Axios Pro Rata: Bed Bath & Bonds

Plus, data center capital. | Wednesday, August 31, 2022

Open in app View in browser     Axios Pro Rata By Dan Primack · Aug 31, 2022     Top of the Morning Illustration: Sarah Grillo/Axios   Private equity keeps piling into data centers, despite the warnings of a veteran short-seller. Driving the news: An investor group yesterday agreed to pay $1.5 billion for a 35% stake in Dallas-based DataBank, while Malaysian telco Time Dotcom reportedly short-listed final bidders for a data center unit that could be valued at around $600 million. There's also the ongoing auction process for London-based data center operator Global Switch, which is expected to fetch more than $10 billion. By the numbers: 2022 already is a record year for PE investment in data centers, per PitchBook. The research group reports $41.5 billion of deal value as of Aug. 25, which doesn't include DataBank, topping the $36.8 billion from 2013 and last year's $27.7 billion tally. The year's largest data center buyout was CyrusOne, which KKR and Global Infrastructure Partners took private for around $15 billion. The big picture: Private equity's interest in data centers is largely about predictable cash flows. Plus, there's dry powder pressure tied to the infrastructure fundraising boom, and a PE belief that legacy location is a key differentiator. There's at least one notable naysayer: Jim Chanos, who's raising several hundred million dollars for a fund that will short U.S. data center groups. Yes, Chanos invests in public equities instead of in private equities. But his thesis would hold for both. He basically believes that cloud giants like Amazon, Google and Microsoft will come to dominate the data center market. Not just by building massive facilities for their own services, but by cheaply leasing out space in those data centers to others that currently contract with traditional players. For context, Chanos has made some very good short bets (e.g., Enron) and some very bad ones (e.g., Tesla). The bottom line: This could become private equity vs. Big Tech. Or maybe the other way around.     The BFD Illustration: Maura Losch/Axios   Bed Bath & Beyond (Nasdaq: BBBY) today confirmed details of its financial restructuring, including the receipt of a $375 million loan from Sixth Street Partners and the expansion of its existing credit facility by around $125 million. Why it's the BFD: This may be the cash-strapped company's last bite at the turnaround apple, lest it join onetime rival Linens 'n Things in the retail refuse bin. More moves: BBBY also said it plans to close 150 stores and lay off around 20% of its employees "across corporate and supply chain." Backstory: A source familiar with the deal says that Sixth Street was one of six bidders for the high-yield loan, in a JPMorgan-led process. It adds that the debt deal isn't contingent on BBBY's plans to sell new shares. The bottom line: "The financing provides much-needed liquidity at the most important time of the year, assuring nervous vendors as the retailer stocks up for the holidays." — Richard Collings, Axios Pro Retail Deals     Venture Capital Deals • EarlySalary, an Indian digital lending startup, raised $110m co-led by TPG Rise Fund and Norwest Venture Partners. https://axios.link/3pSTZaK 🚑 Happy Health, an Austin, Texas-based developer of a mood and fitness tracking ring, raised $60m in a Series A round led by ARCH Venture Partners. https://axios.link/3R3JnSs • Bitlevex, an Estonian crypto options trading platform, raised $50m from Gem Digital. www.bitlevex.com • Proof, an NFT collective founded by Kevin Rose, raised $50m in Series A funding. Andreessen Hoorowitz led, and was joined by Seven Seven Six, True Ventures, Collab+Currency, Flamingo DAO, SV Angel and VaynerFund. https://axios.link/3RaFYBu • Mavenoid, a Swedish provider of support and onboarding tools for hardware companies, raised $30m in Series B funding. Smedvig Capital led, and was joined by Creandum, Mosaic, Point Nine Capital, NordicNinja and ABB Technology Ventures. https://axios.link/3CFd3kx • Ambassador Labs, a Boston-based provider of code deployment software, raised $20m led by Insight Partners. www.getambassador.io 🚑 Qbtech, a Swedish developer of testing software for ADHD symptoms, secured up to €15m from Verdane. www.qbtech.com • Stacked, an LA-based video streamer for web3 games, raised $12.9m in Series A funding led by Pantera Capital. https://axios.link/3wJtkkC • Propseller, a Singaporean real estate transaction platform, raised $12m in Series A funding co-led by Vertex Ventures Southeast Asia and India. https://axios.link/3Roh6G6 • Koop, a "protocol powering community-governed networks," raised $5m. 1confirmation and Variant Fund co-led, and were joined by Palm Tree Crew, Day One Ventures, Ethereal Ventures, DeFi Alliance, Volt Capital, PearVC, DCF God, 0xmons, Cooper Turley and Balaji Srinivasan. www.koop.xyz • Sei Labs, a blockchain startup that seeks to accelerate DeFi transactions, raised $5m in seed funding. Multicoin Capital led, and was joined by Coinbase Ventures and GSR. https://axios.link/3CGKx1X • Duplo, a Nigerian B2B payments startup, raised $4.3m in seed funding from Liquid2 Ventures, Soma Capital, Tribe Capital, Commerce Ventures, Basecamp Fund, YC and Oui Capital. https://axios.link/3D12wQX • Justhome, a Berlin-based financing platform for first-time homebuyers, raised €3.3m led by Target Global. www.justhome.co 🚑 28, a hormone cycle-focused wellness startup, raised $3.2m in seed funding. Thiel Capital led, and was joined by Learn Capital and Steel Perlot. https://axios.link/3AVQNBr 🚑 Healee, a Tampa, Fla.-based customizable digital health solution for health care orgs, raised $2m in seed funding. Nina Capital led, and was joined by Calm/Storm Ventures, KAYA VC and insider Eleven Ventures. www.healee.com • Pixxel, an Indian developer of Earth imaging technology, raised strategic funding from Accenture. www.pixxel.space     A message from Axios The Axios Pro Labor Day Sale     There's never been a better time to become an Axios Pro subscriber. How it works: Get your first Axios Pro newsletter tomorrow, plus exclusive event invitations, networking opportunities and more. Offer ends September 6th. Use code LABORDAY at checkout to get $300 off your subscription.     Private Equity Deals • Lone Star Funds of Texas was awarded $216m in damages from the South Korean government, via a World Bank arbitration tied to Lone Star's 2003 purchase of Korea Exchange Bank. Lone Star had sought around $4.7b when it filed suit in 2012, arguing that the government had illegally interfered with its efforts to sell the asset. https://axios.link/3AAcCFs • Beqom, a Swiss portfolio company of Sumeru Equity Partners, acquired Our Tandem, an Irish continuous performance management platform that had raised around $5m from VC firms like Claret Capital Partners, Enterprise Ireland and Gaingels. https://axios.link/3Rrivf3 • Blue Point Capital Partners acquired Water Lilies Food, a Bay Shore, N.Y.-based maker of frozen Asian-inspired cuisine for retail private label and foodservice customers, from AUA Private Equity Partners and Harris Preston & Partners. www.waterliliesfood.com 🔥 Building Industry Partners acquired Valley Fire Protection Systems, a St. Charles, Ill.-based provider of fire protection services. www.valleyfire.com 🚑 Convergix, a Troy, Mich.-based portfolio company of Crestview Partners, acquired AGR Automation, a British provider of automation design and systems integration to the life sciences industry. www.convergixautomation.com • Discovery Education, a Charlotte-based portfolio company of Clearlake Capital Group, acquired Pivot Interactives, a Minneapolis-based provider of scientific activities and labs for students. www.discoveryeducation.com • Essex Bay Capital made a growth equity investment in Strive, an Oakland, Calif.-based employee engagement and wellness platform. www.onestrive.com 🚑 Glide Healthcare agreed to acquire Sanquin Reagents, a Dutch supplier of hematology and immunology reagents to labs, from Sanquin Health Solutions. https://axios.link/3dXeWyu • Harmoni Towers, a Little Rock, Ark.-based portfolio company of Palistar Capital, agreed to buy Parallel Infrastructure, a Charlotte-based tower platform owned by Apollo Global Management. https://axios.link/3TofXA9 • Incline Equity Partners acquired NovaVision, a Boca Raton, Fla.-based manufacturer of consumable security and authentication products. www.novavision.com • Ironbridge Equity Partners acquired Kore Outdoor, a Montreal-based maker of paintball products, from Fulcrum Capital Partners. No financial terms were disclosed. www.koreoutdoor.com ✈ The Italian government picked Certares for exclusive negotiations on buying a majority stake in ITA Airways. https://axios.link/3CKPU0a • KLH Capital acquired Thorpe Specialty Services, a Houston-based provider of maintenance and engineering services to the petrochemicals market, from The Capstreet Group. www.klhcapital.com 🚑 NationsBenefits, a Pleasanton, Calif.-based portfolio company of General Atlantic and BPEA Private Equity, agreed to acquire DeliverLean, a Hollywood, Fla.-based prepared meals company targeting Medicare Advantage members. www.deliverlean.com • Resurgens Technology Partners invested in Knack, a Tampa, Fla.-based no-code software development platform. www.joinknack.com • Thermal Concepts, a Davie, Fla.-based portfolio company of Trivest Partners and Halmos Capital Partners, acquired Irvine Mechanical, an Orlando-based provider of HVAC maintenance and installation services to commercial and industrial customers. www.thermalconcepts.com • Wafra is in talks to buy a minority stake in PE firm Oak Hill Capital Partners from Jefferies, per Bloomberg. https://axios.link/3Q3HuDK     SPAC Stuff ⚡ Convalt Energy, a Watertown, N.Y.-based renewable energy generation company, agreed to go public via Giginternational1 (Nasdaq: G1W), a SPAC led by semiconductor vet Avi Katz. https://axios.link/3pVVqFs • Corcentric, a Cherry Hill, N.J.-based procurement and accounts payable software provider owned by Bregal Sagemount, agreed to terminate its $1.2b merger agreement with North Mountain Merger Corp. (Nasdaq: NMMC). https://axios.link/3R6gghi • Newsight, an Israeli chipmaker, agreed to go public at an implied $380m enterprise value via Vision Sensing (Nasdaq: VSAC), a SPAC led by George Sobek (ex-Citadel). Newsight raised a $7m Series A round in 2020 led by Infinity Group. https://axios.link/3wFK1gA 🚑 Ocean Biomedical, a Providence, R.I.-based biopharma firm, agreed to go public at an implied $345m valuation via Aesther Healthcare Acquisition Corp. (Nasdaq: AEHA). Aesther previously terminated a deal to buy United Gear & Assembly, a Wisconsin maker of precision gears for EVs. https://axios.link/3pZjHua     Liquidity Events 🚑 DW Healthcare Partners sold Med-Pharmex, a Pomona, Calif.-based veterinary drugmaker, to Dechra Pharmaceuticals (LSE: DPH). www.medpharmex.com • Nazara Technologies, an India-listed gaming and sports media firm, acquired WildWorks, a Salt Lake City-based children's interactive entertainment company whose backers included Signal Peak Ventures. https://axios.link/3wH61rL • Time bought Brandcast, an SF-based provider of software for building marketing websites, per Axios. It's Time's first acquisition since Marc and Lynne Benioff bought the media company in 2018, while Brandcast had raised over $30m (plus got a PPP loan) from investors like Marc Benioff, Shasta Ventures, Affinity Group, TPG and Buchanan Investments. https://axios.link/3AxNK0Y     More M&A • Society Brands, a Canton, Ohio-based ecommerce aggregator whose VC backers include TomorrowVentures, acquired screen protector maker Power Theory. https://axios.link/3AYwaVk • The Washington Post has considered trying to buy other media groups, including The Associated Press, The Guardian and The Economist, per the NY Times. Unclear how WashPost even would go about buying The AP (co-op) or The Guardian (held in a trust).     Fundraising • Seven Seven Six, the VC firm led by Alexis Ohanian, is raising $177.6m for a fund to buy crypto tokens, per The Information. https://axios.link/3TFMsdh     It's Personnel 🚑 Alex Albert, a founding partner of Patient Square Capital, was named chairperson of the Healthcare Private Equity Association. www.hcpea.org • Karan Mehandru (ex-Jama Software and CommerceIQ) joined Madrona Venture Group as a managing director. The Seattle-based firm also announced plans to open a Palo Alto office. https://axios.link/3AVGFZA • Amanda Tallman joined Monroe Capital as VP of direct originations. She previously was with PNC Bank. www.monroecap.com     Final Numbers Source: Axios Visuals     A message from Axios The Axios Pro Labor Day Sale     There's never been a better time to become an Axios Pro subscriber. 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