As the coronavirus razed brick-and-mortar retailers, private equity firm Sycamore Partners walked away from a $525 million pre-pandemic deal to buy a majority stake in the lingerie business of Victoria’s Secret.
Now Sycamore Partners is in early talks to acquire J.C. Penney out of bankruptcy if the department store’s negotiations with creditors fail, per Reuters. The department store chain said it plans to close 154 stores permanently and perhaps more after filing for bankruptcy protection in May.
As with Victoria’s Secret, the pandemic has only compounded the multitude of issues bogging down the retailer: J.C. Penney struggled for years with dwindling sales, massive debt, and customer defections. Now with poorly developed e-commerce operations, the coronavirus is dumping more salt on the wound. Certainly Sycamore has its work cut out—and no doubt much of its portfolio, which focuses on retail and consumer, is feeling the same pain.
It’s unclear exactly how much Sycamore would pay for a J.C. Penney deal, though the department store is also in talks with its landlords, including Brookfield Asset Management and Simon Property Group, about a deal which could include a collaboration between the three, per the report.
The news comes after Sycamore made headlines for its interesting break up with Victoria’s Secret. The buyout firm struck a deal in February, just as markets were reaching new highs, to acquire a majority of the lingerie brand from struggling retailer L Brands. But as the coronavirus worsened in late April, Sycamore sought to break the deal. L Brands filed a counter lawsuit, but eventually agreed to terminate the tie-up to avoid “costly and distracting litigation to force a partnership with Sycamore.”
A date to watch: July 15. Should J.C. Penney fail to convince enough lenders of its reorganization plans by then, the retailer will have to pursue a sale.
In case you missed it: Reddit founder and former CEO Alexis Ohanian said on Friday that he would step down from the company’s board Friday to make way for a black replacement. “It’s long overdue to do the right thing,” he said.
VENTURE DEALS
- Zuoyebang, a Chinese online tutoring startup, is in talks to raise between $600 million to $800 million at a $6.5 billion valuation, per Reuters. Existing investors include Goldman Sachs, Sequoia Capital China, Coatue Management, and GGV Capital. Read more.
- Tiki, a Vietnamese online marketplace, raised $130 million in funding led by Northstar Group. Read more.
- Fivetran, a Oakland, Calif.-based data integration startup, is in advanced talks to raise funding at a valuation above $1 billion from investors including General Catalyst and Andreessen Horowitz, per Bloomberg. Read more.
- Quaise, a Cambridge, Mass.-based energy company using millimeter wave drilling to access deep geothermal energy, raised $6 million in seed. The Engine led the round, and was joined by investors including Vinod Khosla and Collaborative Fund.
- TaxProper, a Chicago-based property tax tech company, raised $2 million in funding. Khosla Ventures led the round and was joined by investors including Global Founders Capital, and Clocktower Ventures.
- Play One Up, a Cleveland, Oh.-based e-gaming app allowing users to compete for cash, raised $3.1 million in seed funding. Three Curve Capital led the round. Read more.
PRIVATE EQUITY
- Blackstone lowered its takeover bid for NIBC, Dutch bank, by around 25% after saying the coronavirus could derail the deal. Blackstone offered 7 euros per share to just above 1 billion euros. Reggeborgh and JC Flowers back NIBC. Read more.
- A group led by Silver Lake Partners agreed to invest another 45.5 billion rupees ($602 million) in Jio Platforms, the digital and telecom arm of India’s Reliance Jio. Reliance Jio. Platforms also sold a 1.16% stake for $750 million to the Abu Dhabi Investment Authority.
- Guala Closures, an Italian bottle cap maker, rebuffed a bid to acquire a minority stake by Investindustrial. Read more.
- Groundworks Companies, backed by Cortec Group, acquired AFS Foundation & Waterproofing Specialists foundation and waterproofing contractor, an Alabama-based
- KSM Consulting, a portfolio company of Renovus Capital Partners, acquired Advocate Solutions, a Columbus, Oh.-based IT services firm. Financial terms weren't disclosed.
- Fralock, backed by Arsenal Capital Partners, acquired Career Technologies USA, a Los Angeles-based provider of engineering and manufacturing solutions. Financial terms weren't disclosed.
- Ardian invested in ProduceShop, a Swiss e-commerce platform specialized in the production and sale of indoor and outdoor furniture in Europe. Financial terms weren't disclosed.
OTHERS
- Just Eat Takeaway and Delivery Hero are both reportedly courting GrubHub, the U.S. food delivery company, per CNBC. Uber is already in talks with GrubHub over a tie-up. Read more.
- AstraZeneca (LON:AZN) has approached Gilead Sciences (NASDAQ: GILD), a U.S. biopharmaceutical rival, about a merger, per Bloomberg. Read more.
BREAKUPS, HANGUPS, AND BANKRUPTCIES
- Yatra Online, an Indian travel company, is terminating a pending merger agreement Ebix Inc., a with U.S. software firm. Ebix agreed acquire Yatra for a valuation of $337.8 million. Read more.
- LVMH is not asking to renegotiate its $16.2-billion acquisition of Tiffany & Co, the jewelry chain, per Reuters citing sources. Read more.
IPOs
- Burning Rock Biotech, a Chinese precision oncology and early cancer detection company, plans to raise $196 million in an offering 13.5 million ADSs priced between $13.50 to $15.50. Insiders also plan to purchase $79 million worth of ADSs. Northern Light Venture Capital (13.7% pre-offering), Sequoia Capital China (9.1%), and CMB International (8.8%) back the firm. It plans to list on the Nasdaq as “BNR.” Read more.
- Akouos, a Boston, Mass.-based biotech developing gene therapies for inner ear disorders, filed to raise $100 million in an IPO. 5AM Ventures (21.6% pre-offering), New Enterprise Associates(18.6%), and Pivotal bioVenture Partners (7.5%) back the firm. It plans to list on the Nasdaq as “AKUS.” Read more.
- Agora, a Shanghai and Santa Clara, Calif.-based tech company offering a platform for API development, filed for an $100 million IPO. The company posted revenue of $64.4 million and loss of $67.2 million in 2019. Morningside Venture (15.7% pre-offering), Heights Capital Management (12.8%), and Coatue (9%) back the company. It plans to list on the Nasdaq as “API.” Read more.
- ArcherDX, a Boulder, Colo.-based provider of genomic testing products for cancer, filed for an $100 million IPO. The firm posted revenue of $50.6 million and a loss of $41 million in 2019. Investors include PBM Capital’s Enzymatics, Perceptive Life Sciences, QIAGEN, and Redmile back the firm. It plans to list on the Nasdaq as “RCHR.” Read more.
- Fusion Pharmaceuticals, a Canadian biotech developing medicines for solid tumors, filed for an $100 million IPO. HealthCap (12.6% pre-offering), Adams Street Partners (12.3%), and Varian Medical Systems (11.3%) back the firm. It plans to list on the Nasdaq as “FUSN.” Read more.
- PolyPid, an Israel based maker of drugs that prevent surgical site infections, refiled for a $57.5 million IPO. The firm previously planned to raise $75 million in an IPO of 3.3 million shares priced between $21 to $24. Morris Kahn (13.8% pre-offering) backs the firm. It plans to list on the Nasdaq as “PYPD.” Read more.
- Asana, the corporate software maker, raised about $200 million in convertible debt ahead of its planned U.S. direct listing later this year, per Bloomberg. Read more.
F+FS
- Atlas Venture closed its twelfth fund at $400 million in commitments.
- Pitango Venture Capital raised $175 million for Pitango Venture 8.
PEOPLE
- L Catterton hired former TPG Capital Asia partner Scott Chen.
- TSG Consumer Partners promoted Erik Johnson and Ed Wong to managing director.
- Z Capital Group hired of Timothy Chiodo as managing director.
