On December 19th, a Republican-controlled Congress narrowly passed a tax reform bill. This bill represents the most significant tax overhaul since 1986 and has profound implications for the private equity industry. Although this administration is often chastised for being overly friendly to private equity barons, the reality of this bill is far more complicated.
Global asset manager Blackstone Group has just reached a deal to acquire China-based cosmetics packaging firm Shya Hsin Packaging on November 10th, 2017. The deal is reportedly worth around $800 to $900 million, although Blackstone is still lining up loan financing of up to $600 million to fund the transaction.
Locus Robotics Corporation, a robotics company that manufactures technology for e-commerce warehouses and distributors, has raised $25 million in a Series B funding round led by Scale Venture Partners. The 17 year-old VC firm based in northern Silicon Valley has approximately $1 billion in AUM and focuses on early-stage internet, cloud computing, and SaaS startups. The recent round of funding indicates support for the hardware industry behind warehouse and manufacturing automation technology.
A trailblazer in the Venture Capital space, CEO Chamath Palihapitiya of Social Capital is changing the way tech venture capitalists support innovation. His first big move came in September of this year when he created Social Capital Hedosophia Holdings, a massive blank check company. The process for tech companies valued at more than $1 billion (the so called “unicorns” of the world) to go public is extremely long and painful. Companies must work with investment banks to conduct an investor road show, incurring significant fees along the way. Social Capital Hedosophia can offer much faster liquidity for investors and employees, trimming the process of “going public” to roughly 60 to 90 days.
19th October 2017 was the deadline Unilever gave to private equity bidders to submit first offers for its spreads business, which comprises margarine brands such as Country Crock, Flora, and I Can’t Believe It’s Not Butter. Buyers can bid for the entire business unit or for regional packages. The sale is led by Morgan Stanley and Goldman Sachs and is expected to be executed by the end of 2017.
On October 19th, Lyft announced a new round of $1 billion in financing led by CapitalG, Alphabet’s growth-focused venture capital fund. The capital raise increases Lyft’s valuation by just under 50%, from $6.9 billion to $11 billion. The investment is accompanied by CapitalG partner David Lawee assuming a seat on the Board of Directors at the startup. Taking advantage of competitor Uber Technologies’ recent corporate troubles, Lyft’s new valuation is their most recent strategic play in steps toward expansion and increased market share.
On October 24, 2017, Toshiba Corporation held an extraordinary shareholder’s meeting where Toshiba’s shareholders approved the Share Purchase Agreement (SPA). Toshiba had agreed to enter this agreement with K.K. Pangea, a special acquisition company formed to buy all shares of Toshiba’s wholly owned subsidiary, Toshiba Memory Corporation (TMC). K.K. Pangea (Pangea) consists of a consortium of companies, most notably Bain Capital Private Equity, Apple, Dell Technologies Capital, and SK Hynix. This deal, which may or may not close, has several issues that could prevent success. The deal’s value ultimately comes out to an estimated $18 billion.
San Francisco-based private equity firm Hellman & Friedman LLC announced on September 25th that it had agreed to acquire Nets A/S for 33.07 billion Danish Krone, or $5.3 billion. Hellman & Friedman is joining Singapore wealth fund GIC Pte Ltd. and funds managed by advent International Corp. and Bain Capital Ltd. (the latter two are already major shareholders in Nets). Hellman & Friedman has offered 165 Danish Krone per share for the company, which represents a 27% premium. Investors owning 46% of Nets have agreed to tender their shares.
On October 18th of this year, Bahrain-based investment firm Investcorp announced that it would acquire Kee Safety Ltd (“Kee Safety”) from Dunedin LLP and LDC for an enterprise value of $370 million. Investcorp is a leading global manager of alternative investments, which the company offers to its high net-worth clients regularly. Moreover, Investcorp is mid-market private equity firm, investing primarily in both North America and Europe.
While most people are aware of Amazon’s global market leadership position in the e-commerce sector, few are attuned to the growing potential of local e-commerce startups in developing economies. With Softbank’s recent $2.5 billion investment in Flipkart, a leading e-retailer in India, investor confidence in these local startups is bound to increase.
Just a month after becoming the world’s largest independent bottler for retailers with their $1.25 billion acquisition of Cott Corp, Netherlands-based soda bottler Refresco Group has been taken over. Concluding a six-month pursuit, which involved a declined offer three months ago, Refresco was sold. The buyers are PAI Partners, a French private equity group, and British Columbia Investment Management (bcIMC).