AccessPay, a British payment infrastructure startup, raised $16m in Series C funding, per Axios Pro. True Ventures led, and was joined by Praetura Ventures, NatWest, Mastercard, Route 66 Ventures, and Beringea. https://axios.link/3vj9cbp

🚑 Care51, a cancer survival data analytics startup, raised €15m in seed funding. Sofinnova Partners led, and was joined by Hitachi Ventures, Life Extension Ventures, Xavier Niel, and Olivier Pomel. https://axios.link/43pZUaa

Marco, a Miami-based cross-border trade finance firm for Latin American SMEs, raised $12m in Series A funding. IDC Ventures led, and was joined by IDB Lab, Barn Invest, SquareOne Capital and Arcadia Funds. www.marcofi.com

🚑 The Carevoice, a Shanghai-based embedded health insurance startup, raised $10m in Series B funding led by Apis. https://axios.link/4ckqgOV

G2 Reverse Logistics, a Pittsburgh-based reverse logistics platform, raised $9.6m in seed funding from Dell Technologies Capital. www.g2rl.com

Winible, an Austin, Texas-based sports betting monetization startup, raised $6m in seed funding led by Inspired Capital. www.winible.com

🔥 Dryad Networks, a German startup focused on early wildfire detection, raised €5.6m from backers like Stihl and Telus. https://axios.link/3vbgaiS

Buzz Solutions, a Palo Alto, Calif.-based startup that inspects critical energy infrastructure, raised $5m. GoPoint Ventures led, and was joined by Blackhorn Ventures and MaC Venture Capital. www.buzzsolutions.co

🚑 Sugar.fit, an Indian diabetes care startup, raised $5m in Series A extension funding led by B Capital. axios.link/3PmFx8a

Enapi, a German EV charging software startup, raised €2.5M in pre-seed funding. Project A Ventures led, and was joined by Seedcamp and HelloWorld. https://axios.link/3wYVmvx

Blitz, an Indonesian EV logistics startup, raised $1.6m in seed funding led by ADB Ventures. https://axios.link/3VjKfHz

Private Equity Deals

Actis is in talks to buy Swiftnet, the mobile tower unit of South Africa's Telkom, per Bloomberg. https://axios.link/3TKjlaL

🚑 Ampersand Capital Partners acquired Biologos, a Glendale Heights, Ill.-based maker of cell cultures. www.biologos.com

Bain Capital agreed to buy Finova, a British provider of mortgage origination software, from Norland Capital. It will be merged with the MSO software business Bain is purchasing from Iress (ASX: IRE). https://axios.link/3Trupb8

Exponent agreed to invest in Ethos Engineering, an Irish provider of sustainable data center design services. www.ethoseng.ie

Groome, a Fairfield, N.J.-based portfolio company of Argosy Private Equity, acquired Council Bluffs, Iowa-based industrial services provider W-S Corp. www.groomeindustrial.com

Macy's (NYSE: M) said it will open its books to Arkhouse Management and Brigade Capital Management. https://axios.link/3INwB89

🚑 Montagu Private Equity agreed to buy Johnson Matthey's (LSE: JMAT) medical device unit for $700m. https://axios.link/3IJgTuz

Sycamore Partners is weighing a buyout offer for Gildan Activewear (NYSE: GIL), a Canadian clothing maker with around a $6b market cap, per Bloomberg. https://axios.link/3x2ibOZ

🚑 Trive Capital invested in Formula Wellness, a Dallas-based provider of wellness and aesthetics services. axios.link/3TF71Zc

Public Offerings

Astera Labs, a Santa Clara, Calif.-based chipmaker, raised $713m in its IPO. It priced 19.8m shares at $36, above its upwardly revised range, and will list on the Nasdaq (ALAB). The company had raised over $230m in VC funding from firms like Sutter Hill Ventures (13.7% pre-IPO stake), Fidelity (7%), Intel Capital, and Atreides Management.

Fogo de Chão, a Brazilian steakhouse chain, withdrew IPO registration. This comes several months after Bain Capital agreed to buy Fogo from Rhone Capital.

🚀 SpaceX is "not focused on an IPO for Starlink right now," president and COO Gwynne Shotwell said yesterday at the Satellite conference. https://axios.link/3vlWuJ1

SPAC Stuff

Thimble Point Acquisition II, a SPAC formed by the Pritzker Vlock Family Office, withdrew registration for a $200m IPO. Its predecessor SPAC merged with Pear Therapeutics. https://axios.link/496YHG2

Liquidity Events

🚑 Linden Capital Partners, a Chicago-based PE firm focused on health care, is seeking to sell a minority ownership stake in itself, per Bloomberg. https://axios.link/4clw6jb

More M&A

Airbus (Paris: AIR) ended talks to buy the big data and cybersecurity unit of French IT company Atos (Paris: ATO). https://axios.link/3vjr06k

🚑 Heritage Provider Network, an urgent care provider focused on Southern California, has revived plans for a sale that could fetch over $7b, per Bloomberg. https://axios.link/3IMxBJu

🚑 Kroger (NYSE: KR) agreed to sell its specialty pharma unit to a subsidiary of Elevance Health (NYSE: ELV). https://axios.link/3IMAsSI

🚑 Lonza (Swiss: LON) will pay $1.2b in cash for a California biologics manufacturing facility from Roche (Swiss: ROG). https://axios.link/3x2PhxZ

Unilever (NYSE: UL) is weighing the sale of its majority stake in Qinyuan Group, a Chinse maker of water purification equipment that could be valued at $300m, per Bloomberg. https://axios.link/3vlE1fO

Fundraising

Admiralty Capital Group is launching as an Australian VC firm led by former JPMorgan banker Ryan Holsheimer, per Bloomberg. https://axios.link/3TGUPqU

Bedrock raised $400m for its fourth VC fund, and added Rachel Haot as chief of staff. She previously was chief digital officer for both New York state and New York City. www.bedrockcap.com

🌎 Philip Krim, co-founder and former CEO of mattress maker Casper, has launched a climate tech accelerator called Montauk Climate with $8.5m in funding led by Sheel Tye of Amplo VC. https://axios.link/43t7tgA

It's Personnel

Illustration: Gabriella Turrisi/Axios

Diogo Mónica, co-founder of "unicorn" crypto custodian Anchorage Digital, is joining Haun Ventures as its second general partner and will become executive chairman of Anchorage. Go deeper.

Michael Callahan joined Silver Creek Capital Management as a managing director of business development. He previously was with Investcorp. www.silvercreekcapital.com

Michael Hufton is leaving Morgan Stanley to join Deutsche Bank as co-head of Asia-Pacific infrastructure and utilities. https://axios.link/3Tnri4e

Steve Kasoff, formerly an equity partner with Elliott Management, is joining Palliser Capital as chair of Palliser US. www.pallisercap.com

Waleed Noor joined Monroe Capital as head of Middle East distribution. He previously was with Commerzbank. www.monroecap.com

Markus Wirtz is leaving Bank of America to join Truist Financial as a managing director focused on asset management dealmaking, per Bloomberg. https://axios.link/43xuhvC

JPMorgan launched a sports investment banking group co-led by Eric Menell and Gian Piero Sammartano, per Bloomberg. https://axios.link/49XC0oR

Final Numbers

Data: U.S. Bureau of Labor Statistics; Chart: Axios Visuals

We all scream for ice cream, and the deal market is no exception.

  • Unilever yesterday announced plans to spin off its ice cream unit, which includes brands like Ben & Jerry's, Wall's, and Magnum.
  • The business generated $8.6 billion in 2023 sales, with Axios' Richard Collings reporting that the separation plan could include a full or partial sale.
  • Meanwhile, PAI Partners reportedly is considering options for Froneri, its ice cream joint venture with Nestlé that could be valued at more than $10b. Froneri brands include Häagen-Dazs.

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