PitchBook
The Daily Pitch: VC, PE and M&A
October 11, 2018
Like our newsletter? The data comes from the PitchBook Platform — our data software for VC, PE and M&A
Ads
Today's Top Stories
PE adapts to the shifting dealmaking cycle
PitchBook
Through the first three quarters of 2018, PE fund managers remained quite active in the US, closing 3,501 transactions totaling $508.8 billion in aggregate value. In the latest US PE Breakdown, our research analysts unpack the drivers of this long-lived investing cycle, as well as its ramifications, producing highlights such as:
  • How investors are handling elevated median EV/EBITDA buyout multiples

  • A look at how GPs are locking in gains in a price-rich environment

  • How LPs are responding to ongoing fundraising in the current climate
read it now
 
Share:   Email    LinkedIn    Tweeter    Facebook
A look at six of SoftBank's highest-profile investments this year
WeWork's New York headquarters
SoftBank kicked off 2018 by becoming the biggest shareholder in Uber, and it may close out the year with a major WeWork deal.

Now more than ever, SoftBank's $100 billion Vision Fund seems poised to take over the tech world, one mega-deal at a time. We've taken a look at the fund's potential investment in WeWork, its stake in Uber and four other noteworthy transactions:
keep reading
 
Share:   Email    LinkedIn    Tweeter    Facebook
How 20 big-name US VC firms invest at Series A & B
What are early-stage investors betting on the companies they back? And at what valuation? We've used data from the PitchBook Platform to create a visual look at the most prolific US VC investors in Series A and B rounds so far this year:
check out the graphic
 
Share:   Email    LinkedIn    Tweeter    Facebook
Meet the investor taking on consumer giants
Traditional venture investing comes with the short-term goal of achieving an exit. But what happens when an investor has a much further horizon in mind?

That's the question for one London-based investor using consumer behavior and new-look marketing in an effort to challenge some of the biggest companies in the world.

Meet The Craftory
Share:   Email    LinkedIn    Tweeter    Facebook
Amid add-on frenzy, Canadian firms line up $2.8B waste management deal
Canada's GFL Environmental, which was recapitalized earlier this year by BC Partners and the Ontario Teachers' Pension Plan, has agreed to purchase fellow environmental services specialist Waste Industries at an enterprise value of about $2.83 billion. The deal will mark a rapid turnaround for current Waste Industries owners HPS Investment Partners and Equity Group Investments, which partnered to buy the North Carolina-based company from Macquarie Infrastructure Partners last year.

The move comes amid a year when, in the US, at least, add-ons are more common than ever before: Through the end of 3Q, platform additions had accounted for 66% of all buyouts in the country, per PitchBook data, the highest total of any year on record.

And like GFL's pending merger with Waste Industries, several of this year's other add-ons have been of the billion-dollar variety. That includes the $21 billion purchase of Dr Pepper Snapple, as well as the $4.9 billion add-on of Cotiviti and a PE-backed merger of Arby's and Buffalo Wild Wings worth well over $2 billion.

Related read: PE is spending more than ever on take-private add-ons
Share:   Email    LinkedIn    Tweeter    Facebook
SmileDirectClub could be valued at $3B with new funding
SmileDirectClub has secured $380 million in a round that values the tooth-straightening company at more than $3 billion, per CNBC. Private equity firm Clayton, Dubilier & Rice is reportedly leading the round, with participation from Kleiner Perkins and Spark Capital.

The Nashville-based company works with orthodontists and dentists to send tooth-straightening kits straight to consumers. SmileDirectClub was valued at an estimated $275 million in 2016 when Invisalign parent company Align Technology took a 17% stake in the business.

Related read: VCs are putting their money where your mouth is—literally
Share:   Email    LinkedIn    Tweeter    Facebook
DOJ waves through $77B deal combining CVS, Aetna
The US Department of Justice has approved the combination of pharmacy chain CVS Health and insurance provider Aetna, a $77 billion move first announced late last year.

The companies successfully navigated a Medicare-related stumbling block that played a role in preventing Aetna from merging with rival Humana in a proposed $37 billion deal the company pursued before CVS came calling. In anticipation of regulatory pushback, Aetna agreed late last month to shed its Medicare Part D drug business to WellCare Health Plans—a move that would "fully resolve the Department's competition concerns," according to a DOJ statement.

The deal's approval comes a month after the DOJ greenlit the $52 billion combination of Cigna and Express Scripts, another enormous move merging an insurance provider with a pharmacy benefits manager.

Related read: What antitrust law means for mergers and acquisitions
Share:   Email    LinkedIn    Tweeter    Facebook
Ads
Recommended Reads
Companies thought fancy coffee bars and free refills would make employees happy. Instead, across the country, they're launching intra-office wars. [The Wall Street Journal]

With "weed beer" looming on the horizon, it's clear the cannabis industry is continuing its march from the black market to the stock market to the supermarket. [Bloomberg]

Amazon spent years trying to build an AI-powered tool to sort through job applications. But the company couldn't stop the machines from discriminating against women. [Reuters]

American expansion almost destroyed the Yurok people of California. With a surprising new economic program, the tribe is fighting back—and fighting climate change to boot. [The New Yorker]

Virgin Galactic continues to inch ever closer to sending its first passengers into space. [Gizmodo]
Ads
Since yesterday, the PitchBook Platform added:
254
Deals
885
People
345
Companies
2
Funds
See what our data software can do
 
Today's Headlines
  The Daily Benchmark  
  2007 Vintage Global PE Funds  
  People  
  FTV appoints new partner  
  Square's CFO is leaving to join Nextdoor  
  VC Deals  
  Chinese produce app scoops up massive round  
  Egnyte locks down $75M  
  Demisto brings in $43M Series C  
  Pitch pockets $19M Series A  
  PE Deals  
  Thoma Bravo inks $2.1B cybersecurity deal  
  Thoma Bravo takes over office software unicorn  
  BGH proposes Aussie buyout worth $1.4B  
  GCP devotes $50M to Tresata at unicorn valuation  
  Perfect Bite cooks up investment from New Water Capital  
  Portfolio Companies  
  Lyft solicits banks to lead IPO  
  Magic Leap starts shipping its headsets  
  Exits  
  Apple's $31M video editing takeover revealed  
  Fundraising  
  Lone Star nears $3B for latest fund  
  Tencent eyes $650M fund  
  Investors  
  Former KKR honcho to launch new firm  
  Corporate M&A  
  TransDigm lands $4B Esterline deal  
  Energy merger receives OK from UK  
  Capio recommends new Ramsay bid  
  Mitek rejects takeover by Elliott affiliate  
  Lotte to take stake in chemicals affiliate for $1.9B  
 
 
Ads
The Daily Benchmark
2007 Vintage Global PE Funds
Median IRR
9.73%
Top Quartile IRR Hurdle Rate
14.78%
1.49x
Median TVPI
$2.68B
Average Amount Distributed
Select top performers
Excellere Capital Fund
Industrial Growth Partners III
Vista Equity Partners Fund III
*IRR: net of fees
108 Funds in Benchmark »
Check out the latest version of PitchBook Benchmarks
Ads
People
FTV appoints new partner
San Francisco, CA | PE Growth
Growth equity firm FTV Capital has promoted Robert Anderson from principal to partner. Before joining FTV in 2010, Anderson worked at BofA Merrill Lynch, where he was an investment banking associate in the financial institutions group. At FTV, he currently sits on the board of six of the firm's portfolio companies and has helped execute various exits.
View details
 
 
Square's CFO is leaving to join Nextdoor
San Francisco, CA | Social Software
Nextdoor has hired Sarah Friar, who's been the CFO of online payments company Square since 2012, as its new chief executive. Nextdoor is a provider of social networks for neighborhoods that's raised nearly $300 million from VC investors including Benchmark and Kleiner Perkins. The company was valued at $1.5 billion with a $75 million funding in the beginning of this year.
View details
 
 
Ads
VC Deals
Chinese produce app scoops up massive round
Platform Software | Beijing, China | Late Stage
Tiger Global and Hillhouse Capital have led a round totaling at least $600 million for Meicai, per Bloomberg. The company provides a platform for farmers in China to sell their vegetables directly to restaurants. The new round reportedly values Meicai at $7 billion, up from the estimated $2.8 billion valuation it reached in January.
Select Existing Investors:
Genesis Capital, GGV Capital, China Media Capital
View round
 
View similar companies »
 
Egnyte locks down $75M
Business Software | Mountain View, CA | Series E
Content platform provider Egnyte has revealed a $75 million investment from Goldman Sachs. Founded in 2007, the SaaS company helps users transition infrastructure to the cloud and provides services related to secure content collaboration and data protection. Egnyte had previously raised more than $60 million from the likes of Kleiner Perkins and GV, reaching a valuation of $145 million in 2015.
View round
 
View 7 competitors »
 
Demisto brings in $43M Series C
Network Management Software | Cupertino, CA | Series C
Greylock has led a $43 million funding round for Demisto, which offers a machine learning-powered incident response platform to help security teams manage threats. The startup was valued at $75 million last year with a $20 million fundraise.
Additional Investors:
Accel, ClearSky Security
View round
 
View 1 competitors »
 
Pitch pockets $19M Series A
Business Software | Berlin, Germany | Series A
Software startup Pitch has raised $19 million in a round led by Index Ventures and BlueYard. Index partner Neil Rimer has joined the company's board. Pitch is developing a platform for presentations and content collaboration.
View round
 
View similar companies »
 
Ads
PE Deals
Thoma Bravo inks $2.1B cybersecurity deal
Network Management Software | Redwood Shores, CA | Public-to-Private Buyout
Thoma Bravo has agreed to acquire cybersecurity provider Imperva for $55.75 per share in cash, or about $2.1 billion, marking a nearly 30% premium to Imperva's closing share price Tuesday. Imperva will have a 45-day "go shop" period to pursue better offers. With offices in the US and Israel, the company offers data and application security services for both cloud and on-premises software.
Advisors:
Fenwick & West (legal), Kirkland & Ellis (legal), Qatalyst Partners (financial)
View deal
 
View 2 competitors »
 
Thoma Bravo takes over office software unicorn
Financial Software | San Mateo, CA | Buyout
Thoma Bravo has completed its purchase of a majority stake in Apttus, a provider of business software that helps manage revenue and commercial relationship processes. Valued at an estimated $1.86 billion last year with a $55 million VC round, Apttus had received prior backing from ICONIQ Capital, K1 Capital, Premji Invest and Salesforce Ventures.
Lender:
Deutsche Bank
Advisors:
Cooley (legal), Kirkland & Ellis (legal), Goldman Sachs (financial)
View deal
 
View 4 competitors »
 
BGH proposes Aussie buyout worth $1.4B
Education Services | Perth, Australia
A consortium including BGH Capital has offered to purchase educational services provider Navitas at a valuation of A$1.97 billion (about $1.4 billion), with the proposed price of A$5.50 per share representing a 26% premium to the company's closing stock price on Tuesday. The Melbourne-based BGH, which is led by alumni of TPG Capital and Macquarie Capital, closed its debut fund on A$2.6 billion earlier this year.
View deal
 
View 2 competitors »
 
GCP devotes $50M to Tresata at unicorn valuation
IT Services | Charlotte, NC | PE Growth
GCP Capital Partners has invested $50 million in Tresata, valuing the developer of analytics software at $1 billion and marking the first institutional investment in the company. Tresata was founded in 2011 and raised a $750,000 seed round a year later at a valuation of $15.75 million.
View deal
 
View similar companies »
 
Perfect Bite cooks up investment from New Water Capital
Food Products | Glendale, CA | PE Growth
New Water Capital has announced a growth investment in The Perfect Bite Company, a developer and manufacturer of frozen foods for grocery stores, airlines and other hospitality companies. The investment is New Water's second deal in the frozen foods sector; it backed Pegasus Foods earlier this year.
View deal
 
View similar companies »
 
Ads
Portfolio Companies
Lyft solicits banks to lead IPO
Application Software | San Francisco, CA
A few weeks after news emerged that JPMorgan Chase was in talks to lead Lyft's upcoming public offering, the ridehailing company has officially asked banks to submit underwriting pitches, per Bloomberg. Lyft is likely to conduct an IPO next year, as is its main rival, Uber. If the companies do go public, their offerings will be some of the most valuable VC-backed IPOs of the last decade.
View details
 
View 8 competitors »
 
Magic Leap starts shipping its headsets
Electronics | Plantation, FL
Magic Leap, an AR company that's making mixed-reality headsets, is now shipping its product throughout the contiguous US. The company was founded in 2011 and has drawn some skepticism from critics because it didn't release a product for so many years. Despite that, Magic Leap has raised billions of dollars in VC funding and reached a valuation of $6.4 billion earlier this year, making it one of the most valuable VC-backed companies in the US.
View details
 
View 3 competitors »
 
Exits
Apple's $31M video editing takeover revealed
Automation Software | Copenhagen, Denmark | Corporate Acquisition
Apple acquired image and video processing company Spektral at the end of last year for some 200 million Danish kroner (about $31 million), according to Danish business publication Børsen. The startup uses machine learning to create AR products and other visual effects. Spektral's prior backers include AMP Ventures and SEED Capital.
View details
 
View similar companies »
 
Fundraising
Lone Star nears $3B for latest fund
Hamilton, Bermuda | Buyout
Lone Star Funds has raised about $2.9 billion toward a $6 billion target for the firm's 11th flagship private equity fund, according to an SEC filing. Established in 1995, Lone Star invests in real estate, credit and the financial sector. The firm closed its previous flagship fund on $5.6 billion in 2016.
View fund
 
View 180 investments »
 
Tencent eyes $650M fund
Shenzhen, China | Venture Capital
The venture capital arm of internet giant Tencent is in talks to raise $650 million or more for a new fund, according to a Bloomberg report. The funds would reportedly be used for companies that are already in the investor's portfolio, which includes Snap, Tesla and Spotify.
View details
 
View 250 investments »
 
Investors
Former KKR honcho to launch new firm
PE/Buyout
Alexander Navab, who spent nearly 25 years at KKR before leaving the firm last year, has decided to form a new buyout group with backing from the Petershill secondaries division of Goldman Sachs, per Reuters. Navab, who was most recently head of the Americas private equity unit at KKR, left last summer after KKR announced that Joseph Bae and Scott Nuttall would take over as co-presidents and co-COOs.
View details
 
View 1,201 investments »
 
Corporate M&A
TransDigm lands $4B Esterline deal
Aerospace & Defense | Bellevue, WA | Corporate Acquisition
TransDigm has agreed to acquire aerospace and defense industry supplier Esterline Technologies for $122.50 per share, representing a 38% premium to Esterline's closing price on October 9 and valuing the company at $4 billion. Esterline is expected to generate $2 billion in revenue for 2018. Shares of TransDigm (NYSE: TDG) fell 3% Wednesday, while Esterline (NYSE: ESL) soared 30%.
View details
 
View similar companies »
 
Energy merger receives OK from UK
Energy Marketing | Sunderland, UK | Merger
The UK's Competition and Markets Authority has approved the combination of the retail energy businesses owned by SSE and npower in a deal worth £7 billion (about $9.2 billion). Innogy, the parent company of npower, will own 34.4% of the combined business, with SSE owning the rest. The deal was announced last November.
View details
 
View similar companies »
 
Capio recommends new Ramsay bid
Hospitals | Gothenburg, Sweden | Corporate Acquisition
The board of healthcare provider Capio has recommended its shareholders accept an improved takeover offer of 8.2 billion Swedish kronor (about $900 million) that France's Ramsay Générale de Santé submitted earlier this week. The bid of 58 kronor per share represents a 20% premium to the company's closing stock price on October 5. A deal would result in Capio dropping its agreement to sell its French business to Vivalto Santé.
View details
 
View similar companies »
 
Mitek rejects takeover by Elliott affiliate
Computers, Parts and Peripherals | San Diego, CA
US fintech specialist Mitek Systems has snubbed an approach from ASG Technologies, a software business backed by activist investor Elliott Management and KKR, per Reuters. Mitek provides financial institutions and payments companies AI and machine learning tools for identity verification during digital transactions, including mobile check deposits. Shares of Mitek (NASDAQ: MITK) soared some 17% Wednesday for a market cap of nearly $293 million.
View details
 
View similar companies »
 
Lotte to take stake in chemicals affiliate for $1.9B
Specialty Chemicals | Seoul, South Korea | Secondary Transaction
South Korean conglomerate Lotte has agreed to take a 23% stake in affiliate Lotte Chemical, according to Reuters. The 2.2 trillion won (about $1.9 billion) deal follows the release of the group's chairman, Shin Dong-Bin, from prison for his involvement in South Korean President Park Geun-Hye's corruption scandal in 2016.
View details
 
View similar companies »
 
Chart of the Day
"The US VC asset class saw another quarter of strong activity as capital invested trended toward a new high. 3Q capital investment topped $27.9 billion, pushing YTD 2018 deal value to $84.3 billion—a record amount of capital raised with a quarter remaining."

Source: 3Q 2018 PitchBook-NVCA Venture Monitor