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| In today's Daily Pitch, you'll find: | | | | | |
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| PE sellers use earnouts, seller's notes to close deals | |  | | (Mario7/Shutterstock) | | | In a cooling deal market, PE buyers have more power to demand attractive terms from sellers, such as deferred payments and earnout provisions.
Market participants say a widening valuation gap, caused by heightened economic uncertainty and a tight credit market, has incentivized sellers to agree to deal sweeteners. | | | | | | | | | Squeeze, freeze or bond? Unpacking hydrogen's storage dilemma | | Hydrogen has long been viewed as a future fuel thanks to its potential to decarbonize sectors like long-distance transport and high-heat industrial processes. But its physical properties—a little hydrogen takes up a lot of space—make the element a nuisance to store and transport.
Our latest emerging space brief on hydrogen storage details the technological approaches, such as compression, low-temperature liquid storage and chemical carriers, as well as the limitations and outlook for the segment. | | | | | | | |
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| A message from RBC Capital Markets | | |
| Will tech M&A lead the charge again? | | Technology companies dominated the M&A markets last year, with 37% of all deals relating to the tech sector. Will tech continue to drive M&A in 2023? With key players cash rich and ready to do transactions, RBC Capital Markets' experts say it will.
Explore the implications across private equity, the IPO market, and accelerating growth across tech and fintech specifically on Strategic Alternatives, the RBC M&A podcast. | | | | | | | |
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| PE lenders stung by Carlyle's reversal on $15B buyout | |  | The Carlyle Group co-founder David Rubenstein
(lev radin/Shutterstock) | | | The Carlyle Group's decision to dissolve a $15 billion deal with Veritas Capital for a stake in its healthtech company Cotiviti delivered a blow to multiple firms—including the PE managers that had hoped to assist with a massive financing package.
Now, a direct loan of record-breaking size, with several firms attached, won't see the light of day. | | | | | | | | | Market Map: Carbon capture takes off | |  | | (Kendall Anderson/Shutterstock) | | | Climate tech has had a rocky start to the year.
The first quarter of 2023 closed with a 36% decline in total VC deal value globally from the previous quarter, suggesting the tech slowdown could be coming for green startups.
But there are still plenty of reasons for optimism, as governments and corporations commit long-term capital to net-zero goals. PitchBook's climate tech market map outlines where capital is flowing and the major players across carbon capture, carbon fintech and carbon accounting. | | | | | | | | | The mega-funds boom of 2022 finished with a fizzle | | Thirty-five venture funds raised $1 billion or more in 2022—more than three times as many as any year prior to 2021. Andreessen Horowitz alone closed four mega-funds in 2022.
But the breakout years for mega-funds aren't likely to last. Our recent analyst note tracks 60 funds in 2021 and 2022 totaling over $147 billion, driven by VC exit activity topping over $1 trillion in the same time span. LPs were paying venture more attention and, in turn, fund managers were rushing to return to market at record speed. But as one-year performance fell and exits turned stale in mid-2022, the mega-funds boom came to an end. | | | | | | | | | Startup radar: European VCs on AI startups to watch | |  | | (Sergey Tarasov/Shutterstock) | | | Artificial intelligence is predicted to be a key theme for venture capital this year as investors race to fund the next OpenAI.
We spoke with European VCs active in AI to find out which companies they think are the next game changers. | | | | | | | | | | How China changed the game for countries in default. [Financial Times]
Warren Buffett wants to hold the executives of failed banks accountable, but his suggestions are unlikely to be popular among his peers. [Fortune]
Why private equity is getting into the business of buying its own debt. [Bloomberg] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 532 Deals | 2442 People | 609 Companies | 33 Funds | | | | | | |
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The Daily Benchmark:
2012 Vintage Global Funds-of-Funds | | | | | | |
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| Spark Capital has hired former OpenAI product head Fraser Kelton as a venture partner focused on early-stage AI startups. | | | | | |
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Torl BioTherapeutics, which develops therapeutics for cancer patients, has secured a $158 million Series B led by Goldman Sachs Asset Management.
Alentis Therapeutics, which develops treatments for cancer and fibrotic diseases, has raised a $105 million Series C led by Jeito Capital.
BioVentrix, a medical device company focused on heart failure, has raised a $48.5 million Series A led by Andera Partners.
Biomanufacturing company Wheeler Bio has raised a $31 million Series A led by Charles River Laboratories and Echo.
ThayerMahan, a naval surveillance and defense company, has raised a $30 million Series C led by The Chertoff Group's MC2 Security Fund.
LMS365, which offers an online learning management system, has secured $20 million in a round led by Blue Cloud Ventures.
Singular has led a $13 million Series A for Thynk.Cloud, which provides software to the hospitality sector.
Crowd-sourced camera network Natix has raised $3.5 million in a round led by Blockchange Ventures. | | | | | |
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| Don't miss our upcoming webinar | | Amid green shoots of optimism, stubborn economic uncertainty continues to hinder risk markets, leaving issuers, leveraged loan investors and direct lenders scrambling for deals—especially in the M&A landscape. This webinar examines trends defining the leveraged loan, private credit, high-yield bond and CLO ecosystems. Key topics include: - While refinancings have emerged in the US leveraged loan segment, higher-reward LBO and M&A deals remain scarce.
- With an overall constraint on issuance, the burgeoning private credit segment is having to become more creative to land deals.
- After a grim 2022, the high-yield bond market took flight—but an unsettled inflationary environment could be cause for concern.
Register now to secure your spot. | | | | | | | |
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IBM is considering selling its weather business, which could be worth more than $1 billion, The Wall Street Journal reported. It is likely a PE firm would be the buyer in the event of a sale.
Clearlake Capital Group and Symphony Technology Group have agreed to sell Archer Technologies, a SaaS integrated risk management provider, to Cinven.
Thoma Bravo is weighing the sale of IT company ConnectWise to another PE firm, with Bain Capital as a front-runner, industry news site CRN reported.
Traub Capital Partners has invested in Sabatino Tartufi, which manufactures and distributes truffle-based products from facilities in Italy and Connecticut.
Metric Capital and Scope have acquired a majority stake in Danish toy-maker Maileg. The co-founders of the company retain a significant stake in the business.
Listed PE firm Foresight has invested £2.5 million in the UK's Sprint Electric. The company designs and manufactures drives for controlling industrial motors. | | | | | |
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Lux Capital has closed Lux Ventures VIII on $1.15 billion. The VC firm's largest fund to date, it targets early-stage investments in deep-tech science.
Investment management firm Wellington Management has closed its Biomed II fund with $476 million to invest in next-generation medical treatments.
Mutual life insurance company MassMutual has closed its second MM Catalyst Fund with $100 million to invest in Black-, Latino- and Indigenous-led startups in Massachusetts, as well as startups in overlooked rural areas. | | | | | |
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