Axios Pro Rata: Air battle

Plus, a major supply chain shakeup. | Tuesday, June 28, 2022

Open in app View in browser   Presented By PwC   Axios Pro Rata By Dan Primack · Jun 28, 2022 🛒 You're invited today at 12:45pm ET to a live interactive conversation between Axios Pro's retail deals reporters and Jonathan Duskin, CEO of Macellum Capital Management (the activist pressuring Kohl's) and Eva Press, vice president of Meta's global business group. Register here.     Top of the Morning Illustration: Shoshana Gordon/Axios   When most Americans talk about airlines right now, their focus is on flight delays and cancellations. But there's also a contentious merger battle that could reshape U.S. air travel for years to come. Driving the news: Spirit Airlines shareholders this Thursday will vote on a takeover offer from rival budget carrier Frontier Airlines, which Spirit's board is supporting over a rival bid from JetBlue. The big picture: Buying Spirit would make either Frontier or JetBlue the fifth-largest U.S. airline, which almost certainly would invite antitrust scrutiny (particularly if JetBlue prevails, given that it's already been sued by the DOJ over its alliance with American Airlines). It also could kick off a new wave of carrier consolidation. How we got here: This has been a very indirect flight, so a quick timeline: In February, Spirit and Frontier announced a $2.6 billion cash-and-stock merger that expanded to $6.6 billion once debt and lease liabilities were included. In April, JetBlue made an unsolicited $3.6 billion, all-cash bid. In early May, Spirit rejected JetBlue's offer, saying it was unlikely to pass antitrust review. JetBlue responded by effectively going hostile, urging Spirit shareholders to reject the Frontier bid. After that, Frontier and JetBlue engaged in a game of incremental one-upmanship. This included increased per share bids, escalating breakup fees and cash dividends. Spirit even pushed back the initial shareholder vote, which had been scheduled for earlier this month, as the two suitors kept sweetening their offers. Where things stand: Frontier's final bid, which arrived last Friday, is $4.13 per share, which is $2 per share higher than its original entry and includes $2.22 per share as a pre-paid cash dividend. JetBlue increased its offer again just yesterday, raising its breakup fee to $400 million from $350 million and its cash dividend to $2.50 from $1.50. It also tacked on a 10 cent per share monthly dividend, or ticking fee, until deal completion or termination. Shareholder proxy firms ISS and Glass Lewis now both support Frontier's bid. ISS had originally urged Spirit shareholders to reject it. The bottom line: Spirit shareholders finally get their say on Thursday, but regulators will have the final word.     The BFD Illustration: Gabriella Turrisi/Axios   GIC, OMERS Infrastructure and Wren House agreed to buy Direct ChassisLink, a Charlotte, N.C.-based chassis lessor, from Apollo and EQT for an undisclosed amount. Why it's the BFD: A key part of America's supply chain infrastructure will now be owned by a trio of foreign investment firms, as DCLI is the country's largest intermodal chassis provider. Don't be surprised to see CFIUS take a hard look, particularly given all of last year's marine port bottlenecks. Details: GIC is a Singaporean sovereign wealth fund, OMERS is a Canadian pension and Wren House is a British private equity firm. Elsewhere: Ericsson (Nasdaq: ERIC) of Sweden said that the close of its $6.2 billion acquisition of New Jersey-based cloud communications provider Vonage (Nasdaq: VG) is being pushed back due to a pending CFIUS review. The bottom line: DCLI said it has over 151,000 marine and 100,000 domestic chassis in its fleet.     Venture Capital Deals • Pave, an SF-based compensation platform, raised $100m in Series C funding. Index Ventures led, and was joined by Andreessen Horowitz, YC Continuity Fund, LocalGlobe, Craft Ventures, Original Capital, Backend Capital and Contrary Capital, Jeff Weiner and Tudor Havriliuc. Pave also acquired Advanced-HR from Morgan Stanley. www.pave.com 🚑 Nomad Health, a New York-based health care staffing marketplace, raised $105m in equity and debt funding. Adams Street Partners and Icon Ventures co-led the equity, and were joined by HealthQuest Capital Polaris Partners, .406 Ventures, AlleyCorp and RRE Ventures. Debt came from JPMorgan and Trinity Capital. http://axios.link/NLRA • Gloat, a New York-based career development platform, raised $90m in Series B funding. Generation Investment Management led, and was joined by Accel, Eight Roads Ventures, Intel Capital and Lumir Ventures. www.gloat.com • Front, an SF-based communication hub for customer relationships, raised $65m in Series D funding at a $1.7b valuation. Salesforce Ventures and Battery Ventures co-led, and were joined by PagerDuty CEO Jennifer Tejada and insiders Sequoia Capital, Threshold Ventures and Uncork Capital. www.front.com • Speechmatics, a U.K.-based automated speech recognition startup, raised $62m in Series B funding. Susquehanna Growth Equity led, and was joined by AlbionVC and IQ Capital. http://axios.link/DDac 🚑 PicnicHealth, an SF-based medical data sharing startup, raised $60m in Series C funding led by B Capital Group, as first reported by Axios Pro. http://axios.link/bX0a • Kaiko, a French provider of digital assets data, raised $53m in Series B funding. Eight Roads led, and was joined by Revaia and insiders Alven, Point9, Anthemis and Underscore. http://axios.link/lAsD • Eclipse Foods, an Oakland Calif.-based -based maker of plant-based dairy foods, raised $40m in new equity and debt funding, per Axios Pro. Sozo Ventures led, and was joined by Forerunner Ventures, Initialized Capital, Gaingels and KBW Ventures. http://axios.link/ojqt 🚑 Centerline Biomedical, a Cleveland-based developer of surgical navigation tech devices, raised $33m in Series B funding. Cleveland Clinic led, and was joined by GE Healthcare, RIK Enterprises, JobsOhio, Jumpstart Ventures and G2 Group Ventures. http://axios.link/WvVn • Kangarootime, a Buffalo, N.Y.-based provider of child care management software, raised $26m in Series B funding. Education Growth Partners led, and was joined by insiders Cultivation Capital and Rise of the Rest. www.kangarootime.com 🚑 Socially Determined, a Washington, D.C.-based healthcare analytics startup focused on social risk intelligence, raised $26m in Series B funding. Questa Capital led, and was joined by insiders LRVHealth, OSF Healthcare, Ziegler Link-Age Funds and HealthWorx. www.sociallydetermined.com 🌎 Circulor, a British startup that maps supply chains for greener production, raised $25m in Series B funding. Westly Group led, and was joined by HG Ventures, Volvo Cars Technology Fund, Systemiq Capital, Jaguar Land Rover's InMotion Ventures, Future Positive Capital, BHP Ventures, Salesforce Ventures and 24Haymarket. http://axios.link/ugMk • Keyway, a New York-based commercial real estate sales platform, raised $25m in Series A funding. Camber Creek led, and was joined by Canvas Ventures, Crosscut, Montage Ventures, Thomvest and Parker89. www.whykeyway.com • Workvivo, a Cork and Boston-based employee experience app, raised $22m in Series B funding from Tiger Global. www.workvivo.com • Tenet, a fintech startup that offers EV-specific auto loans, raised $18m in seed funding, per Axios Pro. Human Capital and Giant Ventures led, and were joined by Breyer Capital, Global Founders Capital and Firstminute Capital. http://axios.link/MmlK Why it matters: The New York-based startup wants to help offset the "green premium" many consumers associate with EVs and home electrification. • Onda, a New York-based tequila seltzer brand, raised $12.5m. Aria Growth Partners led, and was joined by Clayton Christopher and 25madison. www.drinkonda.com 🚲 Bykea, a Pakistani bike ride-sharing and on-demand delivery platform, raised $10m from insiders Prosus Ventures, MEVP, Sarmayacar, Tharros and Ithaca Capital. www.bykea.com • Kogniz, a Berkeley, Calif.-based computer vision startup that's introducing a gun detection module, raised $10m. Ulu Ventures led, and was joined by super{set}, Indy Fund, K20 Fund and H. Barton Asset Management. www.kogniz.com • Veritonic, a New York-based audio research and analytics company, has raised $7.5m in Series A funding, per Axios Pro. Lavrock Ventures led, and was joined by Progress Ventures, Greycroft, Lerer Hippeau and Newark Venture Partners. http://axios.link/Wi0H • Givebutter, a Washington, D.C.-based operating system for nonprofit fundraising, raised $7m in seed funding from Ardent Venture Partners, Hyper, and individuals. www.givebutter.com • Heydey, an AI-powered research assistant, raised $6.5m in seed funding. Spark Capital led, and was joined by Abstract Ventures, the Not Boring syndicate, Ride Ventures and Spacecadet Ventures. www.heydey.xyz • AI Squared, a Washington, D.C.-based, raised $6m in seed funding. NEA led, and was joined by Ridgeline Partners. http://axios.link/zVFj • System 9, an LA-based crypto asset market-maker, raised $5.7m. Capital6 Eagle led and was joined by Kronos Asset Management, C2 Ventures, Gate Ventures and Ascendex Ventures. www.system9.io • Edge Tradeworks, a Charlotte, N.C.-based whole loan trading platform, raised an undisclosed amount of funding from FTX Ventures. www.edgetradeworks.com     A message from PwC Critical growth driver in 2022     A recent PwC survey found that 60% of C-suite executives cited digital transformation as the most important growth driver. In other words: Executives are putting money behind this priority. How is this playing out for deals in 2022? Find out in PwC's deals midyear outlook.     Private Equity Deals 🌎 Actis agreed to buy a 10% stake in listed Brazilian renewable energy company Omega Energy for around $147m. http://axios.link/95ht 🌎 Alkagen, a Buffalo, N.Y.-based specialty materials company owned by Clearlake Capital Group, acquired a control stake in Luyang, a listed Chinese maker of energy-saving materials, via a stock tender offer. www.alkagen.com • Ara Partners acquired Petainer, a London-based maker of sustainability-focused beverage packaging products, from KKR. www.petainer.com ⚽ FC Barcelona, a Spanish soccer club, has agreed in principle to sell a 10% stake in its television media rights to U.S. private equity firm Sixth Street for €205m, per Axios. 🌎 Intersect Power, an Oregon-based clean tech power plant developer, raised $750m, per Axios Pro. TPG Rise Climate led, and was joined by insiders Climate Adaptive Infrastructure and Trilantic Energy Partners North America. http://axios.link/s2Jg • Joffre Capital agreed to acquire a majority stake in Israeli gaming company Playtika (Nasdaq: PLTK) at $21 a per share from a Chinese investment group, per Axios. • Kanbrick, a Chicago-based PE firm co-led by Tracy Britt Cool (ex-Berkshire Hathaway), acquired Marine Concepts, a Kaiser, Mo.-based maker of custom boat covers. www.worldsbestboatcover.com 🚑 Lindsay Goldberg bought a majority stake in MMS Holdings, a Canton, Mich.-based contract research organization with more than 800 employees, as first reported by Axios Pro. • Smart Care, an St. Paul, Minn.-based commercial kitchen equipment repair company owned by Wind Point Partners, acquired Richmond, Va.-based Dutton Food Equipment Repair. www.smartcaresolutions.com 🚑 Walgreens Boots Alliance (Nasdaq: WBA) said it is shelving its plans to sell British pharmacy chain Boots, with Reuters reporting that suitors Apollo and TDR Capital struggled to finance a deal. Boots initially was expected to fetch around £8b.     Public Offerings ⚡ Ivanhoe Electric, a Vancouver-based minerals exploration company, raised $169m in its IPO. The company priced at the low end of its $11.75-$12.50 range, and will list in both Toronto and New York. http://axios.link/A6Vt • Weilong, a Chinese spicy snack-maker, revived a Hong Kong IPO that could raise around $500m. Backers include Hillhouse Capital, Tencent, Skycus Capital, Hosen Capital, Sequoia Capital China, Yunfeng Capital, CPE Funds Management and Oceanpine Capital. http://axios.link/uUif     SPAC Stuff • JetSynthesys, an Indian digital entertainment firm, is in talks to go public at an implied $700m valuation via BurTech Acquisition Corp. (Nasdaq: BRKH), a SPAC led by real estate and VC investor Shahal Khan, per Bloomberg. http://axios.link/8d5A Bird... TK     Liquidity Events 🚑 BC Partners is seeking a buyer for Zest Anchors, a Carlsbad, Calif.-based dental products maker that could fetch more than $1b (including debt), per Reuters. http://axios.link/pDLv • Clearlake Capital Group agreed to sell Brightly Software, a Cary, N.C.-based provider of enterprise asset management and facility operations management SaaS, to Siemens for nearly $1.56b in upfront cash and up to $300m in earnouts. http://axios.link/S2sf • Primary Group hired Perella Weinberg Partners to find a buyer for British home insurer Policy Expert, which could fetch up to £1b, per Bloomberg. http://axios.link/GAk4     More M&A ⚾ David Blitzer, co-head of Blackstone's tactical opportunities group, agreed to buy a minority stake in the Cleveland Guardians baseball club, with an option to eventually acquire a control interest. Intrigue: Blitzer usually buys into sports teams with Josh Harris (ex-Apollo), including majority ownership of both the Philadelphia 76ers and New Jersey Devils, but not this time. Perhaps that's because Harris is among those kicking tires on the Washington Nationals. Speaking of the Nationals, Carlyle Group co-founder David Rubenstein also has interest, as part of a Ted Leonsis-led group, although word is that Rubenstein remains more intrigued by the siren song of the Baltimore Orioles (which aren't for sale ... yet). • Carsales.com (ASX: CARS) will pay around US$813m to buy the 51% stake it doesn't already hold in Norfolk, Va.-based Trader Interactive, a Norfolk, Va.-based online advertising firm focused on powersports and RVs. http://axios.link/91p2 • Dye & Durham (TSX: DND) cut its C$3.2b takeover offer for Australian shareholder registry Link Administration (ASX: LNK) by 22%, or to A$4.30 per share from A$5.50 per share. Dye & Durham originally beat out Carlyle for the deal. http://axios.link/Xiv9 • Foot Locker (NYSE: FL) agreed to sell its team sales business to Dallas-based BSN Sports. www.bsnsports.com 📺 Idris Elba, the actor best known as Stringer Bell and worst known as Roland Deschain, is in talks to be among the bidders for state-owned U.K. broadcaster Channel 4, per The Sunday Times. http://axios.link/1nB1 🌎 Siemens said it will invest $450m for a minority stake in EV charging network Electrify Americ, owned by Volkswagen, at a $2.45b valuation. 🌎 SSE (LSE: SSE) and Equinor (Oslo: EQNR) agreed to buy three U.K. electricity plans from Triton Power Co., with plans to develop "low carbon" projects. http://axios.link/ttLC     Fundraising • Conversion Capital raised $122m for its second VC fund. www.conversioncapital.com • Peterson Partners of Salt Lake City raised $100m for its second search fund. http://axios.link/9H3G • Twin Bridge, a Chicago-based PE firm, raised more than $880m for its fifth flagship fund. www.twinbridgecapital.com     It's Personnel • Andrew Harris joined Tiger Infrastructure Partners as head of investor relations and ESG. He previously was with North Sky Capital. www.tigerinfrastructure.com • Lucy Li joined Luminate Capital as managing director of portfolio finance. She previously was with Meta. www.luminatecapital.com • Steve Nelson stepped down as CEO of the Institutional Limited Partners Association. He's being succeeded on an interim basis by Jennifer Choi, ILPA's managing director of industry affairs. www.ilpa.org • Alyssa Rieder (CIO at CommonSpirit Health) and Rick Slocum (CIO at Harvard Management Co.) joined the board of TIFF Investment Management. www.tiff.org • De la Rey Venter joined energy investor EIG as a managing director and as CEO of MidOcean Energy, an EIG-controlled LNG company. www.eigpartners.com 🚑 Health Enterprise Partners promoted Jessie Laurash to principal. www.hepfund.com     Final Numbers Data: Yahoo Finance; Chart: Simran Parwani/Axios Robinhood shares jumped 14% Monday on a Bloomberg report that crypto exchange FTX is considering an acquisition offer. What to know: FTX founder and CEO Sam Bankman-Fried tells Axios' Crystal Kim that "there are no active conversations with Robinhood," although that statement obviously doesn't preclude FTX from starting talks at any moment. Bankman-Fried, who last month disclosed a 7.6% personal ownership stake in Robinhood, adds: "We are excited about Robinhood's business prospects and potential ways we could partner with them, and I have always been impressed by the business that [CEO Vladimir Tenev] and his team have built."     A message from PwC 2022 key deal drivers     Want a look at the latest dealmaking trends? PwC's July 28 webcast will review: Geopolitical considerations for cross border M&A. Corporate director's guide to overseeing deals. An exploration of acquisition bias. Industry-specific implications. Tune in.   ✔️ Thanks for reading Axios Pro Rata! Please ask your friends, colleagues and big rig drivers to sign up. 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