Axios Pro Rata: Looking back and ahead — Driven IPO — Deal or no deal?

Top of the Morning | Wednesday, December 23, 2020

Open in app View in browser   Presented By Northern Trust   Pro Rata By Dan Primack ·Dec 23, 2020     Top of the Morning Illustration: Annelise Capossela/Axios   This is the final Axios Pro Rata newsletter of 2020, a year that I had naively looked forward to. So yesterday I asked some investors to complete two sentences, one about the year that was and one about the year to come. Below is a sampling of replies: Something I learned in 2020 about my job/industry was... ? "Speed has become more valuable than capital." — Henri Pierre-Jacques, Harlem Capital "Capitalism has lost its luster and we need a brand reboot." — Chamath Palihapitiya, Social Capital "Venture capital, once a fringe asset class, is now becoming central to a lot of investment portfolios." — Greg Bohlen, Union Grove Venture Partners "Zoom board meetings can be just as effective as in-person meetings (but also I really miss people IRL)." — Kara Nortman, Upfront Ventures "Moving out of Silicon Valley was no longer contrarian." — Joe Lonsdale, 8VC "I was reminded that the technology industry really is the world's greatest industry. Beyond allowing us to seamless transition to remote work, barely missing a beat, many years of future demand were pulled forward across many companies, as digital adoption became an imperative and not a luxury." — Jay Hoag, TCV "A team can somehow become closer together amidst trying circumstances despite the physical distance caused by the pandemic." — Gregg Lemkau, Goldman Sachs The thing I expect to happen in 2021, which almost no one else expects to happen, is... ? "Direct listings with capital raises will turn out to be a headline without a story." — Lise Buyer, Class V Group "Through AI and new 3D algorithms, computers are beginning to understand, detect, index and search our three-dimensional world. This will have great impacts on transportation, supply chain, and manufacturing. 2021 will be recognized as the year it took off like 1994 was seen for the Internet." — Mark Kvamme, Drive Capital "By year-end, both NYC and SF will see a rise in new startups as the cost to operate declines ... the New Roaring 20's begins and people seek out NYC and SF as places to let loose and have fun again." — Brian Hirsch, Tribeca Venture Partners "SPAC-ocalypse … but SPACs do catalyze normal IPOs with no lockups for several hot companies." — Bryan Roberts, Venrock "The private equity industry will invest billions in technology and data companies and yet, as an industry, we will invest virtually nothing in technology and data to improve our own industry and franchises." — Erik Hirsch, Hamilton Lane "Remote work won't be the preferred choice for a meaningful segment of the tech workforce." — Hunter Walk, Homebrew "A record number of Black founders raise Series A and B rounds as funds are held accountable for their promises of mid-2020 to truly change and diversify their portfolios." — Sarah Kunst, Cleo Capital     The BFD Illustration: Aïda Amer/Axios   Driven Brands, a Charlotte-based auto services franchisor owned by Roark Capital, filed for an IPO. Why it's the BFD: It's one of the country's largest auto services groups, with more than 4,000 locations under such brands as Maaco and Meineke. Details: Driven plans to list on the Nasdaq (DRVN), is using Morgan Stanley as lead manager and reports $3.2 million of net income on $616 million in revenue for the first nine months of 2020. It lists $100 million as an IPO target, but that's likely a placeholder figure. Video flashback: Uh oh, better get Maaco The bottom line: Bloomberg reported last year that Roark was considering a sale process with a $2 billion asking price. Since then, the company's top-line performance has improved significantly, although profits shrunk on rising debt interest payments. It also completed a major acquisition in the car wash space.     Venture Capital Deals • Lalamove, a Chinese on-demand logistics company, raised $515 million in Series E funding. Sequoia Capital China led, and was joined by fellow insiders Hillhouse Capital and Shunwei Capital. http://axios.link/EOL3 • WeRide, a Chinese autonomous vehicle developer, raised $200 million from Chinese bus-maker Yutong. http://axios.link/W30d ⚡Octopus, a British renewable energy supplier, raised £150 million at a £1.5 billion post-money valuation from Tokyo Gas (T: 9531), as part of a joint venture agreement. http://axios.link/L2tk 🚑 Neomorph, a San Diego-based biotech focused on protein degradation, raised $109 million in Series A funding led by founding investor Deerfield Management Co. http://axios.link/kDTC • DISCO, an Austin, Texas-based provider of SaaS for law firms, raised $60 million in new equity funding from Georgian Partners, LiveOak Venture Partners, Bessemer Venture Partners, the Stephens Group and Breyer Capital. It also secured $40 million in debt from Comerica. www.csdisco.com • Jane, a Lehi, Utah-based online marketplace for boutique sellers, raised $40 million from Tritium Partners. www.jane.com • Boardable, an Indianapolis-based provider of nonprofit board management software, raised $8 million. Base10 Partners led, and was joined by High Alpha. http://axios.link/0uz5     A message from Northern Trust How to relocate with taxes in mind     Relocation is top-of-mind for many people this year because of potential tax savings and remote working becoming the norm. But before relocating, consider the broader impact of the move and understand the requirements to establish residency. The tax factors to consider.     Private Equity Deals • The Blackstone Group agreed to acquire a majority stake in Liftoff, a Redwood City, Calif.-based mobile app marketing optimization platform that had raised around $9 million from firms like Akkadian Ventures and Baseline Ventures. www.liftoff.io • Calera Capital acquired FitzMark, an Indianapolis-based provider of freight logistics. www.fitzmark.com • H.I.G. Capital invested in KM² Solutions, a New York-based business process outsourcing company with operations in Latin America and the Caribbean. www.km2solutions.com • Incodema Holdings, a Newark, N.Y.-based portfolio company of Core Industrial Partners, acquired Majestic Metals, a Denver-based provider of precision sheet metal fabrication services. www.incodema.com • Jet Parts Engineering, a Seattle-based portfolio company of Vance Street Capital, acquired AeroSpares, an Orlando, Fla.-based maker of aerospace aftermarket replacement components. www.jetpartsengineering.com • PAI Partners entered exclusive negotiations to acquire a majority stake in MyFlower, a French flower and gifting platform, from LFPI and Montefiore Investment. www.interflora.fr 🚑 Revelstoke Capital Partners invested around $111 million for a minority equity interest in Fast Pace Health, a Waynesboro, Tenn.-based operator of 127 rural healthcare clinics. www.fastpacehealth.com 🚑 Symplr, a Houston-based portfolio company of Clearlake Capital Group, acquired TractManager, a Dallas-based provider of health care contract lifecycle management software, from Arsenal Capital Partners. www.tractmanager.com • Trinity Hunt Partners acquired VA Forensics, a Carlsbad, Calif.-based provider of biomechanical and accident reconstruction forensic engineering services. www.vaforensics.com     Public Offerings • The SEC yesterday approved a rule change that will allow companies doing direct listings on the New York Stock Exchange to simultaneously raise primary capital. http://axios.link/xX0T • Daimler of Germany is prepping a late 2021 IPO for its trucks unit, per Handelsblatt. http://axios.link/zm4w • Dream Finders Homes, a Jacksonville, Fla.-based homebuilder, filed for a $100 million IPO. It plans to list on the Nasdaq (DFH) with BofA as lead underwriter, and reports $51 million of pro forma revenue on $844 million in revenue for the first nine months of 2020. http://axios.link/gwSJ     SPAC Stuff • Dyal Capital Partners, a Neuberger Berman unit that buys passive stakes in alternative asset managers, and direct lender Owl Rock Capital Partners agreed to be taken private via reverse merger with Altimar Acquisition Corp. (NYSE: ATACU), a SPAC formed by HPS Investment Partners. The combined company would be initially valued at around $12.5 billion. http://axios.link/kOTv • 7GC & Co. Holdings, a tech-focused SPAC formed by 7GC and Hennessy Capital, raised $200 million in an upsized IPO. http://axios.link/pWwX 🚑 Athlon Acquisition, a health/wellness SPAC formed by Causeway Media Partners, filed for a $200 million IPO. http://axios.link/xa9k • Authentic Equity Acquisition, a consumer business-focused SPAC formed by Authentic Equity, filed for a $200 million IPO. http://axios.link/gXor • CF Acquisition IV, a SPAC formed by Cantor Fitzgerald, raised $450 million in its IPO. http://axios.link/WKRs • Empowerment & Inclusion Capital I, a SPAC led by former congressman and current PNC exec Harold Ford, filed for a $200 million IPO. http://axios.link/ycsk • Environmental Impact Acquisition, a sustainability-focused SPAC formed by Canaccord, filed for a $150 million IPO. http://axios.link/Ghu7 🚑 Healthcare Services Acquisition, a SPAC led by David Blair (ex-CEO of Catalyst Health Solutions), raised $288 million in its IPO. http://axios.link/cb7E • Hennessy Capital Investment V, a SPAC targeting a U.S. sustainable industrial tech/infrastructure company, filed for a $250 million IPO. http://axios.link/CCXL • OCA Acquisition Corp., a SPAC formed by Olympus Capital, filed for a $130 million IPO. http://axios.link/jQbE • Powered Brands, a consumer-focused SPAC formed by Greycroft and Clique Brands CEO Katherine Power, filed for a $200 million IPO. http://axios.link/glQW • Provident Acquisition, a SPAC targeting a tech business in Southeast Asia, filed for a $200 million IPO. http://axios.link/rX10 🚑 Viveon Health Acquisition, a SPAC targeting the U.S. orthopedic and spine market, raised $175 million in its IPO. http://axios.link/7pNV     Liquidity Events • NEC (Tokyo: 6701) completed its previously announced $2.2 billion purchase of Swiss banking software firm Avaloq Group from Warburg Pincus. http://axios.link/85t4 • New Mountain Capital agreed to sell Sparta Systems, a New Jersey-based provider of quality management software to life sciences and consumer products companies, to Honeywell (NYSE: HON) for $1.3 billion in cash. http://axios.link/eYPE • The Riverside Company sold Sunrise Windows, a Temperance, Mich.-based maker of custom vinyl windows, to MI Windows and Doors. www.sunrisewindows.com • WarnerMedia, a unit of AT&T (NYSE: T), acquired You.i TV, a Canadian provider of cross-platform development tools for media companies. You.i TV had raised around $50 million from firms like WarnerMedia, Causeway Media Partners, Vistara Capital Partners and Kayne Anderson. http://axios.link/Kuzz     More M&A 🚑 Columbia Care, a listed medical cannabis company, acquired Green Leaf Medical, a Frederick, Md.-based rival, for $240 million. http://axios.link/Ug8r • Great American Outdoors Group, parent company of Bass Pro Shops and Cabela's, agreed to buy Utah-based outdoor sporting goods retailer Sportsman's Warehouse (Nasdaq: SPWH) for $785 million, or $18 per share. http://axios.link/XG7e • HeidelbergCement of Germany hired Morgan Stanley to find a buyer for its U.S. assets, which could fetch around $1.5 billion, per Bloomberg. http://axios.link/piYK • IAC said that it plans to spin out video platform Vimeo into an independent, publicly traded company. http://axios.link/kWzA • L'Oreal (Paris: OR) agreed to buy Japanese skincare company Takami, which generated around $60 million in 2019 revenue. http://axios.link/waSW     Fundraising • Liquid 2 Ventures, led by Joe Montana (yes, that one), is raising $100 million for its third fund, per an SEC filing. www.liquid2.vc     It's Personnel • Eric Doyal joined fund placement firm Briarwood Partners as a managing partner, per his LinkedIn. He previously was with Rock Hill Capital. • 645 Ventures of New York promoted Alessio Fanelli, Meha Patel and Guerin Schwarberg to vice presidents. www.645ventures.com • TSG Consumer Partners promoted Beth Pickens and Irena Blind to managing directors, Adam Hemmer to principal and Alex Foley and Leo Zhang to VPs. www.tsgconsumer.com     Final Numbers Data: Axios Research; Chart: Andrew Witherspoon/Axios President Trump last night threw a barbed monkey wrench into the economic stimulus plans, calling the $900 billion spending package "disgraceful" and demanding that the direct checks be increased from $600 to $2,000. This comes after Trump sat on the sidelines during recent negotiations, although Treasury Sec. Steven Mnuchin had hailed the bipartisan compromise deal, which passed both houses of Congress with veto-proof majorities. It's unclear what happens next. Trump could veto and be overridden. He could pocket veto the bill (i.e., just let it sit on his desk), but that also would shut the government since the stimulus is tied to the omnibus. It's also possible that Mitch McConnell will give in on the $2,000 checks — an approach favored by Democrats — although it would represent a major GOP policy shift.     A message from Northern Trust The wealth planning trifecta     The trifecta of low interest rates, high exemption amounts and uncertain tax policy future make it a good time to revisit your wealth plan to prepare for an uncertain future. Learn how to take advantage of this window of opportunity from Northern Trust's The Wealth Planning Trifecta report.   🎉 And that's a wrap on Axios Pro Rata 2020. Huge thanks for reading this year. For riding with us to raise over $1.5 million for worthy causes. For sharing pics of your kids doing projects while locked down. For the podcast listens. For sending replies that make me laugh and think. We'll return on January 4, 2021. Until then, please be safe and have a happy holidays!   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: