Axios Pro Rata: Dyal deal — Tire megamerger — PPP changes

Top of the Morning | Monday, February 22, 2021

Open in app View in browser   Presented By EY   Pro Rata By Dan Primack ·Feb 22, 2021 🚀 Axios Closer, our afternoon biz newsletter, launches today. Sign up here. 🎧 Axios Re:Cap talks with Eventbrite CEO Julia Hartz about how her company became part of the country's vaccine rollout. Listen via Apple, Spotify or Axios.     Top of the Morning Illustration: Sarah Grillo/Axios   Dyal Capital Partners is said to be confident that it will complete its merger with direct lender Blue Owl, and then go public via SPAC at a $12.5 billion valuation. But the complex deal seems to get thornier by the day. We reported last week that Sixth Street Partners sued to block the merger, arguing breach of contract. The complaint is now public, and can be found here. It includes passages from the original investment agreement between Dyal and Sixth Street, but not the entire text. Dyal replied by asking the court to unseal its entire investment agreement with Sixth Street. This redaction battle is more about PR than law, since Delaware Chancery Court has access to the full agreement. And since sources close to both firms believe they're right on the law, don't be surprised if Sixth Street agrees to release at least the relevant portions. Next up: Golub Capital, which like Sixth Street counts Dyal as a passive minority investor, is widely expected to file its own complaint. The argument would be similar, but with two distinctions: It would be filed in New York, not Delaware. Unlike Sixth Street, Golub has a repurchase remedy in its original investment agreement with Dyal. Golub, of course, is not commenting. Dyal also continues to talk, and in some cases negotiate, with some of its other portfolio firms. Cerberus Capital Management, for example, was concerned about how its confidential information would be protected from Owl Rock staff. So it and Dyal signed new, tighter information rights language, per multiple sources. Vista Equity Partners is in talks to either buy back part of its stake from Dyal, or have them transfer to a third party. Sources close to the transaction insist that the timing is just coincidence, and that this would be similar to Silver Lake's three-way deal last fall with Dyal and Mudabala. Sources say that Dyal rivals are calling around, seeing if there are positions that are now in play. The bottom line: The GP stakes fund business has always been collegial, viewed as a win-win for both sides. This is the first public fraying of that fabric.     The BFD Illustration: Sarah Grillo/Axios   Goodyear (Nasdaq: GT) agreed to buy Cooper Tire & Rubber (NYSE: CTB) for around $2.8 billion in cash and stock. Why it's the BFD: This all-Ohio merger would significantly strengthen Goodyear's position as top U.S. tiremaker, and nearly double its presence in China. Details: Cooper shareholders receive the equivalent of $54.36 per share, including $41.75 in cash, representing a 24% premium over Friday's closing price. Bottom line: "The tire industry is recovering from the pandemic slump. Last week French tire maker Michelin predicted business will return to pre-pandemic levels in the second half of 2022, with CEO Florent Menegaux saying the company needs to rebuild inventories after demand snapped back more strongly than expected late last year." — Cecile Daurat, Bloomberg     Venture Capital Deals 🚑 Regor Therapeutics, a Chinese biotech focused on cancer, immune disorders and metabolic diseases, raised $90 million in Series B funding. Lilly Asia Ventures led, and was joined by Loyal Valley Capital, Lanting Capital, TF Capital and Vertex Ventures China. http://axios.link/asOy • Black Lake, a Chinese provider of factory management software, raised around $77 million in Series C funding. Temasek led, and was joined by China Renaissance, Lightspeed Venture Partners and return backers like GGV Capital and GSR Ventures. http://axios.link/Wujz • Earnix, an Israeli developer of predictive customer analytics software for financial institutions, raised $75 million at a $1 billion pre-money valuation. Insight Partners led, and was joined by JVP, Vintage Partners and Israel Growth Partners. http://axios.link/UDBq • Ageras, a Copenhagen-based accounting software and marketplace startup, raised $73 million from Lugard Road Capital. http://axios.link/iUOe • Foxtrot Market, a Chicago-based online convenience store chain, raised $42 million in Series B funding co-led by Almanac Insights and Monogram Capital Partners. http://axios.link/9qvd 🚑 Nanit, an Israeli maker of a baby sleep and health monitors, raised $25 million in Series C funding. GV led, and was joined by JVP, Upfront Ventures, RRE Ventures and Rho Capital Partners. www.nanit.com • Abound, a New York-based wholesale marketplace, raised $23 million in Series A funding. Left Lane Capital led, and was joined by RiverPark Ventures, All Iron Ventures, Red Antler and Prose. http://axios.link/wOr9 • EquityBee, a Palo Alto-based stock option financing marketplace, raised $20 million. Group 11 led, and was joined by Zeev Ventures, Battery Ventures and ICON Continuity Fund. www.equitybee.com • Promise, a Mountain View-based payment plan platform for government and utility bills, raised $20 million in Series A funding from Kapor Capital, XYZ, Bronze, First Round Capital and YC. http://axios.link/np12 • Torii, an enterprise SaaS management startup, raised $10 million in Series A funding. Wing VC led, and was joined by Entree Capital, Global Founders Capital, Scopus Ventures and Uncork Capital. http://axios.link/I0Ii • Fundtastic, an Indonesian retail investing platform, raised $7.7 million in Series A funding. Ascend Capital Group led, and was joined by Indivara Group. http://axios.link/fNzA     A message from EY In the NextWave, PE firms must reimagine business strategies     To remain competitive, firms will need to continue to maximize value through traditional levers as well as adopt new levers of value creation: digital, purpose and transparency, and talent. Read our latest EY NextWave Private Equity Report.     Private Equity Deals • Ardian increased its stake to 60% in Jakala, an Italian marketing tech company. www.jakala.com 🚑 The Carlyle Group agreed to sell Ameos, a Switzerland-based health clinic and nursing home chain, to company founder Axel Paeger and Intermediate Capital Group. http://axios.link/ILVp • Investcorp acquired a majority stake in KSM Consulting, an Indianapolis-based data and tech consulting firm, from Renovus Capital Partners (which retains a minority stake). www.ksmconsulting.com • Mill Rock Packaging Partners, a portfolio company of Mill Rock Capital, acquired All Packaging, an Aurora, Colo.-based specialty paper packager. www.millrockpackaging.com 🚑 Oak Hill Capital Partners is in talks to buy Tampa, Fla.-based animal health firm American Veterinary Group for more than $400 million from Trive Capital, per PE Hub. http://axios.link/UbZu • TA Associates invested in Backstage, a New York-based freelancer marketplace for creative talent and content creators. In related news, Backstage acquired both StarNow (New Zealand) and The Mandy Network (UK). www.backstage.com • VMG Partners acquired a minority stake in fitness studio chain Solidcore. http://axios.link/NYWI     Public Offerings • Coinbase was valued at just over $100 billion in a recent private market share sale ahead of its upcoming public listing, Axios has learned. Read more. 🚑 Oscar, a New York-based health insurer, set IPO terms to 31 million shares at $32-$34. It would have an initial market cap of $6.5 billion, were it to price in the middle, plans to list on the NYSE: OSCR) and raised around $1.4 billion from firms like Alphabet, Thrive Capital, Founders Fund, Formation8, Fidelity, General Catalyst and Khosla Ventures. http://axios.link/f8a3 • Roblox, an online gaming platform for kids and teens, said it plans to go public via direct listing on March 10. http://axios.link/aR2g     SPAC Stuff • Apex Clearing Holdings, a Dallas-based clearinghouse, agreed to go public at a $4.7 billion valuation via reverse merger with Northern Star Investment Corp. II (NYSE: NSTB), a SPAC led by magazine vet Joanna Coles and New York Islanders co-owner Jonathan Ledecky. http://axios.link/Q6Ep 🚑 ATI Physical Therapy, a Bolingbrook, Ill.-based outpatient physical therapy provider owned by Advent International, agreed to go public at a $2.5 billion valuation via reverse merger with Fortress Value Acquisition Corp II (NYSE: FAII). www.atipt.com • Cyxtera, a Coral Gables, Fla.-based provider of retail colocation and interconnection services, agreed to go public at a $3.4 billion valuation via reverse merger with Starboard Value Acquisition Corp. (Nasdaq: SVAC). It includes a $250 million PIPE from Fidelity and Starboard clients. Cyxtera was acquired in 2017 by an investor group that includes BC Partners, Medina Capital, M Capital Partners and Longview Asset Management. http://axios.link/3hDn • Parallel, a multi-state cannabis operator, agreed to go public at a US$1.89 billion valuation via reverse merger with Ceres Acquisition Corp., which is listed on Canada's NEO Exchange. www.liveparallel.com • Xos, a Los Angeles-based electric truck maker, agreed to go public at a $2 billion valuation via reverse merger with NextGen Acquisition Corp. (Nasdaq: NGAC), a SPAC led by Greg Summe (Glen Capital Partners) and George Mattson (ex-Goldman). Xos had raised around $20 million from firms like Build Capital Partners, T-Bird Capital and Proeza Ventures. http://axios.link/mFYG • Aspirational Consumer Lifestyle II, a SPAC formed by execs at LVMH and L Catterton, filed for a $300 million IPO. L Catterton Asia execs also filed for a separate, $250 million IPO. http://axios.link/8UIW • B Capital Technology Opportunities, a tech SPAC formed by B Capital Group, filed for a $300 million IPO. http://axios.link/bfRV • Bannix Acquisition, a B2B enterprise software SPAC, filed for a $100 million IPO. http://axios.link/891w • Elliott Management filed for two tech SPACs, one targeting $1 billion and one targeting $500 million. http://axios.link/8Uxa • Gores Guggenheim, a SPAC formed by The Gores Group and Guggenheim Partners, filed for a $750 million IPO. http://axios.link/xmnl • MSD Acquisition, a SPAC formed by MSD Partners, filed for a $500 million IPO. Directors include Jim Breyer. http://axios.link/HaCB • New Providence Acquisition, a consumer SPAC led by former soda exec Gary Smith, filed for a $300 million and $200 million SPAC. http://axios.link/nXYO • Ocelot Acquisition Corp I, an e-commerce and logistics SPAC, filed for a $250 million IPO. http://axios.link/J7JW • Plum Acquisition I, a SPAC led by former Xerox CEO Ursula Burns, filed for a $300 million IPO. http://axios.link/lDF8 • TPB Acquisition, a sustainable food and bio SPAC, filed for a $250 million IPO. http://axios.link/hdn8 • TradeUP Acquisition, a tech SPAC led by Jianwei Li (Zhencheng Capital) and James Yang (CEO of Zhongchao), filed for a $40 million IPO.     Liquidity Events • AEA Investors is seeking a buyer for Traeger, a Salt Lake City-based grill-maker, for more than $3 billion, per NY Times Dealbook. 🚑 Kuehne + Nagel International agreed to buy Chinese freight forwarder Apex International from MBK Partners for $1.5 billion. http://axios.link/dZXm • MidOcean Partners hired William Blair to find a buyer for The Planet Group, a Chicago-based life sciences staffing group with more than $50 million in EBITDA, per PE Hub. http://axios.link/DIKJ • Redfin (Nasdaq: RDFN) agreed to buy RentPath, the Atlanta-based owner of ApartmentGuide.com, Rent.com and Rentals.com, for $608 million in cash from TPG and Providence Equity Partners. http://axios.link/aW3B • Thomas H. Lee Partners is seeking a buyer for Material Handling Systems, a Mt. Washington, Ky.-based provider of parcel sorting solutions that could fetch around $3 billion, per Bloomberg. http://axios.link/Kzid     More M&A • Bank of Queensland (ASX: BOQ) agreed to buy Australian digital lender ME Bank for A$1.33 billion from a group of 26 industry pension funds. http://axios.link/UJYK • Kohl's (NYSE: KSS) is under pressure from a group of activist investors that haver amassed a 9.5% stake in the retailer, and nominated nine people to the 12-person board. http://axios.link/kDLd • Silicon Labs (Nasdaq: SLAB) is considering a sale of its analog chip unit, which could fetch between $2 billion and $3 billion, per Bloomberg. http://axios.link/Xui5     Fundraising • Avid Ventures, a New York-based firm led by Addie Lerner (ex-General Catalyst) and Tali Vogelstein (ex-Bessemer), raised $68 million for its debut fund. http://axios.link/BOcF • Sequoia Capital told limited partners that some of their personal and financial information may have been accessed by a third party, after a Sequoia employee's email was successfully phished, Axios has learned.     It's Personnel • David Baga is stepping down as COO of Lightspeed Venture Partners, to become CEO of "on-demand pay" startup Even. http://axios.link/yuPq ⚡ Iain Conn, former CEO of Centrica, joined The Blackstone Group as a senior adviser for energy and sustainability investing. www.blackstone.com • John Stroup, executive chair of Belden, joined Clayton, Dubilier & Rice as an operating adviser. www.cdr-inc.com • Bruce Wallace, former COO of Silicon Valley Bank, joined fintech Brex as CEO of its new banking subsidiary. http://axios.link/1NfU     Final Numbers Source: Goldman Sachs. Survey of 1,293 of GS 10,000 Small Business participants, conducted by Babson College and David Binder Research, Feb. 15-16, 2021. What's new: President Biden today will announce changes to the Paycheck Protection Program, per CNBC: For two weeks beginning Wednesday, SBA only will accept PPP applications from businesses with fewer than 20 employees. New guidance clarifying that legal U.S. residents without citizenship are eligible, as are business owners delinquent on student loans and those with non-fraud felony arrests or convictions. Go deeper: Small biz says PPP 2 isn't enough, more relief needed     A message from EY PE firms have navigated 2020 well, but they can't slow down now     CFOs say they plan to double down on past bets in technology and people and continue expanding their scope to focus on new areas such as sustainable investing and to further initiatives in diversity and inclusiveness. Read our latest 2021 EY Global Private Equity Survey.   ✔️ Thanks for reading Axios Re:Cap! Please ask your friends, colleagues and tire pumpers 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: