Axios Pro Rata: Deal destruction — Airbnb ups IPO terms — WebEx win

Top of the Morning | Monday, December 07, 2020

Open in app View in browser   Presented By Cooley   Pro Rata By Dan Primack ·Dec 07, 2020 🎧 Axios Re:Cap spoke with former FDA chief Rob Califf about the vaccine approval process and who he thinks should make the final call. Listen via Apple, Spotify or Axios. 🖥️ You're invited: Axios tomorrow at 12:30pm ET hosts a virtual event on the future of health care payments, including conversations with Mohamad Makhzoumi, head of health investing at NEA, and Cedar Inc. co-founder and CEO Florian Otto. Register here.     Top of the Morning Illustration: Sarah Grillo/Axios   Several merger agreements collapsed earlier this year, with acquirers arguing that COVID-19 had rendered the original deal terms moot. Target companies claimed it was little more than buyer's remorse. There were suits and countersuits. Driving the news: One of the larger disputes, between Mirae Asset Global Investments and Anbang Insurance Group, was decided last week by a Delaware judge in favor of the buyer. And his rationale could have wide-ranging implications. The case: South Korea-based Mirae in 2019 agreed to pay $5.8 billion to purchase 15 U.S. luxury hotels from China's Anbang, with plans to close the transaction in early 2020. Anbang sued Mirae in April for failing to complete the deal. Mirae at the time said it still wanted to close, despite difficulties in obtaining financing, but that Anbang hadn't met closing conditions. One month later, Mirae countersued. The ruling: Judge Travis Laster did not find that the pandemic triggered a material adverse clause in the merger agreement, instead saying that COVID-19 was covered by the MAE's exemption for calamities or natural disasters. But that's where the good news for Anbang ended. Laster wrote that many of Anbang's actions prompted by the pandemic, such as partial hotel closures and employee layoffs, violated Delaware rules that a target company maintain "ordinary course of business." More specifically, Laster said it didn't matter if Anbang's changes were in line with those of hospitality industry peers. All that mattered was that they weren't consistent with Anbang's own "ordinary course of business." Mirae not only got to walk away from the deal without penalty, but also gets back a $582 million deposit (plus interest). The bottom line: Laster's ruling might have obliterated the value of MAE clause language, and provided a bonanza to buyside lawyers. It also could create perverse incentives to target companies in the midst of macro crisis, suggesting that it's more expedient to hemorrhage money than to alter operations.     The BFD Illustration: Aïda Amer/Axios   Cisco (Nasdaq: CSCO) acquired Slido, a Slovakian interaction platform for online conference speakers and audiences. Why it's the BFD: This reflects how Cisco isn't ready to certify Zoom's victory in the live business video battle. Cisco says it will integrate Slido into WebEx, letting users respond to polls, ask questions and provide feedback. ROI: Slido appears to only have raised outside funding via a small seed round in 2013 from California-based BridgeStart Ventures. The bottom line: Slido "had a notable profile in the business world, with customers ranging from a plethora of event customers that used it to manage Q&A sessions from the audience … to government organizations and many others. In all, it had amassed 7 million users and was profitable." — Ingrid Lunden, TechCrunch     Venture Capital Deals • Luko, a French home insurance startup, raised €50 million in Series B funding. EQT Ventures led, and was joined by Accel, Founders Fund and Speedinvest. http://axios.link/Erx7 • Wonder, a German video communications startup, raised $11 million in seed funding. EQT Ventures led, and was joined by return backer BlueYard Ventures. http://axios.link/2QhW • Zephr, a London-based startup that helps publishers increase subscriptions, raised $8 million led by Bertelsmann Digital Media Investments. http://axios.link/6vJ1 • The Skills, an online education platform where courses are taught by pro athletes, raised $5 million in seed funding. Will Ventures led, and was joined by Global Founders Capital, 8VC, Maveron, Hack VC, and Correlation VC. http://axios.link/jmf8     A message from Cooley Private financing environment resilient through Q3     In Q3, average transaction sizes increased across all deal stages, especially in late-stage deals. Median pre-money valuations also increased, hitting new highs in every deal stage other than Series C rounds. See more at our venture financing dashboard on Cooley GO.     Private Equity Deals • Actis is in talks to buy the toll roads portfolio of India's Ashoka Concessions for around $350 million, per Mint. http://axios.link/nqYC • American Industrial Partners agreed to buy Ft. Lauderdale, Fla.-based marine services firm Seacor Holdings (NYSE: CKH) for $1 billion (including debt), or $41.50 per share (14% premium to Friday's closing price). http://axios.link/32Z3 • BC Partners is seeking to transfer Springer Nature, a German academic publisher it bought in 2013, to a new special purpose fund set up by BC Partners, per the FT. The deal could value SN at around €6 billion, and provide liquidity to limited partners in a 2011-vintage BC Partners fund. http://axios.link/t5RO • The Blackstone Group completed its previously announced buyout of genealogy site Ancestry.com from Silver Lake, GIC, Spectrum Equity and Permira. The deal valued Ancestry at $4.7 billion, with GIC retaining a minority equity stake. http://axios.link/ifSN • CVC Capital Partners agreed to buy Hong Kong fashion retailer I.T Ltd. (HK: 0999) for around $168 million. http://axios.link/NhnM • Lone Star Funds sweetened its takeover offer for British retirement home builder McCarthy & Stone (LSE: MCS) to £647 million, prompting the company's board to recommend approval to shareholders. http://axios.link/h6KO • PAI Partners agreed to buy German facilities manager Apleona from EQT Partners for €1.6 billion. http://axios.link/7oFi • Permira is investing €150 million in Catawiki, a Dutch online marketplace for classic cars and art. http://axios.link/ayZ2 • Race Rock Group agreed to buy Structural & Steel Products, a Ft. Worth, Texas-based maker of telecom and utility infrastructure products, from Highland Capital Management. www.s-steel.com 🐄 TPG and Northstar Group agreed to buy an 80% stake in the Indonesian dairy unit of Singapore's Japfa for $236 million. http://axios.link/ZYjW     Public Offerings Source: Giphy • Petco, a San Diego-based pet supplies retailer owned by CVC Capital Partners and CPPIB, filed for an IPO that Renaissance Capital estimates could raise $800 million. It plans to list on the Nasdaq (WOOF) with Goldman Sachs as lead underwriter, and reports a $94 million net loss on nearly $3.3 billion in revenue for the 39 weeks ending Nov. 2, 2020. http://axios.link/UaO8 • 17 Education & Technology Group, a provider of K-12 education services in China, raised $288 million in its IPO. It priced 27.4 million shares at $10.50 (within range), and listed on the Nasdaq (YQ) with Goldman Sachs (Asia) and Morgan Stanley as lead underwriters. Backers include Shunwei Capital (20.2% pre-IPO stake), H Capital (12.3%), CL Lion Investment (11.6%) and Esta Investments (11.2%). http://axios.link/3r19 🚑 AbCellera, Eli Lilly's partner on a monoclonal antibody treatment for COVID-19, set IPO terms to 23 million shares at $14-$17. It would have an initial market cap of $4.9 billion, were it to price in the middle, and raised over $100 million in VC funding from firms like DCVC (12.4% pre-IPO stake), Viking Global (8%) and Founders Fund. http://axios.link/jD8a • Airbnb upped its IPO range from $44-$50 per share to $56-$60 per share. Its fully diluted value would now be around $42 billion at the high end. http://axios.link/BJ1N 🚑 4D Molecular Therapeutics, an Emeryville, Calif.-based developer of gene therapies, set IPO terms to 4.8 million shares at $20-$22. It would have a fully diluted value of $491 million, were it to price in the middle, and plans to list on the Nasdaq (FDMT) with Goldman Sachs as lead underwriter and raised over $180 million from firms like Viking Global, Pfizer and BVF Partners. http://axios.link/eJsh • C3.ai, a Redwood City, Calif.-based enterprise AI SaaS company led by Tom Siebel, upped its IPO price range from $31-$34 to $36-$38. It still plans to offer 15.5 million shares, and previously raised over $360 million from backers like TPG (22.6% pre-IPO stake), Baker Hughes (15.1%), BlackRock, Sutter Hill Ventures, Breyer Capital, Interwest Partners, Makena Capital Management and Wildcat Venture Partners. http://axios.link/PQLA • Wish, a San Francisco-based mobile shopping app, set IPO terms to 46 million shares at $22-$24. It would have a fully diluted market value of $16.4 billion, were it to price in the middle, and plans to list on the Nasdaq (WISH) with Goldman Sachs as lead underwriter. The company reports a $176 million net loss on $1.7 billion in revenue for the first nine months of 2020, and raised $1.8 billion from such firms as DST Global, Founders Fund, Formation8, General Atlantic and GGV Capital. http://axios.link/1dBO     SPAC Stuff • Paysafe, a London-based payments processor owned by The Blackstone Group and CVC Capital Partners, agreed to be acquired via a $9 billion reverse merger with a SPAC led by Bill Foley. http://axios.link/wyG2 • 7GC & Co. Holdings, a tech-focused SPAC formed by 7GC and Hennessy Capital, filed for a $175 million IPO. http://axios.link/oBwv 🚑 Viveon Health Acquisition, a SPAC targeting the U.S. orthopedic and spine market, filed for a $170 million IPO. http://axios.link/7pNV     Liquidity Events • Alliance Data Systems (NYSE: ADS) completed its previously announced acquisitions of Bread, a New York-based provider of customized financing solutions for brands, for $450 million in cash and stock. Bread had raised around $74 million from Kinnevik, Bessemer Venture Partners, Menlo Ventures, RRE Ventures, Colle Capital Partners, and Cue Ball. http://axios.link/G3bd • NortonLifeLock (Nasdaq: NLOK) agreed to buy German cybersecurity company Avira from Investcorp Technology Partners for $360 million in cash. www.avira.com     More M&A • Cisco (Nasdaq: CSCO) agreed to buy London-based cloud communications software firm IMImobile (LSE: IMO) for around $730 million. http://axios.link/TsTU • Connells sweetened its all-cash takeover offer for rival British real estate agency Countrywide (LSE: CWD) to £112 million. http://axios.link/mriT • Moncler (BIT: MONC), an Italian luxury apparel retailer, agreed to buy smaller rival Stone Island at an enterprise value of around €1.15 billion. http://axios.link/ONFz     Fundraising • Highland Europe raised €700 million for its fourth fund, and promoted Jean Tardy-Joubert, Gajan Rajanathan and Ronan Shally to partner. http://axios.link/ZWu8     It's Personnel • Randy Dearth is joining SK Capital Partners as a senior director. He previously was president and CEO of GCP Applied Technologies (NYSE: GCP). www.skcapitalpartners.com • Greycroft promoted Will Szczerbiak to partner and Brentt Baltimore to principal. www.greycroft.vc 🚑 Welsh, Carson, Anderson & Stowe promoted Nick O'Leary to general partner. O'Leary joined WCAS in 2015 and focuses on health care deals. www.wcas.com     Final Numbers Data: Yahoo! Finance; Chart: Danielle Alberti/Axios Go deeper: Biden's post-election stock bump tops Trump's     A message from Cooley Continued strength during the pandemic     Redpoint Ventures' Logan Bartlett shares his take on the state of venture capital investing and the findings of Cooley's Q3 Venture Financing Report. Learn more about Bartlett's key insights on evaluating new investments during the pandemic and resilience in the deal market.   ✔️ Thanks for reading Axios Pro Rata! Please ask your friends, colleagues and webcasters to sign up.   Axios thanks our partners for supporting our newsletters. Sponsorship has no influence on editorial content. Axios, 3100 Clarendon B‌lvd, Suite 1300, Arlington VA 22201   You received this email because you signed up for newsletters from Axios. Change your preferences or unsubscribe here.   Was this email forwarded to you? Sign up now to get Axios in your inbox.   Follow Axios on social media: