Top of the Morning
Private equity wasn't mentioned by Elizabeth Warren during last night's debate, even though she got more speaking time than any of the other 11 candidates. For private equity, that was the good news.
The bad news for private equity was that at least 9 of the other 11 candidates tacitly acknowledged that Warren is now the Democratic Party's front-runner.
- Each of the past three presidential administrations has either brought in top PE executives, or included individuals who went on to become top PE executives.
- It's almost impossible to imagine that would be true of a Warren presidency, from the perspective of both supply and demand.
- Without a seat at the table, PE is prone to being on the table.
The real test now for private equity is to move past denial and into bargaining, beyond just supporting Trump or one of Warren's Democratic rivals. Will industry leaders publicly give ground on carried interest taxation? Worker protections? Some portfolio liabilities?
Warren has her plan. Private equity needs one too.
Guy Hands, founder and chairman of British private equity firm Terra Firma, is leading a management buyout bid for Consolidated Pastoral, a giant Australian cattle company owned by... Terra Firma.
- Why it's the BFD: Because this seems to be self-dealing out of desperation, not out of greed. Terra Firma has spent more than a year trying to sell Consolidated Pastoral for A$1 billion, but only found interest in select lands — ultimately agreeing to sell off around 40% for A$310 million. Hands now personally wants to buy the rest for over A$600 million, with the help of company management and undisclosed investors that are expected to include some Australian pension funds.
- Bottom line: "The new buyout proposal would see Mr Hands and CPC's management take over the remaining 3.5 million hectares of land and 300,000 head of cattle across northern Australia, as well as two feedlots in Indonesia." — Daniel Fitzgerald, ABC
Venture Capital Deals
• Provivi, a developer of pheromones-based crop protection products, raised $85 million in Series C funding. Pontifax and an undisclosed fund co-led, and were joined by Tybourne Capital Management and return backers Kairos Ventures, Spruce Capital, Lanx Capital, and BASF. http://axios.link/bkUb
🚑 Healx, a British drug discovery platform for rare diseases, raised $56 million in Series B funding. Atomico led, and was joined by Intel Capital, Global Brain, Btov Partners and return backers Balderton Capital, Amadeus Capital Partners, and Jonathan Milner. http://axios.link/fYoh
• CleverTap, a mobile marketing and customer analytics platform, raised $35 million in Series C funding co-led by Tiger Global and Sequoia India. http://axios.link/kkDC
• Flowhub, a Denver-based provider of cannabis retail management software, raised $23 million from e.ventures, Evolv Ventures, and Poseidon. http://axios.link/0fDg
• Building Engines, a Boston-based ops platform for commercial real estate, raised $12.7 million. Wavecrest Growth Partners led, and was joined by River Cities Capital Funds, MassMutual Ventures, and Camber Creek Ventures. http://axios.link/y0IS
• SharpCloud Software, a British provider of business collaboration software, raised £4.5 million from YFM Equity Partners and British Smaller Companies VCT. www.sharpcloud.com
• Strapi, a Paris-based headless content management system, raised $4 million co-led by Accel and Stride.vc. http://axios.link/jBqj
• Mable, a Boston-based wholesale commerce platform for small food and grocery businesses, raised $3.1 million in seed funding from Venrock, Accomplice, and Founder Collective. http://axios.link/LEJe
Private Equity Deals
• Apollo Global Management offered to buy Tech Data (Nasdaq: TECD), a Clearwater, Fla.-based IT equipment distributor, for around $5 billion, per Reuters. The $130 per share bid would represent a 16.76% premium on yesterday’s close. http://axios.link/BhWD
• The Blackstone Group, KKR, and TPG each are considering bids for the cement unit of Indian conglomerate Emami Group, per Bloomberg. http://axios.link/34y7
• The Carlyle Group completed its purchase of a majority stake in HireVue, a Salt Lake City-based provider of talent assessment and video interviewing software. HireVue had raised around $100 million in VC funding, with backers like TCV, Sequoia Partners, and Granite Ventures retaining minority equity stakes. www.hirevue.com
• Computer Aided Technology, a Buffalo Grove, Ill.-based portfolio company of CIVC Partners, acquired Fisher Unitech, a Pleasant Ridge, Mich.-based provider of 3D design software and 3D printers, from The Riverside Company. www.cati.com
• Marlin Equity Partners acquired a majority stake in Whitlock, a Richmond, Va.-based provider of audiovisual and video collaboration solutions. www.whitlock.com
🎲 MGM Resorts International (NYSE: MGM) agreed to a $4.25 billion sale-leaseback of the Bellagio Hotel and Casino in Las Vegas to The Blackstone Group. It also agreed to an $825 million sale-leaseback for Circus Circus with real estate mogul Phil Ruffin. Earlier reports were that the Blackstone deal also would include the MGM Grand property, but that was not ultimately included. http://axios.link/Br3b
• Platinum Equity agreed to buy TruckPro, a Cordova, Tenn.-based heavy-duty truck parts distributor, from Harvest Partners. No financial terms were disclosed, but earlier reports put the price at around $500 million.
🚑 Aesthetic Medical International, a Chinese provider of aesthetic medical treatments, set IPO terms to 2.5 million shares at $11-$13. It would have an initial market cap of $283 million, were it to price in the middle, and plans to trade on the Nasdaq (AIH) with Cantor Fitzgerald as lead underwriter. The company reports $12 million of net income on $57 million in revenue for the first half of 2019. http://axios.link/6srZ
🚑 Cabaletta Bio, a Philadelphia, Penn.-based developer of T-cell therapies for autoimmune diseases, set IPO terms to 5.8 million shares at $14-$16. It would have an initial market cap of $338 million, were it to price in the middle, and plans to list on the Nasdaq (CABA) with Morgan Stanley as lead underwriter. The pre-revenue company raised $88 million in VC funding from firms like 5AM Ventures (19% pre-IPO stake), Adage Capital (19%), Baker Brothers (19%), Boxer Capital (5.5%), and Deerfield Management (5.5%). http://axios.link/fPb1
• DNEG, a UK-based provider of special effects for the film and TV industries, is considering a London IPO that would raise £150 million. http://axios.link/CD7G
• OneWater Marine, a Buford, Ga.-based recreational boat retailer, set IPO terms to 3.2 million shares at $18-$20. It would have an initial market cap of $181 million, were it to price in the middle, and plans to trade on the Nasdaq (ONEW), with Goldman Sachs and Raymond James as lead underwriters. http://axios.link/hUNl
🚑 Phathom Pharma, a Buffalo Grove, Ill.-based developer of drugs for GI diseases, set IPO terms to 7.9 million shares at $18-$20. It would have a fully-diluted market value of $650 million, were it to price in the middle, and plans to trade on the Nasdaq (PHAT) with Goldman Sachs as lead underwriter. The pre-revenue company raised $90 million in VC funding from firms like Frazier Life Sciences (41% pre-IPO stake), Takeda (9.1%), Medicxi, Abingworth Management, Greenspring Associates, Sahsen Ventures, Richard King Mellon Foundation, Janus Henderson Group, BVF Partners, and RA Capital Management. http://axios.link/DdQq
• Progyny, a New York-based provider of employee fertility benefits programs, set IPO terms to 10 million shares at $14-$16. It would have a fully-diluted market value of $1.5 billion, were it to price in the middle, and plans to trade on the Nasdaq (PGNY) with JPMorgan as lead underwriter. It reports $4 million of net income on $103 million in revenue for the first half of 2019, and raised around $100 million in VC funding from firms like TPG Biotech (27.2% pre-IPO stake), Kleiner Perkins (25.6%), S.R. One (13.9%), and Merck Ventures (6.4%). http://axios.link/YXLy
🚑 TELA Bio, a Malvern, Penn.-based developer of surgical scaffolds for abdominal surgeries, filed for a $69 million IPO. It plans to trade on the Nasdaq (TELA) with Jefferies and Piper Jaffray as lead underwriters, and reports an $11 million net loss on $6.6 million in revenue for the first half of 2019. The company has raised in VC funding, from OrbiMed (34.6% pre-IPO stake), Quaker Partners (21.2%), Pacira Pharma (13.6%), and Signet Healthcare Partners (8.2%). http://axios.link/ROvJ
• Youdao, a Chinese online education platform, set IPO terms to 5.6 million shares at $15-$18. It would have a fully-diluted market value of $2 billion, were it to price in the middle, and plans to list on the NYSE (DAO) with Citi and Morgan Stanley as lead underwriters. The company reports a $24 million net loss on $80 million in revenue for the first half of 2019. Shareholders include NetEase (66% pre-IPO stake). http://axios.link/gRLU
• Abry Partners is seeking to sell Hilb Group, a Richmond, Va.-based insurance brokerage, for more than $1 billion (excluding debt), per Reuters. http://axios.link/vKpu
• AXA (Paris: AXAF) is considering a sale of its Central Europe business, per Reuters. http://axios.link/Hbzg
• Berkshire Hathaway asked the Federal Reserve for permission to potentially increase its stake in Bank of America (NYSE: BAC) beyond 10%. http://axios.link/Xw42
• Eaton Corp. (NYSE: ETN) agreed to sell Georgia-based lighting fixture maker Cooper Lighting Solutions to listed Dutch lighting company Signify for $1.4 billion in cash. http://axios.link/AIIb
• HSBC (LSE: HSBA) hired Lazard to find a buyer for its French business, which could fetch €1 billion, per Reuters. http://axios.link/blDl
• Intel (Nasdaq: INTC) agreed to buy edge-computing software group Smart Edge from Pivot Technology Solutions (TSX: PTG) for US$27 million. http://axios.link/zuhM
• Craft Ventures, the VC firm led by David Sacks, raised $500 million for its second fund. http://axios.link/ygWc
• KPS Capital Partners raised $6 billion for its fifth flagship buyout fund, and $1 billion for its debut middle-market buyout fund. www.kpsfund.com
• Permira raised €11 billion for its seventh flagship buyout fund. http://axios.link/rrKf
• KKR announced that Pete Stavros and Nate Taylor were promoted to co-lead Americas private equity, while Mattia Caprioli and Philipp Freise were promoted to lead European private equity. In Asia, private equity will be co-led by Hiro Hirano and Ashish Shastry. http://axios.link/vMFq
• Josh Stephens, former chief strategy officer at IDERA and Itential, joined Austin-based VC firm Elsewhere Partners as CTO. www.elsewhere.partners