Axios Pro Rata: Here we go again

Plus, Peltz's burger bag. | Tuesday, January 17, 2023

Open in app View in browser     Axios Pro Rata By Dan Primack · Jan 17, 2023 ⚖️ What to watch: Elon Musk is on trial today in San Francisco, over his infamous 2018 tweet about having "funding secured" to take Tesla private. In short, a group of shareholders are suing Musk for making false statements that allegedly caused them to lose money.     Top of the Morning Illustration: Aïda Amer/Axios   Treasury Secretary Janet Yellen chose Friday the 13th to inform Congress that the federal government is likely to hit its debt limit this Thursday, and that "extraordinary measures" will be taken to avoid default. Why it matters: This could set up the sort of macro shock that sparks a recession, or intensifies a mild one. Why it matters less: Default isn't imminent. Yellen says the government should be able to keep paying bondholders until June, while some believe that Treasury could eek out a couple more months. The big picture: Dealmakers are in an uncomfortable spot. Many believe that the equity value reset process is nearing its end, but do you buy ahead of a potential economic calamity? Even if the U.S. ultimately keeps paying its bills, stocks could swoon as we push closer to the brink. As Axios' Matt Phillips writes: "In 2011, a chaotic fight over raising the debt limit pushed the federal government near default, caused a sharp stock market downturn and ultimately prompted credit rating agencies to downgrade the national credit rating." Reminder: Debt limit fights are crises manufactured for political purposes, and are fairly new phenomena. It's not about raising the debt limit so that America can spend more in the future. It's about ensuring that America can pay debts already incurred, via budgets previously passed by Congress. The bottom line: We already knew there were all sorts of reasons why deal activity could rebound from 2022 levels, whether those deals involve venture capital, private equity, IPOs or M&A. Now we have a countervailing force.     The BFD Illustration: Brendan Lynch/Axios   Trian Fund Management, the activist hedge fund led by Nelson Peltz, said it will not seek to take Wendy's (Nasdaq: WEN) private. Why it's the BFD: At the counter, this reflects how Wendy's has grown revenue, made C-suite changes, announced a share buyback and increased its dividend. In the kitchen, it's about Peltz turning his attentions to a much more lucrative target in Disney. Backstory: Trian has been involved with Wendy's for over a decade, with it and Peltz currently holding a 19.35% ownership stake. Last May, the firm said it was considering a takeover bid, either alone or with a third party. The bottom line: Fast food gets more attractive to private equity in tough economic environments. Expect buyout firms to keep one eye on the burger-flipper's reorg and another on macro numbers, to see if there's a match. One possible suitor is Roark Capital, which bought Arby's from Wendy's in 2011.     Venture Capital Deals • Impel, a Syracuse, N.Y.-based provider of digital engagement software for automakers, raised $104m from Silversmith Capital Partners. www.impel.io ⚡ Aerones, a Latvian developer of robots for wind turbine maintenance and inspection, raised $30m. Lightrock and Haniel co-led, and were joined by Metaplanet and Mantas Mikuckas. https://axios.link/3ZxHfqC • Sollum, a Montreal-based provider of LED lighting solutions for greenhouses, raised C$30m from Idealist Capital and Fondaction. www.sollumtechnologies.com • Authenticx, an Indianapolis-based provider of conversational intelligence solutions to the health care market, raised $20m in Series B funding. Blue Heron Capital led, and was joined by Beringea, Indiana Next Level Fund/50 South Capital Advisors, High Alpha, Mutual Capital Partners, Signal Peak Ventures, Allos Ventures, Elevate Ventures and M25. www.authenticx.com • Splitero, a San Diego-based fintech for helping homeowners access home equity, raised $11.7m in Series A funding. Fiat Ventures led, and was joined by Gemini Ventures, Joint Effects, PBJ Capital, Permit Ventures, Dream Ventures, Goodwater Capital, Spark Growth Ventures and Oyster Fund. www.splitero.com • Locad, an Indian provider of cross-border e-commerce logistics software, raised $11m in new series A funding. Reefknot Investments led, and was joined by Access Ventures, JG Summitm WTI and insiders Sequoia India, Surge, Febe Ventures and Antler. https://axios.link/3WkT8NQ • Cumul.io, a Belgian low-code BI analytics platform for SaaS businesses, raised €10m in Series A funding. Hi Inov-Dentressangle led, and was joined by Axeleo Capital, LRM and SmartFin. https://axios.link/3XmPtAr • Syky, a web3 incubator and marketplace for luxury fashion, raised $9.5m in Series A funding. Seven Seven Six led, and was joined by Brevan Howard Digital, Leadout Capital, First Light Capital Group and Polygon Ventures. https://axios.link/3QIPGLU • Komunal, an Indonesian rural bank digitization startup, raised $8.5m. East Ventures Growth Fund led, and was joined by Sustainable Technology Fund, Skystar Capital, Sovereign's Capital, Ozora and Gobi Partners. https://axios.link/3X9sSat 👟 The Edit LDN, a London-based sneaker resale marketplace, raised $4.8m in seed funding led by Regah Ventures. www.theeditldn.com • Stell, an industrial parts ordering workflow startup, raised $3.1m in pre-seed funding co-led by Wischoff Ventures and Third Prime VC. https://axios.link/3CP6VW7 • Kwara, a Kenyan credit union digitization startup, raised $3m in new seed funding from DOB Equity, Globivest, Willard Ahdritz, One Day Yes and Base Capital. https://axios.link/3QLilA3 • Darwinbox, an Indian HR management platform, said Microsoft invested an undisclosed amount. It's an extension to a Series D round that initially closed in early 2022 with $72m led by TCV at a valuation north of $1b. https://axios.link/3ZJVBnS     A message from Axios Smart, brief writing will transform your essential comms     Join us Jan. 19 to learn the methodology behind Axios' Smart Brevity® style — and the techniques that can elevate your own essential communications. You'll see: The research behind Smart Brevity. How to use it in smart, essential communications. Axios HQ, the software that brings it to life. Sign up     Private Equity Deals • BDT, the merchant bank formed by Byron Trott, completed its previously announced merger with Michael Dell's MSD Partners. • Advantek, an Eden Prairie, Minn.-based portfolio company of Cornell Capital, acquired Malaysian precision packaging firm LKTT. www.advantek.com • ASG, a portfolio company of Alpine Investors, acquired ThinkLP, a Canadian provider of loss prevention and safety case, audit and analytics management software. https://axios.link/3WhC6An • BlackRock acquired a minority stake in Human Interest, an SF-based provider of 401(k)s for small and midsized businesses that's raised over $330m in VC funding from firms like SoftBank and TPG Rise Fund. https://axios.link/3GKPCqf ⚡ EQT Private Equity launched a €26 per share public takeover tender for va-Q-tec, a listed German provider of thermal energy efficiency and temperature-controlled supply chain solutions. Mubadala and Cinven also are participating. https://axios.link/3XfkuX7 • H.I.G. Capital acquired Classic Lifts, a British provider of lift engineering and maintenance services. www.classiclifts.co.uk • RoadSafe, a Romeoville, Ill.-based portfolio company of Trilantic North America, acquired Western Remac, a Woodridge, Ill.-based provider of sign manufacturing and installation services. www.roadsafetraffic.com 🚑 SCIRIS, a health care communications firm owned by Waterland Private Equity, acquired Source Health Economics, a British agency focused on health economics and outcomes research. www.sciris.com • Wind Point Partners acquired Hasa, a Saugus, Calif.-based provider of water treatment solutions, from GHK Capital Partners. www.hasapool.com     Public Offerings • Ionos, a German web hosting company owned by United Internet and Warburg Pincus, confirmed plans to go public in Frankfurt. https://axios.link/3Zz5aGa     SPAC stuff • Spectaire, maker of a micro-mass-spectrometer device for measuring emissions, agreed to go public via Perception Capital Corp. II (Nasdaq: PCCT). https://axios.link/3WjQNTc'     Liquidity Events • Brookfield Asset Management is seeking a buyer for Everise, a Plantation, Fla.-based tech outsourcing firm that could fetch around $1b, per Bloomberg. https://axios.link/3QHMRL2 • Lessen, a Scottsdale, Ariz.-based property services platform, acquired Chicago-based facilities maintenance software provider SMS Assist for $950m. Lessen has raised over $200m in VC funding from firms like Fifth Wall, Khosla Ventures and General Catalyst, while SMS Assist raised over $250m from firms like Goldman Sachs, HDS Capital, Insight Partners and Pritzker Group VC. https://axios.link/3H70Gzw • Sika (SWX: SIKA), a Swiss chemicals company, is in talks to sell select admixtures assets to Ineos Group, in order to secure antitrust approval for its $6b purchase of German construction chemicals firm MBCC Group from Lone Star Funds. https://axios.link/3WaHLYF     More M&A • Liberty Mutual hired JPMorgan to explore a sale of its Latin America business, which could fetch around $1b, per Bloomberg. https://axios.link/3CQeonK • MJ Hudson Group (LSE: MJH), a British provider of services to asset managers, hired Alvarez & Marsal to explore unit divestitures. https://axios.link/3ZEsgLw • National Instruments (Nasdaq: NATI) said it's hired bankers to explore strategic alternatives, including a possible sale. The testing and measuring equipment maker's shares rose as much as 19% on the news, closing Friday with a market cap north of $6b. https://axios.link/3H8x052 • Ryan Cohen, the Chewey co-founder turned meme lord activist investor, has acquired a stake worth hundreds of millions of dollars in Alibaba (NYSE: BABA), and is pushing for more stock buybacks. https://axios.link/3krFhYE • Whirlpool (NYSE: WHR) agreed to divest most of its EMEA businesses via transactions with Turkish home appliance rival Arcelik. https://axios.link/3iHIWkH     Fundraising • ICI Fund, a Fort Collins, Colo.-based VC firm led by Gili Elkin, is raising $50m for its second fund, per an SEC filing. www.ici.fund     It's Personnel • Steve Pagliuca is retiring from Bain Capital after 34 years. He will remain a senior adviser. https://axios.link/3GOVzlV • Amber Atherton joined seed fund Patron as a partner. She previously was head of community growth at Discord. www.patron.xyz • Kelly Grier, former Americas managing partner of Ernst & Young, joined Permira as a senior adviser. www.permira.com 🚑 Tim Lawler, previously a partner with Waud Capital, joined KKR as an executive adviser to the firm's Americas health care team. www.kkr.com • Sebastien Siou joined Devon Park Advisors as a partner, after having been a partner with Whitehorse Liquidity Partners. www.devonparkadvisors.com 🚑 Catherine Soler joined Patient Square Capital as an ESG-focused director in the firm's transformation and growth group. She previously was with Vista Equity Partners. www.patientsquarecapital.com • Leeds Equity Partners promoted Kevin Malone and David Neverson to managing directors. www.leedsequity.com     Final Numbers Data: U.S. Treasury Department, FactSet; Chart: Thomas Oide/Axios     A message from Axios Essential communications your team will actually read     Up to 80% of people only scan what you send — meaning essential communications are getting missed. Axios HQ is a smart platform that trims and formats as you type to create engaging, memorable messages that actually get read. Learn more.   Thanks for reading Axios Pro Rata, and to copy editors Mickey Meece and Bryan McBournie! Please ask your friends, colleagues and Davos denizens to sign up. Your personal deals analyst is here. Navigate through the busy world of VC, PE and M&A with Axios Pro. Talk to our sales team today.   Axios thanks our partners for supporting our newsletters. Sponsorship has no influence on editorial content. 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