Aug 28, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

🎧 Axios Re:Cap digs into how sports arenas are being converted into polling places for Nov. 3, and how NBA and WNBA players are driving the process. My guest is Renee Montgomery, point guard for the Atlanta Dream and co-founder of More Than A Vote.

Top of the Morning

Illustration: Aïda Amer/Axios

If Fox ever decides to reboot "24," it should focus on TikTok instead of Jack Bauer. Just since I sent yesterday's newsletter...

1. Walmart confirmed that it is working with Microsoft, which continues to feel like the clubhouse leader.

  • The basic idea would be to help turn TikTok U.S. into more of an e-commerce app for creators and users, much like what TikTok parent company ByteDance does with a similar app in China.
  • It's a reminder that while TikTok has a massive U.S. audience, it doesn't have too much of a U.S. business.
  • Working with Walmart, which spoke with other potential partners as well, could cause Microsoft new heartburn with Peter Navarro, who seems to always have the last whisper in President Trump's ear on China-related matters.
  • Walmart not only has a retail presence in China, but also deep supply chain relationships. All of which might be why sources have cautioned me against terming this pairing as a "joint bid."

2. We learned that CEO Kevin Mayer's resignation was, at least in part, about being excluded from deal talks by ByteDance CEO Zhang Yiming.

  • Interim head Vanessa Pappas went on CNBC this morning to confirm that she too is being left out of the room where it happens.
  • Investors often talk about how they're betting on people, not product. In this case, Microsoft and rival bidder Oracle are clearly betting on product — because they have no other choice.

3. The Wrap reported that Oracle's bid includes $10 billion in cash, $10 billion in stock, and an earn-out of 50% of unit profits for two years. Axios has been unable to confirm those numbers.

  • This is the deal that would include a partial rollover from existing ByteDance shareholders, including those with Chinese businesses, which could also perk up Navarro's ears. Not only because these firms invest and have personnel on the ground in China, but also because of some limited partner relationships.

4. Multiple outlets reported that a deal announcement is imminent, well short of Trump's deadline of Sept. 15.

  • If a press release does come, don't be surprised if it's about ByteDance picking its preferred bidder, rather than having a full purchase and sale agreement signed.

Quick take: Just imagine what might happen by Monday morning.

The BFD

Illustration: Sarah Grillo/Axios

The Blackstone Group is leading a $300 million minority investment in Tricon Residential (TSX: TCN), owner of more than 30,000 single-family rental homes.

  • Why it's the BFD: This is Blackstone's return to the single-family rental market, which it dominated until cashing out of Invitation Homes late last year. It also reflects how single-family rent collections have outperformed apartment rent collections during the pandemic.
  • The bottom line: "Single-family rentals have been around for decades, but Wall Street viewed scattered-site portfolios as difficult to manage. That changed following the U.S. foreclosure crisis, when firms like Blackstone began assembling massive holdings and developing new property-management systems." — Patrick Clark, Bloomberg
Venture Capital Deals

🚑 Triumvira Immunologics, an Austin, Texas-based cancer therapies developer, raised $55 million in Series A funding. Bayer and Northpond Ventures co-led, and were joined by Oceanpine Capital, Viva Biotech Holdings, Bloom Burton & Co. and the Centre for Commercialization of Cancer. http://axios.link/SfKm

Restream, an Austin, Texas-based startup focused on streaming to multiple platform, raised $50 million in Series A funding co-led by Sapphire Ventures and Insight Partners. http://axios.link/0CKl

ProteanTecs, an Israeli provider of performance monitoring software for electronics, raised $45 million. Koch Disruptive Technologies led, and was joined by Valor Equity Partners and Atreides Management. http://axios.link/4rCq

Shopmonkey, a San Jose, Calif.-based SaaS startup focused on auto repair shops, raised $25 million in Series B funding. Bessemer Venture Partners led, and was joined by Index Ventures, e.ventures, and I2BF. http://axios.link/3ePU

Fondeadora, a Mexico City-based challenger bank, raised $14 million in Series A funding led by Gradient Ventures. http://axios.link/mjtn

Harbor, a disaster prep software startup, raised $5 million in seed funding from 25madison. http://axios.link/Es4E

PrizePool, a San Francisco-based digital banking startup that incorporates cash prizes, raised $4.3 million in seed funding from Accomplice, Bling Capital, Coatue, SciFi VC, and World Innovation Lab. http://axios.link/BDCi

🚑 Verta Health, a Toronto-based, raised C$2 million in seed funding. MaRS Investment Accelerator Fund led, and was joined by Verstra Ventures and Amplify Capital. http://axios.link/qF80

QMetry, a Santa Clara, Calif.-based QA products startup, secured an undisclosed amount of Series A funding from Goldman Sachs Merchant Banking and Everstone Group. www.qmetry.com

Private Equity Deals

Accel-KKR agreed to acquire a majority stake in Navtor, a provider of navigational software for the maritime industry. www.navtor.com

🚑 Archimed agreed to buy NAMSA, a Northwood, Ohio-based contract research organization for medical device companies, for a reported $450 million. http://axios.link/yZXP

Levine Leichtman Capital Partners agreed to buy BigHand, a London-based provider of workflow software for law firms, from Bridgepoint Development Capital and LDC. www.bighand.com

MidOcean Partners acquired Music Reports, a Woodland Hills, Calif.-based provider of music rights data and management services, from Abry Partners and the company’s co-founders. http://axios.link/oXKe

Nutanix (Nasdaq: NTNX), a San Jose, Calif.-based enterprise cloud computing company, secured $750 million of convertible senior notes from Bain Capital. It also announced CEO Dheeraj Pandey plans to retire, and that a search will be launched for his successor. www.nutanix.com

PAG agreed to buy a 51% stake in the wealth management unit of India’s Edelweiss Financial Services for $300 million. http://axios.link/kQrb

Public Offerings

Leslie's Poolmart, a pool supplies retailer owned by L Catterton, is prepping an IPO that could value the company north of $3 billion, per Reuters. http://axios.link/afwI

Xpeng, a Chinese electric luxury carmaker, raised $1.5 billion in its IPO. The company priced 99.7 million shares at $15 (above $11-$13 range), and closed its first trading day at $21.22 per share. It listed on the NYSE (XPEV) and had raised over $2.5 billion in private funding from firms like Alibaba, IDG, Morningside Ventures, and GGV Capital. http://axios.link/WYkP

SPAC stuff

CF Finance Acquisition II, a new SPAC formed by Cantor Fitzgerald, raised $500 million in its IPO. http://axios.link/pyUd

Liquidity Events

Fastly (NYSE: FSLY) agreed to buy Signal Sciences, a Venice, Calif.-based web app security solution provider, for $775 million ($200m cash, rest in stock). Signal Sciences had raised around $66 million from firms like CRV, Index Ventures, OATV, Harrison Metal, Cisco, and Lead Edge Capital. http://axios.link/RMwD

Goldman Sachs Private Capital hired Shea & Co. to find a buyer for Information Builders, a New York-based provider of business intelligence and data analytics software, per PE Hub. http://axios.link/Js0B

More M&A

Coty (NYSE: COTY), majority owned by JAB Holdings, is seeking to sell or close most of its factories, with plans to outsource manufacturing. http://axios.link/67yk

🏕️ HipCamp, a San Francisco-based online marketplace for public and privately-held campsites, acquired Australian landsharing startup Youcamp (including its 50,000 listings). HipCamp has raised over $40 million from firms like Andreessen Horowitz, Benchmark, August Capital, and OATV. http://axios.link/bgYr

• Nestlé agreed to sell its China water unit to listed Chinese brewer Tsingtao Brewery Group. http://axios.link/PglR

• SoftBank Group disclosed plans to sell around $12.5 billion of stock it holds in its Japanese wireless operation, representing around one-third of its stake. http://axios.link/u5Cu

Fundraising

• Draper Associates closed on over $82 million for its $170 million-targeted sixth fund, per an SEC filing. http://axios.link/JQys

🚑 OrbiMed is raising $1.4 billion for its eighth life sciences-focused VC fund, per an SEC filing. www.orbimed.com

It's Personnel

Lindsay Goldberg named former U.S. Treasury Secretary Jack Lew, plus Michael Dees and Russ Triedman, as managing partners. Firm co-founder Alan Goldberg will continue to serve as CEO. www.lindsaygoldbergllc.com

Final Numbers
Data: S&P Dow Jones Indices; Chart: Naema Ahmed/Axios

Axios' Courtenay Brown reports that stock buybacks are about to stage a comeback:

"A slew of companies put stock buyback plans on ice at the onset of the pandemic. Now some of them are beginning put share repurchases back on the table. ... The ramping up of stock buybacks is a sign that swaths of corporate America feel confident enough to return to some sense of normalcy, even as millions of Americans are still dealing with the harsh fallout from the coronavirus-hit economy."
Dan Primack

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