Sep 4, 2020

Axios Pro Rata

By Dan Primack
Dan Primack

🎧 Axios Re:Cap talks about the prospect of election night nightmares. My guest is Maggie Toulouse Oliver, New Mexico's secretary of state and current president of the National Secretaries of State Association.

🏖️ Publishing note: Axios Pro Rata will be off Monday for Labor Day. But if anything notable happens (TikTok deal?), I'll be sure to update the Axios app's Pro Rata channel. Back atcha on Tuesday.

Top of the Morning

Illustration: Aïda Amer/Axios

The U.S. Department of Justice yesterday updated its merger remedies guidelines for the first time in nearly a decade.

  • Why it matters: This is the new framework for how DOJ plans to solve for antitrust concerns, including for mega-mergers that reshape industries.

The big winner is private equity, which for the first time received explicit and positive mention as a viable "divestiture buyer" of assets that merging companies may be required to sell.

  • DOJ writes that "in some cases a private equity purchaser may be preferred," due to its financial resources, strategic flexibility, and access to industry expertise.
  • That noise you hear is Elizabeth Warren banging on Makan Delrahim's door.

Divestiture is a major theme in the new manual.

  • DOJ writes that "structural remedies are strongly preferred" to conduct remedies.
  • In other words, it would rather the merging companies divest their way out of antitrust concerns than promise to be on their best behavior (i.e., conduct remedy).

Looking ahead: DOJ last week said it's considering a review of its bank merger rules.

  • In quasi-related news, The NY Times reports that DOJ plans to file antitrust charges against Google by month's end, with AG Barr overruling "career lawyers who said they needed more time to build a strong case."

The bottom line: The new guidelines are in keeping with what we've seen in practice from Trump's DOJ, but now it's been codified.

The BFD
Source: Giphy

Louis Dreyfus, the Swiss agricultural trading giant, is in talks to sell a minority equity stake to Abu Dhabi sovereign wealth fund ADQ, per Bloomberg.

  • Why it's the BFD: In its 168 years, Louis Dreyfus has never before had a non-family shareholder.
  • Bottom line: "For ADQ, acquiring a minority stake in one of the four-largest traders of grains, oilseeds, and sugar could boost food security for the United Arab Emirates, amid concerns brought on by disruptions caused by the coronavirus pandemic." — Bloomberg

Venture Capital Deals

🚑 Pharmapacks, an e-commerce seller of health and beauty products, raised $40 million in bridge financing from Reckitt Benckiser, The Craftory, Straus Group, Emerson Group, and Sawaya Capital. http://axios.link/0OcG

ThruWave, a Seattle-based developer of 3D millimeter wave for logistics and supply chains, raised $6.4 million in seed funding. E14 Fund and Ubiquity Ventures co-led, and were joined by Root Ventures, Blue Sky Capital, WRF Capital, Tsingyuan Ventures, and In-Q-Tel. http://axios.link/ufb8

Myst AI, a San Francisco-based startup focused on time series forecasting in electricity, raised $6 million in Series A funding. Valo Ventures led, and was joined by seed backer Gradient Ventures. http://axios.link/Imzw

🚑 PhotoniCare, a Chicago-based provider of an imaging tool for the middle ear, raised $5.2 million in Series A funding. I2E Management Co. led, and was joined by OSF Ventures, Sony Innovation Fund, and Dreampact Ventures. www.photoni.care

Anvilogic, a Palo Alto-based collaborative SOC content platform, raised $4.4 million in seed funding led by Foundation Capital, per CrunchBase News. http://axios.link/xtkq

Avo, an analytics governance platform, raised $3 million in seed funding. GGV Capital led, and was joined by Heavybit and YC. http://axios.link/qnuh

Private Equity Deals

Episerver, a Nashua, New Hampshire-based portfolio company of Insight Partners, agreed to buy Optimizely, a San Francisco-based A/B testing company that had raised over $250 million in VC funding from firms like Andreessen Horowitz, Benchmark, Goldman Sachs, Index Ventures, Bain Capital Ventures, Battery Ventures, Salesforce Ventures, Sherpalo Ventures, Correlation Ventures, and Pharus Capital Management. http://axios.link/v4LF

Oval Partners acquired The Tech Group, a South Burlington, Vermont-based managed service provider focused on network security. www.tgvt.net

Ursa Piceance Holdings, a Colorado natural gas E&P owned by Denham Capital Management, filed for Chapter 11 bankruptcy protection. http://axios.link/Absa

Warburg Pincus has picked second-round bidders for its 35% stake in Avaloq, a Swiss banking software company, per Bloomberg. They are: ION, NEC Corp., Apax Partners, Motive Partners, and Nordic Capital. A deal could value Avaloq at around $2.2 billion. http://axios.link/Wciw

Public Offerings

Illustration: Sarah Grillo/Axios

Mission Produce, an Oxnard, California-based avocado producer, filed for a $100 million IPO. It plans to list on the Nasdaq (AVO) with BAML as lead underwriter, and reports a $13 million net loss on $419 million in revenue for the six months ending April 30, 2020. http://axios.link/b8Iu

KnowBe4, a Clearwater, Florida-based cybersecurity awareness training company backed by KKR, is prepping an IPO that could value the company at over $2 billion, per Reuters. http://axios.link/Roip

SPAC Stuff

Aspirational Consumer Lifestyle Corp., a lifestyle business-focused SPAC formed by L Catterton and LVMH executives, filed for a $225 million IPO. http://axios.link/0IYb

Falcon Capital Acquisition, a media-focused SPAC led by Alan Mnuchin (yes, Steve's older brother), filed for a $300 million IPO. http://axios.link/TM1Y

🚑 HighCape Capital Acquisition, a life sciences-focused SPAC formed by HighCape Capital, raised $100 million in its IPO. http://axios.link/Rl1G

• Tailwind Acquisition, a tech-focused SPAC formed by Casper CEO Philip Krim, raised $300 million in its IPO. http://axios.link/agGs

TPG filed IPO docs for two SPACs: One focused on the tech industry that seeks to raise $450 million, and one focused on ESG targets that seeks to raise $350 million.

Liquidity Events

Permira may revive plans to sell of list British bootmaker Dr. Martens, per Bloomberg. http://axios.link/EtXh

Welsh, Carson, Anderson & Stowe hired Goldman Sachs and Credit Suisse to find a buyer for Clearwater Analysis, a Boise, Idaho-based automated data aggregation and reporting solution for investment portfolios, per PE Hub. http://axios.link/nmMS

More M&A

Bridgestone (Tokyo: 5108) is considering a sale process for Firestone Building Products, which could fetch around $2.5 billion, per Bloomberg. http://axios.link/OErE

Kimberly-Clark (NYSE: KMB) agreed to buy diaper maker Softex Indonesia for $1.2 billion from CVC Capital Partners. http://axios.link/4GQL

SoftBank is considering a takeover effort for TikTok's India unit, which is not part of the package being bid on by Microsoft and Oracle, per Bloomberg. http://axios.link/DObH

Yandex (Nasdaq: YNDX) is spinning its self-driving car unit out of a joint venture with Uber (NYSE: UBER), and will invest $150 million into the business. http://axios.link/5opK

Fundraising

Cota Capital, a San Francisco-based enterprise tech investment firm, is raising $100 million for its second fund, per an SEC filing.

Luminate Capital, a mid-market PE firm focused on software and software-enabled businesses, is raising $700 million for its third fund, per PEI. http://axios.link/aP5L

It's Personnel

Kim Lew is stepping down as chief investment officer of Carnegie Corp. of New York, in order to become CEO of Columbia University’s $11 billion endowment. http://axios.link/ELf4

Jerry Johnson joined EnPro Industries (NYSE: NPO) as SVP of strategy, corporate development, and investor relations. He previously was a partner with RLJ Equity Partners. www.enproindustries.com

Hunter Peterson stepped down as a partner with The Riverside Company, in order to launch a new Dallas-based firm called Skylark Private Equity Partners, per his LinkedIn page.

Edouard Pillot left KKR, where he led European industrials deal-making, per the FT. http://axios.link/R725

Deanna Winter retired as a private equity portfolio manager with CalSTRS. http://axios.link/lJVk

🚑 Silicon Valley Bank announced that Jennifer Friel Goldstein has been promoted to managing partner in charge of a new life sciences investment team that will include a direct investment fund. SVB also said that Sunita Patel will lead biz dev for tech and healthcare. http://axios.link/Ac5v

Final Numbers
Data: FactSet; Chart: Axios Visuals
Dan Primack

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