Published: Monday, 25th May 2020
In the News
- The IPO drought caused by the arrival of the coronavirus is showing signs of abating. SelectQuote, a PE-backed provider of insurance comparison tools, raised $570 million in a debut this week and saw its stock rise 35%. - PitchBook
- Material adverse change clause in focus, a group of investors in American Express Global Business Travel sued The Carlyle Group and GIC on reneging on its deal. – BBG
- Hertz filed for bankruptcy; the latest victim of the sudden economic downturn sparked by the Covid-19 pandemic; the company has been renting cars since 1918 – CNN
- Monzo is preparing to finalize a deal that could value the banking challenger at approximately £1.25 billion. This amount is significantly lower than the £2 billion+ valuation it managed to secure, following its previous investment round, which was completed in June 2019. – FT
- JAB Holding is seeking to raise as much as €2 billion (about $2.2 billion) by floating its coffee division, JDE Peet’s – FT
- The Vision Fund lost $17.7 billion last year, writing down investments including WeWork and Uber. WeWork has seen its valuation plunge to $2.9 billion from $47 billion less than a year ago. TRD
VC showed more resilience relative to M&A and PE. The space saw second consecutive week of MoM rise in deal volume up 12% in the week of May 11 and 14% last week. Even adjusting for the Waymo $3 billion deal in the week of May 11, over $4 billion in VC capital was deployed weekly over the past three weeks.
Select VC Transactions
- Magic Leap: Developer of a virtual computing interface system closed a $350MM late stage VC deal last week with potential M&A in the talks
- Atea Pharmaceuticals: Atea’s most advanced antiviral drug candidate, AT-527, is being evaluated in a Phase 2 clinical trial in the US for the treatment of patients with moderate COVID-19 and risk factors for poor outcomes. The company raised $215MM in a Series D round led by Bain Capital
PE activities still muted after the prior week’s pickup. Last week so no billion dollar plus transactions (vs 3 the week prior) and deal volume declined. Regardless, deal volume improved MoM for the third consecutive week with last week up 16%. An outlook for recovery in PE activity is still unclear at this juncture.
Select PE Transactions
- North State Communications: The provider of telecommunication services to the Piedmont was acquired by Lumos Networks, via a financial sponsor EQT, for $240MM in a public-to-private LBO
- Cyberbit: Developer of a consolidated detection and response platform designed to protects an attack against IT, OT and IoT networks was acquired by Claridge Israel and Charlesbank Capital Partners through a $70MM LBO
M&A activities virtually grinded to a halt, trailing 4-week investments fell 15% last week after a 68% fall the week prior. Looking at MoM (-74% last week) might misrepresent the story, the pickup in April was perhaps pre-covid talks getting wrapped up in a hurry as companies look to move their attention inwards. Deal volume (73) doesn’t look as disappointing but isn’t support by capital ($1.5 billion) put to work.
Select M&A Transactions
- China Development Bank Energy: The Beijing-based company which constructs and manages photovoltaic power stations and distribute generation plants was acquired by Tianjin Quanye Bazaar for $383MM; among CDB Energy investors were Sequoia Capital China, China Everbright Group and Morgan Stanley
- RBM Assicurazione Salute: Provider of insurance services based in Preganziol, Italy was acquired by its competitor Intesa Sampaolo Vita in a transaction worth $353MM; a move to expand its regional reach
- HintMD: Developer of an aesthetic subscription platform was acquired by Revance for $180MM which Revance hopes would “streamlines the patient checkout process and provides visibility into practice analytics and trends”
Jane Phornprapha, President
David Benkert, Analyst
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