Oct 29, 2020

Axios Pro Rata

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Top of the Morning

Illustration: Eniola Odetunde/Axios

Regular readers know that you can contact me via encrypted messaging apps like Signal and Telegram.

  • Someone ought to tell SoftBank CEO Masayoshi Son that he could do the same when communicating with his lieutenants.

Driving the news: Former WeWork CEO Adam Neumann won a Delaware court motion to remove redactions on select text messages between Son and Marcelo Claure, the SoftBank COO and WeWork executive chairman, as part of his lawsuit against SoftBank for bailing on its $3 billion tender offer for WeWork shares.

  • The vast majority of tender proceeds would have gone to Neumann and WeWork investor Benchmark, which also is suing SoftBank.

The most explosive message was related to SoftBank's desire to delay the $3 billion payable in the tender by one month, which SoftBank had blamed on regulatory approval delays.

  • Son texted Claure: "It’s great to postpone the close of tender... Use whatever excuse to make senses [sic]."
  • Claure replied: "Ok. Will use antitrust. I am turning good at excuses like someone I know very well :)"

Another series of communication relates to WeWork's planned consolidation of its joint venture in China.

  • SoftBank had claimed that WeWork's inability to close that transaction was one of the reasons it didn't complete the tender.
  • But, the documents suggest that SoftBank was okay scuttling that deal because it instead devised a way to "gobble up" part of the $3 billion tender, thus making it economically whole on China.

Neumann's lawyers also continue to request 17,000 pages of additional "withheld documents."

What SoftBank spox is saying: “Cherry-picking quotes from documents doesn’t change the facts: under the terms of our agreement, SoftBank had no obligation to complete the tender offer in which Mr. Neumann — the biggest beneficiary —  sought to sell nearly $1 billion in stock.”

What Neumann spox is saying: No comment.

The bottom line: SoftBank may win the legal argument that it was allowed to bail on the tender for any reason it wanted, and no one is crying for Neumann. But these new disclosures seem to reflect intentional deception, which could cost SoftBank future business.

The BFD

Illustration: Sarah Grillo/Axios

LVMH (Paris: MC) and Tiffany & Co. (NYSE: TIF) have reconciled, with LVMH now to buy the U.S. jeweler for around $15.8 billion. That's about $425 million lower than the original agreement, signed last November, with the per share price dropping from $135 to $131.50.

  • Why it's the BFD: This heads off what was shaping up to be a nasty court battle. LVMH backed out of the merger in September, citing new U.S. tariffs on French luxury goods, with the French government either putting pressure on LVMH or the other way around. Tiffany believed LVMH was using the tariffs as cover for its cold feet over pandemic-related sales slowdowns and U.S. racial justice protests.
  • The bottom line: "A source close to the matter told Reuters on Wednesday that Tiffany had recently approached LVMH with a more conciliatory tone. This source said the worsening pandemic in Europe and the U.S. also played a role in bringing the two sides back to the negotiating table as business conditions deteriorate, and that discussions over Tiffany’s management under LVMH had been left for a later date." — Sarah White & Silvia Aloisi, Reuters
Venture Capital Deals

Whoop, a Boston-based maker of fitness-tracking wearables, raised $100 million in Series E funding at a $1.2 billion valuation. IVP led, and was joined by SoftBank, Accomplice, Two Sigma Ventures, Collaborative Fund, Thursday Ventures, Nextview Ventures, Promus Ventures, Cavu Ventures, D20 Capital, and LionTree Partners. http://axios.link/qj7x

GetYourGuide, a Berlin-based exploration experiences company, secured €114 million in convertible note financing. Searchlight Capital led, and was joined by SoftBank, KKR, Battery Ventures, Highland Europe, Spark Capital, Lakestar, Heartcore Capital, and NGP Capital. http://axios.link/ZX7y

🚑 Q32 Bio, a Cambridge, Mass.-based developer pf biologic therapeutics to restore immune regulation, raised $60 million in Series B funding co-led by OrbiMed and Acorn Bioventures. www.Q32bio.com

Pulumi, a Seattle-based cloud engineering platform, raised $37.5 million in Series B funding. NEA led, and was joined by return backers Madrona Venture Group and Tola Capital. http://axios.link/D0iy

Jiko, a Berkeley, Calif.-based trading and money management platform, raised $33 million in Series A funding. Upfront Ventures and Wafra co-led, and were joined by Radicle Impact an NYCA Partners. The company also secured $7 million in debt. http://axios.link/2D0E

Arable, a San Francisco-based provider of data solutions for agriculture, raised $20 million in Series B funding. Prelude Ventures led, and was joined by M2O, AVG’s Nassau Street Ventures, Tridon, and return backers S2G Ventures, Middleland Capital, Ajax Strategies, and Chase Field. www.arable.com

🚑 Homethrive, a Northbrook, Ill.-based eldercare platform, raised $18 million in Series A funding co-led by 7wireVentures and Pitango HealthTech. www.homethrive.com

Fabric, a New York-based family finance planning startup, raised $18 million in Series B funding. CNO Financial Group led, and was joined by Guardian Life, Nippon Life, Samsung Ventures, Securian Ventures, and return backer Bessemer Venture Partners. http://axios.link/MDRK

Robust.ai, a Palo Alto-based collaborative robotics startup, raised $15 million in Series A funding. Jazz Venture Partners led, and was joined by Playground Global, Liquid2 Ventures, and Fontinalis Partners. http://axios.link/F84j

CodeSandbox, a Dutch online editor for web apps, raised $12.7 million in Series A funding. EQT Ventures led, and was joined by Kleiner Perkins and Arches Capital. http://axios.link/eZwj

Slingshot Aerospace, an Austin, Texas-based provider of aerospace observation data analytics, raised $8 million in Series A funding. ATX Venture Partners led, and was joined by Revolution Rise of the Rest, Techstars Ventures, and Okapi VC. http://axios.link/OPCE

Tilt Five, a Palo Alto-based developer of AR goggles for tabletop games, raised $7.5 million in Series A funding. SIP Global Partners led, and was joined by BitKraft Ventures, Galaxy Interactive, and Logitech. http://axios.link/QAON

RealBlocks, a New York-based tech platform for alternative investment access, raised $7 million in Series A funding led by Crosslink Capital. www.realblocks.co

Enso Security, an Israeli app security posture management startup, raised $6 million in seed funding. YL Ventures led, and was joined by Jump Capital. http://axios.link/CW2U

AppFollow, a Finnish app management startup, raised $5 million in Series A funding. Nauta Capital led, and was joined by Vendep Capital and RTP Global. http://axios.link/UzBm

MachEye, a San Jose, Calif.-based natural search analytics startup, raised $4.6 million in seed funding. Canaan Partners led, and was joined by WestWave Capital. http://axios.link/78rd

Keyrock, a Brussels-based digital asset market maker, raised €4.3 million from SIX Fintech Ventures, MiddleGame Ventures, and return backers Volta Ventures, Seeder Fund, and TNN Patrimony. www.keyrock.eu

ZeroEyes, a Philadelphia-based AI platform focused on weapons detection, raised $1.5 million. Grateful Investments led, and was joined by Legion Capital, Backswing Ventures, and Natoma Group. www.zeroeyes.com

Private Equity Deals

Brookwood Financial Partners invested $235 million in Yesway, a Fort Worth, Texas-based convenience store operator. http://axios.link/aR78

Celero Commerce, a Nashville, Tenn.-based portfolio company of LLR Partners, acquired TransNational Payments, a Chicago-based provider of electronic payments tech and business management SaaS. www.celerocommerce.com

CertaSite, an Indianapolis-based portfolio company of The Riverside Company, acquired Starfire Systems, a Milwaukee-based provider of fire protection solutions. http://axios.link/h8EJ

GTCR and Warburg Pincus have partnered on a takeover offer for property data and analytics firm CoreLogic (NYSE: CLGX), which has a $6 billion market cap, per Reuters. CoStar Group (Nasdaq: CSGP) also submitted a bid. http://axios.link/5ktp

Navex Global, a Portland, Ore.-based portfolio company of BC Partners, acquired the assets of CSRware, a Mill Valley, Calif.-based provider of ESG reporting software. www.navexglobal.com

TorQuest Partners is in talks to buy VersaCold, a Canadian cold storage company owned by Ivanhoe Cambridge and KingSett Capital, per Bloomberg. http://axios.link/RnA1

Public Offerings

Source: Giphy

Leslie's, a Phoenix-based pool supplies retailer owned by L Catterton, raised $680 million in its IPO. The company priced at $17 per share (above $14-$16 range), for an initial market cap of nearly $3.2 billion, and will list on the Nasdaq (LESL). Goldman Sachs was lead underwriter for Leslie’s, which reports $16.5 million of net income on $731 million in revenue for the nine months ending June 27, 2020. http://axios.link/2TmI

Allegro MicroSystems, a Manchester, N.H.-based IC developer owned by One Equity Partners, raised $350 million in its IPO. It priced at the high end of its $12-$14 range, for an initial market cap of $2.65 billion, and will list on the Nasdaq (ALGM). http://axios.link/6epg

Caliber Home Loans, a Coppell, Texas-based residential mortgage company backed by Lone Star Funds, postponed an IPO that was set to raise around $345 million at a $1.8 billion valuation. http://axios.link/26vd

🚑 Diaverum, a Swedish dialysis clinic operator owned by Bridgepoint, is prepping a Stockholm IPO for next month, per Reuters. http://axios.link/JoqF

🚑 Galecto, a Denmark-based biotech focused on cancer and fibrosis, raised $85 million in its IPO. It priced at $15 per share (range midpoint) for an initial market cap of $369 million, and plans to list on the Nasdaq (GLTO) with BofA as lead underwriter. The pre-revenue company raised $170 million in VC funding, including a $64 million infusion last month, from OrbiMed (17.7% pre-IPO stake), Novo Holdings (11.4%), Sunstone Capital (7.8%), Merck Ventures (6.5%), HBM Healthcare (6.2%), Cormorant (6.1%), Ysios Capital (5.8%), and Bay City Capital (5.5%). http://axios.link/uJwU

• Mavenir, a Siris Capital-backed provider of cloud-native software apps for mobile networks, postponed an IPO that was set to raise over $300 million at a $1.9 billion valuation. http://axios.link/fpIM

SPAC Stuff

Elite Model World, a global modeling agency, is in talks to go public via a reverse merger with Galileo Acquisition Corp. (NYSE: GLE), a SPAC led by Luca Giacometti, per Bloomberg.

Bluescape Opportunities Acquisition, an energy and industrials-focused SPAC formed by Bluescape Energy Partners, raised $575 million in a downsized IPO. http://axios.link/GSY3

Duddell Street Acquisition, a SPAC formed by Maso Capital, raised $175 million in its IPO. http://axios.link/h839

Liquidity Events

Mainsail Partners agreed to sell SentryOne, a Charlotte-based provider of database performance monitoring and data ops software, to SolarWinds (NYSE: SWI). www.sentryone.com

Marlin Equity Partners is seeking a buyer for Logi Analytics, a McLean, Va.-based provider of embedded business intelligence and analytics software, per PE Hub. http://axios.link/MkIF

🚑 Novartis (NYSE: NVS) agreed to buy Vedere Bio, a Cambridge, Mass.-based gene therapy startup for upwards of $280 million ($150m upfront). Vedere raised a $21 million Series A round last year from Atlas Venture, Mission BioCapital, and the Retinal Degeneration Fund. http://axios.link/9y3i

Nordic Capital seeking a buyer for Stockholm-based electronic trading platform Itiviti Group, which could fetch $1 billion, per Bloomberg. http://axios.link/TkCo

🚑 Sun Capital Partners seeking a buyer for ClearChoice, a Greenwood Village, Colo.-based operator of dental implant centers, per PE Hub. http://axios.link/iHcr

More M&A

Illustration: Eniola Odetunde/Axios

Ryan Smith, founder and CEO of Qualtrics, agreed to buy a majority stake in the Utah Jazz basketball franchise for $1.66 billion. http://axios.link/A3Gc

J.C. Penney plans to exit bankruptcy by the holidays, via an asset purchase agreement with its two largest landlords, Brookfield Asset Management and Simon Property Group. http://axios.link/1FNS

Marvell Technology Group (Nasdaq: MRVL) agreed to buy rival chipmaker Inphi (Nasdaq: IPHI) over over $8 billion in cash and stock. http://axios.link/ZWwj

Northrop Grumman (NYSE: NOC) is seeking a buyer for its tech services unit, which could fetch $3 billion, per Bloomberg. http://axios.link/T3nG

🚑 Opko Health (Nasdaq: OPK), a Miami-based diagnostics and pharma company worth around $2.7 billion, is being pushed to consider a take-private buyout by Sian Capital, one of its largest outside investors. http://axios.link/scr0

Worldline (Paris: WLN) picked UBS and BNP Paribas to advise on a sale of its payments terminals unit, which could fetch around €3 billion, per Bloomberg. http://axios.link/hmPj

Fundraising

Accel-KKR, a tech-focused growth buyout firm, raised $640 million for a new, evergreen fund. www.accel-kkr.com

EMH Partners of Germany raised €650 million for its second growth equity fund. www.emh.com

Morningside Venture Capital of China has rebranded to 5Y Capital. http://axios.link/4G0N

It's Personnel

Chris Gardner joined Boston-based Underscore VC as an investing partner. He previously was with PayPal. www.underscore.vc

Hyde Park Venture Partners promoted Jackie DiMonte to principal. www.hydeparkvp.com

Carol Meyers joined Glasswing Ventures as a venture partner. She previously was chief marketing officer at Rapid7. www.glasswing.vc

Precursor Ventures promoted Sydney Thomas to principal. www.precursorvc.com

Anabelle Skalleberg and Olga Levin joined private equity firm The Watermill Group as a principal and director of finance, respectively. Skalleberg previously was with Flight Centre Travel Group, while Levin was at Cambridge Associates. www.watermill.com

Final Numbers
Expand chart
Data: BEA; Chart: Danielle Alberti/Axios

The U.S. economy grew at a 33.1% annualized pace in the third quarter, the Commerce Department said this morning. That was largely in line with economist expectations.

  • Per Axios' Courtenay Brown: "The U.S. economy has clawed back some of its pandemic losses, but still has a long way before a full recovery."

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