Today’s column didn’t quite come together in time, so just a few very quick notes to kick off your Monday.
• Deal data: Global M&A has topped the $2 trillion mark for 2016, but is still off 26% from last year’s pace, per Thomson Reuters. The U.S. figure is even weaker (comparatively), off 33% at just under $900 billion year-to-date. The only geographic areas with up arrows are Japan, India and the Middle East.
Private equity-backed deals are off 29% globally ($283 billion total) and a whopping 41% in the U.S. ($127 billion total). Global corporate-grade debt issuance is up 18% (down 3% in U.S.), while global high-yield debt issuance is down 30% (-26% in U.S.).
Separately, Thomson Reuters also reports that leveraged buyouts are featuring larger and larger equity checks. It’s LPC unit says that equity comprised 45.7% of typical Q2 LBO’s, which is the highest such contribution since Q1 2012. For comparison’s sake, the highest average annual equity contributions recorded by LPC was 50.3% in 2009, while the “Golden Age” of 2007 was closer to 30%. No wonder deal volume is down…
• Simple equation: One of the things Mylan CEO Heather Bresch kept saying last week during the EpiPen price kerfuffle was just how darn hard it is to succeed in pharma, due to the current regulatory environment for U.S. healthcare. Which made me wonder why we’re still on track to see well over 1,000 pharma startups raise venture capital this year (at pretty heady average valuations). And then I noticed that Mylan generated around $850 million of net income last year, and $1.8 billion of EBITDA. So I stopped wondering.
• Speaking of which… Pharma unicorn Moderna Therapeutics is raising upwards of $600 million in new equity funding, per an SEC filing. More importantly, it already has secured $451 million of it. For the uninitiated on Moderna, here’s a piece I wrote about the company last year, when it secured a $3 billion valuation.
• Down south: Mexico and the U.S. seem to be moving in opposite directions when it comes to private equity taxation. Bloomberg reports that Mexico is considering several proposals to decrease taxes on local VC and private equity investors, including a cut on share sales via IPO from 35% (i.e., ordinary income) to 10% (capital gains) and a change that could let funds offset carried interest taxes with investment losses.
THE BIG DEAL
• E.L.F. Beauty, an Oakland, Calif.-based cosmetics company, has filed for a $100 million IPO. It plans to trade on the NYSE under ticker symbol ELF, with J.P. Morgan and Morgan Stanley serving as lead underwriters. The company reports $1.1 million of net income on $97 million in revenue for the first half of 2016, compared to $2.7 million of net income on $75 million of revenue for the year-earlier period. TPG Growth holds a 56.8% ownership stake, based on an early purchase from TSG Consumer Partners for an undisclosed amount. www.elfcosmetics.com
VENTURE CAPITAL DEALS
• Mitra Biotech, an India-based developer of personalized cancer treatments, has raised $27.4 million in Series B funding. Sequoia India and Sands Capital Ventures co-led the round, and were joined by RA Capital Management and return backers Accel and Tata Capital Innovations Fund. Part of the proceeds were used to cash out Series A backers Karnataka Information Technology Venture Capital Fund and India Innovation Fund.
• Mediamorph, a New York-based provider of media and entertainment data management and analytics, has raised $21.2 million in Series C funding. Advance Vixeid Partners led the round, and was joined by return backers Liberty Global Ventures and Smedvig Capital. Also participating were Lee Equity Partners senior advisors like Bob Wright (former CEO of NBC Universal) and Barry Baker (former president/COO of USA Networks). www.mediamorph.com
• Helix Sleep, a New York-based mattress startup, has raised $7.35 million in Series A funding. Backers include Double J Capital, Simon Venture Group, Western Technology Investments, Great Oaks VC and individual angels. Read more.
• Vroozi, a Los Angeles-based provider of B2B procurement solutions, has raised $4 million in growth equity funding led by Ally Holdings. http://www.vroozi.com
• Rheo, a San Francisco-based personalized video channel, has raised $2.3 million in seed funding. Accomplice led the round, and was joined by Pathbreaker Ventures, Social Capital, Social Starts and Lars Rasmussen. www.rheo.tv
• HappyFresh, an on-demand grocery delivery service focused on Southeast Asia, has raised an undisclosed amount of Series B funding. Samena Capital (Dubai) led the round, and was joined by return backers Sinar Mas Digital Ventures and Vertex Ventures. The company also announced that it has withdrawn from both Taiwan and the Philippines, but will continue to operate in Indonesia, Malaysia and Thailand. Read more.
PRIVATE EQUITY DEALS
• The Blackstone Group is nearing a $1.8 billion agreement to purchase the U.S. real estate assets of Swedish pension manager Alecta, according to Bloomberg. Read more.
• Brixey & Meyer Capital has acquired Stillwater Technologies, a Troy, Ohio-based provider of precision machining and resistance welding solutions to multiple industries, from Bill and Wanda Lukens. No financial terms were disclosed. www.stlwtr.com
• CVC Capital Partners has agreed to acquire a 15% stake in Indonesian hospital operator PT Siloam International Hospitals for around $166 million from majority owner PT Lippo Karawaci. Read more.
• MBK Partners has abandoned plans to acquire Japanese golf course operator Accordia Golf Co. (Tokyo: 2131) after a recent spike in the company’s stock price, according to Reuters. The deal would have valued Accordia at upwards of $1.6 billion. Read more.
• Quadrant Private Equity has acquired WorldMark, an Australian provider of auto add-on products like window tint to car dealerships, from Navis Capital Partners. No financial terms were disclosed. Read more.
• TDR Capital has hired Goldman Sachs and ABG Sundal Collier to find a buyer for Norwegian cruise operator Hurtigruten ASA, according to Bloomberg. Possible suitors reportedly include Bain Capital, EQT Partners and TPG Capital. Hurtigruten is generating around €135 million in annual EBITDA. Read more.
• TriStyle Mode GmbH, a German direct fashion retailer owned by Equistone Partners Europe, has acquired Long Tall Sally, a UK-based long/tall women’s apparel maker. No financial terms were disclosed. The seller was Amery Capital. www.longtallsally.com
• Apptio, a Bellevue, Wash.-based provider of cloud-based technology business management software, has filed for a $75 million IPO. It plans to trade on the Nasdaq under ticker symbol APTI, with Goldman Sachs listed as left lead underwriter. The company reports a $14.9 million net loss on nearly $76 million in revenue for the first half of 2016, compared to an $18.4 million net loss on $62 million in revenue for the year-earlier period. Apptio has raised around $136 million in total VC funding from firms like Greylock Partners (16.5% pre-IPO stake), Madrona Venture Group (16.6%), Shasta Ventures (9.5%), Janus Capital, Hillman Co., T. Rowe Price Group and Andreessen Horowitz. www.apptio.com
• Digicel Group, a Bermuda-based provider of mobile services in the Caribbean, has withdrawn registration for an IPO that designed to raise upwards of $1.9 billion, due to “current unfavorable market conditions.” The offering originally planned to sell 124 million shares at between $13 and $16 per share in October 2015, but the pricing was indefinitely postponed. It had planned to list on the NYSE, with J.P. Morgan listed as left lead underwriter. www.digicelgroup.com
• Gridsum Holding Inc., a provider of data analysis software for multinational and domestic enterprises and government agencies in China., has filed for a $75 million IPO. It plans to trade on the Nasdaq under ticker symbol GSUM, with Goldman Sachs (Asia) and Citigroup serving as lead underwriters. The company reports a $4.5 million net loss on around $22 million of revenue for the first half of 2016. Shareholders include Steamboat Ventures and Nokia Growth Partners. www.gridsum.com
• QSR Brands, a Malaysian operator of KFC and Pizza Hut franchises is planning a local IPO early next year that could raise more than $400 million, according to IFR. Backers include CVC Capital Partners. Read more.
• Cogentrix Solar Holdings, a Charlotte, N.-based portfolio company of The Carlyle Group, has agreed to sell a Colorado solar power plant to Korea Electric Power Corp. for an undisclosed amount. KEPCO and Carlyle also signed a separate power company development partnership. Read more.
• Nutanix, a San Jose, Calif.-based provider of datacenter infrastructure solutions, has agreed to acquire PernixData and has completed an acquisition of Calm.io. No financial terms were disclosed for either deal. PernixData is a San Jose, Calif.-based maker of software that aggregates all the flash-based storage that comes with servers into one sharable pool. Its backers include Menlo Ventures, Kleiner Perkins and Lightspeed Venture Partners. Calm.io is an India-based data center automation company that had been backed by Sequoia Capital India. Nutanix, which filed for an IPO last December, has raised over $300 million in VC funding from firms like Lightspeed. Read more.
• D.E. Shaw reportedly is considering an offer for bankrupt SunEdison Inc.’s controlling stake in TerraForm Power Inc. (Nasdaq: TERP). Read more.
• Deutsche Bank has agreed to sell its Argentina business to Buenos Aries-based Banco Comafi. No financial terms were disclosed. Read more.
• GIC, a Singapore sovereign wealth fund, has agreed to acquire a 7.73% stake in Vietnamese lender Vietcombank. The deal reportedly is valued south of $400 million. Read more.
• Innogy SE, a renewable energy unit of German utility RWE, has agreed to acquire British solar power plant builder Belectric. No financial terms were disclosed. Read more.
FIRMS & FUNDS
• The Carlyle Group is considering a total withdrawal from the hedge fund business, according to the FT. Read more.
• Ocean Link, a new private equity firm focused on the travel and tourism sector in China, has formed a strategic partnership with General Atlantic and Ctrip (Nasdaq: CTRP). Read more.
• True Ventures has closed its fifth fund with $310 million in capital commitments. www.trueventures.com