Jan 22, 2021

Axios Pro Rata

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Breaking: Stuart Haselden is stepping down as CEO of VC-backed luggage-maker Away, with co-founder Jen Rubio to take over on an interim basis. He'll remain on the board. Go deeper.

Top of the Morning

Illustration: Brendan Lynch/Axios

In normal times, private equity would be nervous about Democratic Party control of both the White House and Congress. But in pandemic-consumed 2021, the industry seems sanguine.

Driving the news: Industry executives and lobbyists paid very close attention to Janet Yellen's confirmation hearings this week, and came away convinced that tax reform isn't on the near-term agenda.

The history: Joe Biden campaigned on a tax policy plan that was significantly worse for private equity than was Trump's.

  • He pledged to raise income tax rates on top earners, eliminate the preferential tax treatment of capital gains and increase corporate taxes (including a new minimum tax on book income).

The reality: Yellen, as expected, endorsed Biden's tax plan in her testimony. But she also said the administration's top legislative priority would be economic stimulus, with infrastructure not too far behind. Both of those would be major boons to private equity, as would be greater predictability on trade policy.

The bet: Private equity is keeping its fingers crossed that tax reform gets pushed off for at least a year, at which point election politics might interfere. And then, in the industry's best-case scenario, Republicans then regain control of at least one house of Congress.

The counterargument is that election season might embolden Democrats to raise taxes on the wealthiest Americans, particularly after its stimulus spending spree.

  • There also are some concerns about Gary Gensler as SEC chair. Like Jay Clayton, he knows where some private equity bodies are buried. Unlike Jay Clayton, he might be eager to dig them up.

The bottom line: Private equity is a long-term asset class. But for now it's banking on the short-term.

The BFD

Illustration: Lazaro Gamio/Axios

RLX Technology, a Chinese e-cigarette maker, raised $1.4 billion in its IPO after pricing above its anticipated range. The company's initial market value is around $18.6 billion, and it will trade on the NYSE (RLX).

  • Why it's the BFD: It's a reminder that vaping continues to flourish, despite receding from the headlines as COVID-19 became a more immediate public health crisis. The IPO also comes as investors wait to see if President Biden will continue on the Trump administration's efforts to stem U.S. listings of Chinese companies.
  • Details: RLX priced at $12 per share, versus its $8–$10 plans, and reports $16 million of net income on $324 million in revenue for the first nine months of 2020. Backers include Sequoia Capital China, with a 4.9% pre-IPO stake.
  • Bottom line: "The vaping industry has boomed in China even as the country banned online sales of e-cigarettes just over a year ago .... China is the world's largest potential vaping market, with an estimated 286.7 million adult smokers in 2019, RLX said in its prospectus. But vaping products only have a 1.2% penetration rate, compared with 32.4% in the U.S." — Crystal Tse & Julia Fioretti, Bloomberg
Venture Capital Deals

Imperfect Foods, a San Francisco-based online food marketplace aimed at reducing food waste, raised $95 million in Series D funding co-led by Insight Partners and Norwest Venture Partners at a $700 million post-money valuation. http://axios.link/MjfZ

🐟 BlueNalu, a San Diego-based producer of seafood products directly from fish cells, raised $60 million. Rage Capital led, and was joined by Agronomics, Lewis & Clark AgriFood, McWin, Siddhi Capital, Radicle Growth, Rich Products and Thai Union. http://axios.link/2qzw

VSPN, a Chinese e-sports competition organizer and broadcaster, raised $60 million in Series B+ funding from Prospect Avenue Capital, Guotai Junan International and Nan Fung Group. http://axios.link/NbHd

• GlassesUSA.com, an online eyewear retailer and subsidiary of Optimax Eyewear, raised $45 million from Tene Investment Fund. http://axios.link/FjKb

Omnipresent, a London-based provider of remote team onboarding software, raised $15.8 million in Series A funding. Return backers include Episode 1, Playfair Capital and Truesight Ventures. http://axios.link/DVgC

Swapp, an Israeli provider of construction-planning software, raised $7 million in seed funding co-led by Point72 Ventures and Entrée Capital. http://axios.link/RXzC

Avesha, a Burlington, Mass.-based provider of software that helps apps disaggregate from cloud to the edge, raised $6 million in seed funding led by Taiwania Capital. http://axios.link/8HUR

Private Equity Deals

Ardian invested in Elée, a French managed services provider of software asset management and cloud computing solutions. www.elee.fr

CVC Capital Partners is in advanced talks to buy the shampoo and skincare business of Japanese cosmetics maker Shiseido (T: 4911) for between $1.45 billion and $1.9 billion, per Bloomberg. http://axios.link/V30y

🐴 Growth Catalyst Partners acquired The Equine Network, an Albuquerque, N.M.-based provider of sports content and services to the U.S. equine industry.

H.I.G. Capital acquired Continental Batteries, a Dallas-based cart battery maker, from Incline Equity Partners. www.continentalbattery.com

HitecVision entered exclusive talks to buy ExxonMobil's (NYSE: XOM) upstream assets in the central and northern North Sea, which could fetch around $1 billion. http://axios.link/jtkW

Partners Group acquired a control stake in Idera, a Houston-based provider of database lifecycle management software, at around a $3 billion valuation from TA Associates and HGGC (both of which retain minority equity stakes), per PE Hub. http://axios.link/pzPG

Warburg Pincus and CoStar Group (Nasdaq: CSGP) are the final bidders for Irvine, Calif.-based property data and analytics firm CoreLogic (NYSE: CLGX), per Bloomberg. The company's current market value is nearly $6 billion. http://axios.link/IwpY

Public Offerings

Patria, a Brazilian alternative investment firm, raised $512 million in its IPO. It priced at $17 per share (above $14-$16 range), for an initial market value of $2.3 billion, and will list on the Nasdaq (PAX). http://axios.link/EOrR

Trustly, a Swedish online payments firm owned by Nordic Capital, is prepping a Stockholm IPO that could value the company at €9 billion, per Reuters. http://axios.link/ElbP

SPAC Stuff

Illustration: Aïda Amer/Axios

EVgo, a Los Angeles-based operator of electric vehicle charging stations owned by LS Power Group, agreed to go public via a reverse merger with a SPAC led by the former CEOs of Green Mountain Power and NRG Energy (NYSE: CLII). The deal values EVgo at around $2.6 billion, including a $400 million PIPE. http://axios.link/S0DO

Joby Aviation, the electric air taxi company that recently bought Uber Elevate, is considering going public via SPAC at a valuation of around $5 billion, per Reuters.

  • Axios also has learned that German electric air taxi company Lilium has held talks to go public via an aerospace-focused SPAC called Zanite Acquisition.

Crown PropTech Acquisitions, real estate tech SPAC, filed for a $200 million IPO. http://axios.link/98ym

European Sustainable Growth Acquisition, a SPAC targeting a European sustainability company, raised $125 million in its IPO. http://axios.link/EUUS

GigCapital4, a SPAC led by Avi Katz (ex-CEO of semiconductor company GigPeak), filed for a $260 million IPO. http://axios.link/oPMw

Goal Acquisitions, a sports and media SPAC led by Harvey Schiller, filed for a $225 million IPO. http://axios.link/2R1f

🚑 Isleworth Healthcare Acquisition, a health innovation SPAC led by Allen Weiss (Apollo Capital Management), filed for a $150 million IPO. http://axios.link/mhxc

Jack Creek Investment, a grocery SPAC formed by KSH Capital, raised $300 million in an upsized IPO. http://axios.link/IyVV

Leo Holdings III, a consumer business SPAC formed by Lion Capital, filed for a $200 million IPO. http://axios.link/hahe

Liberty Media Acquisition, a TMT and entertainment-focused SPAC formed by Liberty Media Corp., raised $500 million in its IPO. http://axios.link/T5Dy

North Atlantic Acquisition, a SPAC led by ex-Diageo exec Andrew Morgan and former Credit Suisse investment banker Gary Quin, raised $330 million in an upsized IPO. http://axios.link/CaBF

One Equity Partners Open Water I, a SPAC formed by One Equity Partners, raised $300 million in its IPO. http://axios.link/J2Br

Primavera Capital Acquisition, a SPAC formed by Primavera Capital to buy a consumer business with a presence in China, raised $360 million in an upsized IPO. http://axios.link/aL6q

🚑 Priveterra Acquisition, a med-tech SPAC led by former Wright Medical CEO Robert Palmisano, filed for a $200 million IPO. http://axios.link/ZOmM

🚑 SCP & Co Healthcare Acquisition, a healthcare SPAC formed by Skyway Group Private Equity, raised $200 million in its IPO. http://axios.link/xZ91

Virtuoso Acquisition, a media-focused SPAC led by Connoisseur Media's co-founders, raised $200 million in its IPO. http://axios.link/syX3

VPC Impact Acquisition II, a fintech SPAC formed by Victory Park Capital, filed for a $225 million IPO. http://axios.link/oE3I

Liquidity Events

🚑 Boston Scientific (NYSE: BSX) agreed to buy Preventice, a Houston-based maker of remote cardiac monitoring solutions. The deal values Preventice at $1.2 billion in cash and stock, inclusive of Boston Scientific's existing 22% stake. Preventice had raised around $230 million from firms like Vivo Capital, Merck & Co., Novo Holdings, Samsung Catalyst Fund and Revelation Partners. http://axios.link/7yq5

The Carlyle Group hired Evercore to find a buyer for NetMotion Software, a Seattle-based provider of network security software, per PE Hub. http://axios.link/i0r4

Triton hired Jefferies to find a buyer for Polygon, a Swedish damage restoration services firm that could fetch up to €1 billion, per Reuters. http://axios.link/0Vtr

More M&A

GlobalWafers, a Taiwanese chipmaker, sweetened its takeover bid for Germany's Siltronic by 12% to €4.2 billion. http://axios.link/C1Yp

Fundraising

Coatue is raising up to $500 million for a new fund that will invest in both private and public fintech companies, Axios' Kia Kokalitcheva reports.

It's Personnel

Canaan Partners promoted Laura Chau (consumer tech investing) and Rayfe Gaspar-Asaoka (deep tech) to partners. www.canaan.com

Larry D'Angelo is joining law-tech upstart Notarize, where he was on the board, as president and chief commercial officer. He previously was an operating partner with Cove Hill Partners, which he'll continue to advise. www.notarize.com

Pantheon promoted four to partners: Petra Bukovec (London), Jérôme Duthu-Bengtzon (London), Dinesh Ramasamy (San Francisco) and Kara Zanger (New York). www.pantheon.com

Partners Capital promoted five execs to managing directors: Emma Bewley, Sam Diedrich, Jay Majeethia, Sudharshan Murugesu and Olivier Piccoli. www.partners-cap.com

Final Numbers
Data: BofA Global Research; Chart: Axios Visuals

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