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Boris Johnson unveils £350m to fuel decarbonisation of industry

Boris Johnson has unveiled £350m in funding to help industry to reduce carbon emissions in a bid to speed up progress towards the UK’s 2050 net zero goal.

The funding will go to a range of businesses and projects working across industries such as heavy industry, construction, space and transport.

Johnson said that the coronavirus pandemic meant that it was “more important than ever that we keep up the pace of change to fuel a green, sustainable recovery.

“The UK now has a huge opportunity to cement its place at the vanguard of green innovation, setting an example worldwide while growing the economy and creating new jobs’.

Of the funding, £139m will go to heavy industry to support the transition from natural gas to hydrogen, as well as scaling up the development of carbon capture and storage (CCUS) technologies.

The two technologies have both long been earmarked as critical to the transition to a green economy, with 40 businesses last month writing to chancellor Rishi Sunak in support of a country-wide hydrogen strategy.

In addition, £149m will go towards developing the use of innovative materials, such as so-called “green steel” across industry, while £26m will be put towards supporting low-carbon building techniques.

Read More – www.cityam.com

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2020: A year of increased M&A activity and the role of brand

Despite geopolitical fears and the spectre of a global economic slowdown organisations are continuing to look to M&A to achieve growth. According to the Global Capital Confidence Barometer as we move into a new decade 52 per cent of organisations are planning to actively pursue M&A over the next 12 months. In particular tech, B2B and luxury have all been earmarked as sectors with over average potential for activity.

However, the stats show that between 50 and 85 per cent of the deals will fail. With the average transaction value set at around $52 million; the stakes are high. However, for the 15-50 per cent of M&A deals that are successful the rewards far outweigh the risk.

Cultural difference is the most vaunted reason for a failed merger. The dissonance between two organisations can be extremely divisive and the inability to align them from the offset can quickly and easily set in the rot which eventually turns gangrenous and ultimately becomes terminal. Even the most seemingly trivial of differences can be a powerful indicator that all is not right with a deal.

 

Read More – www.bdaily.co.uk

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Private equity is dominating the NBA in 2020

Rich guys like to own professional sports teams. Private equity produces a lot of rich guys. So it’s little surprise that buyout billionaires have been snapping up NBA franchises for the past two decades.

In recent years, a few of those franchises have achieved unprecedented success. In fact, private equity tycoons have turned the league’s Eastern Conference into their own personal playground.

During the 2018-2019 season, the four top finishers in the East were all controlled by private equity pros, including the NBA champion Toronto Raptors. As the 2019-2020 season enters this weekend’s All-Star break, those same teams occupy four of the top five spots in the conference.

And all four ownership groups have at least one common factor in how they’ve achieved recent success, a trait that could tie back to their pasts in overseeing portfolio companies: Instead of meddling in every small decision, they’ve developed reputations for hiring the best talent available and getting out of the way.

PE’s basketball jones

The Milwaukee Bucks have been the NBA’s dominant team so far this season, sitting in first place in the East with a sparkling 46-8 record. The Bucks are co-owned by Wes Edens, a co-founder of Fortress Investment, and Marc Lasry, a co-founder of Avenue Capital, who teamed to acquire the franchise in 2014.

At second place in the East sit the defending champion Raptors. The Toronto franchise is owned by a group called Maple Leaf Sports & Entertainment, which is in turn partially owned by Larry Tanenbaum, chairman of Kilmer Capital Partners and the longtime CEO of Kilmer Van Nostrand. Tanenbaum represents the Raptors on the NBA’s Board of Governors (the league now eschews the word “owner”), making him the team’s most powerful dignitary.
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The Boston Celtics occupy third place in the East standings. Since 2002, the legendary franchise has been owned by an investor group led by Wyc Grousbeck (formerly a partner at Highland Capital Partners) that also includes Steve Pagliuca, a co-chairman at Bain Capital. Grousbeck is the son of Irv Grousbeck, a professor at Stanford Graduate School of Business.

And fifth place in the East is currently filled by the Philadelphia 76ers, who in 2011 were acquired by a wide-ranging group of investors that includes Josh Harris, a co-founder of Apollo Global Management, and David Blitzer, global head of tactical opportunities at Blackstone. Harris is the team’s principal owner.

 

Read More – www.pitchbook.com

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Coronavirus deals latest blow to China’s struggling VC landscape

China’s once-booming venture capital scene is grappling with its latest setback as the coronavirus outbreak derails fundraising for companies in the region.

In the past month and a half, venture capital activity in China—both in terms of the number of deals and the money raised by startups—has fallen more than 60% compared with the same period last year, according to PitchBook data.

“It’s very difficult to be able to get things done,” said Drew Bernstein, co-managing partner at Marcum BP, an accounting firm that advises Chinese companies. “It would be hard for me to imagine a business in China that’s not affected by this.”

From the start of the year through Feb. 12, venture capital activity in China fell from 340 to 144 deals, and the capital raised declined from $4.3 billion to $1.4 billion, when compared to the same period last year. The drop-off was particularly pronounced following the Lunar New Year in late January.

 

Even before the outbreak, the venture landscape in China suffered from waning confidence in the domestic startup scene. After years of red-hot funding activity, investors were shaken by the poor post-IPO performance of several tech companies, including electric car maker NIO and smartphone manufacturer Xiaomi.

“The valuations of a lot of companies got cut” after going public, said Ted Chan, a data analyst at PitchBook. “Investors were seeing that happen and got more careful about investing.”

Past outbreaks, such as SARS in 2003 and the 2016 Zika virus, both weighed on public and private investment activity. In the case of Zika, the amount raised through venture deals in South and Central America declined by a third, according to PitchBook data.

 

Read More – www.pitchbook.com

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Just Eat and Takeaway.com cleared to form £6.2bn food courier giant

Further growth on the menu as Dutch firm’s boss hails merger as ‘dream combination’

 

Shareholders in Just Eat have given the green light to a £6.2bn merger with Dutch food delivery firm Takeaway.com, which will create one of the largest food delivery groups in the world.

Takeaway.com said Just Eat shareholders holding 80.4% of the company’s voting rights had accepted its all-share merger offer, which it upped to an offer worth 916p a share just before Christmas. As a result of a fall in Takeaway.com’s share price since then, it was worth 902p a share on Friday.

Confirmation of the deal is a blow to rival Prosus, the Amsterdam-listed offshoot of the South African tech group Naspers, which tried to forestall the merger agreement with a rival offer. Before Christmas it raised its all-cash bid by £400m to £5.5bn, or 800p a share, having previously made 740p- and 710p-per-share bids.

 

Jitse Groen, the chief executive of Takeaway.com, said: “Just Eat/Takeaway.com is a dream combination and I am very much looking forward to leading the company for many years to come.”

The Takeaway.com deal is expected to be declared unconditional by 31 January 2020 and finalised by the end of February.

Takeaway.com’s offer hands Just Eat shareholders a 58% stake in the merged company. It has also said it will sell Just Eat’s stake in the Brazilian delivery company iFood, which Just Eat owns in partnership with Prosus, and return half the proceeds to shareholders.

Launched by five Danish entrepreneurs in 2001, Just Eat originally linked customers to restaurants that handled their own deliveries. It has recently branched out into handling deliveries, responding to competition from Uber Eats and Deliveroo.

The merger marks the latest phase of consolidation in the takeaway delivery market, which expanded by nearly 20% in the UK, excluding Northern Ireland, last year, according to analysts Kantar. The deal comes after Just Eat bought the UK firm HungryHouse and Takeaway.com acquired Delivery Hero’s German business in 2018.

 

Read More – www.theguardian.com

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Jupiter agrees £370m deal to buy Merian Global Investors

Deal will create second-biggest retail asset management group in Britain, managing £65bn.

 

The investment manager Jupiter is to pay £370m to buy Merian Global Investors in a deal that will create the second-largest retail asset management group in the UK.

The enlarged group will have £65bn under management, but some analysts said they regarded the deal as an essentially defensive merger of two struggling businesses.

Jupiter has been affected by significant outflows in recent months, losing £4.5bn of client funds during 2019 following the departure of a “star” European fund manager, Alex Darwall, who left to set up his own business. The trading update accompanying the news of the deal revealed a slide in Jupiter’s profits to £163m for 2019, compared with £183m the year before.

 

The market initially welcomed the relatively low price paid for Merian, better known under its pre-2018 name Old Mutual Global Investors (OMGI).

The private equity firm TA Associates backed a £600m buyout of OMGI in December 2017, subsequently renaming it Merian, but it sagged as funds flowed out of the business. At the time of the purchase in 2017, the OMGI/Merian business had £25.7bn in funds under management, but the figure has since fallen to £22bn.

Jonathan Miller of the investment research agency Morningstar said: “It is somewhat surprising that after Merian’s own change of direction backed by private equity around 18 months ago, they’re set to be acquired. The deal is symptomatic of the pressure active managers are finding themselves under.

 

“Merian was valued just shy of £600m in June 2018, but Jupiter is set to pay £370m for the acquisition, with £29m in net debt and Merian shareholders becoming a 17% shareholder of the enlarged entity.”

The acquisition is the latest deal by Andrew Formica, the Australian who led the merger between fund managers Henderson and Janus in 2016 then joined Jupiter as chief executive in early 2019.

Formica promised that shareholders would benefit from substantial cost “synergies” and that the deal will be “highly earnings accretive”. He added: “With this acquisition, our business will benefit from an increased capacity to attract, develop and retain high-quality talent, backed by further investment in our platform and technology.”

 

Read More – www.theguardian.com

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PE mega-funds have higher floors and lower ceilings than smaller vehicles

Private equity mega-funds (of at least $5 billion) have tended to outperform smaller funds over the past 20 years. That shouldn’t come as a surprise, as mega-funds are only raised by firms that have outperformed over time.

At least for private equity, the biggest firms are almost by definition some of the best firms, at least perception-wise, since they had to justify their growth to LPs over several funds. Not every top-performing firm opts to grow that large—but the ones that do go on to raise mega-funds give themselves good odds of maintaining performance as they grow.

Our recent PitchBook analyst note dives into performance metrics for $5 billion-plus PE funds and how they differ from the rest of the market. TVPI figures—which reflect a fund’s investment multiple—suggest that mega-funds hit more doubles than the rest of the market, but also fewer home runs. For example, across several vintage buckets, mega-funds have a higher chance than smaller-sized funds to achieve a TVPI of at least 1.5x. That’s great news for larger LPs looking for consistently positive returns.

 

Read more – www.pitchbook.com

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Robots are ready to sort our trash, but will VCs be interested in the messy world of recycling?

You finish a greasy-yet-satisfying lunch at the cafeteria, pick up the items from the table and walk to the trash and recycling bins. Like most well-intentioned people, you face a familiar dilemma. Used napkins. Leftover ketchup packets. A foam container. Wait, there’s food stuck on it. Where do they all go? Is anyone watching? Help.

We’ve all been there. And our three-second plight is part of an expensive problem that’s only piling up by the minute.

China took the world by surprise last year when it started banning imports on dozens of kinds of solid waste, including some plastics and other recyclables. The maximum acceptable contamination level in plastics and fiber also dropped to 0.5% in China, making it nearly impossible for recycling facilities around the world to quickly process sizable volumes of scrap.

The impact of those changes has been devastating, and for many private waste management companies in the US, plastic recycling is no longer a viable market. Like any other business, a recycling company needs to efficiently use available resources and have a healthy bottom line. The soaring cost of recycling has forced many local governments across the US and recycling processors to send increasing amounts of waste to landfills or incinerators.

Even in this dire situation, many environmentalists and entrepreneurs believe there’s a silver lining. China’s bold move has forced countries throughout the world to acknowledge green issues and push innovative recycling ideas toward tangible and long-term investments.

While humans could single-handedly choke our planet with waste, we may need some help to clean up the mess. Enter the robots.

One of the crucial steps in contributing toward a circular economy begins with correctly classifying what can and cannot be recycled. Even something as straightforward as a coffee cup could be complicated during disposal. Its light-weight plastic lid, paper cup and cardboard holder may appear to be recyclable components, but rules might be different for a sorting facility if it’s made of virgin tree fiber rather than paper or if it’s contaminated with leftover whipped cream.

Charles Yhap, who co-founded CleanRobotics in 2015, realized there might be a better way to sort trash than to expect high levels of awareness, accuracy and motivation from human beings—especially when recycling laws can be confusing and vary from county to county. The Pittsburgh-based company has developed an AI-powered robot called TrashBot that helps automate the separation process at the point of disposal.

“The idea was born out of frustration, of being confronted with an array of trash bins,” Yhap told PitchBook. “Waste management processes are either dirty, dull or dangerous, and it makes sense to target robotics in this industry.”

TrashBot uses cameras and sensors to scan discarded items from everyday waste—and that doesn’t mean it conveniently tosses an unfinished can of soda straight to the bin bound for the landfill. These robots can “swallow” excess liquids. CleanRobotics is focusing on high-traffic facilities such as airports, convention centers and schools, but one challenge is its technology requires waste to be thrown away one item at a time with a short delay in between. The company is backed by investors including GAN Ventures, SOSV and Innovation Works.

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The most active investors in European unicorns

Swiss fintech startup Numbrs has received $40 million in funding from private investors, pushing its valuation above $1 billion. Launched in 2014, the Zurich-based company partners with banks and insurers such as Santander, Allianz and Barclays and has over €10 billion (around $11.1 billion) in managed assets. Numbrs allows users to manage all their bank accounts under one app, which has more than 2 million downloads. It brought in $27 million from investors including Israeli billionaire Marius Nacht in May 2018 and has reportedly raised nearly $200 million in total financing to date.

Numbrs is the ninth startup to join this year’s European unicorn class—a third of which are fintech businesses—per the PitchBook Platform. German payments provider N26 joined the ranks in January with a $300 million Series D that valued the company at $2.7 billion and in May, its London-based peer Checkout.com landed $230 million in its first fundraise at a valuation of $2 billion. Other newly minted unicorns reportedly include healthtech startup Doctolib and OneTrust, the developer of a privacy management platform.

While Europe still has relatively few billion-dollar businesses compared to the US and Asia, its unicorn club has witnessed significant growth in the past few years. The continent currently has 33 unicorns, including over 20 that hit the $1 billion valuation in the last two years.

The rise in European unicorns is proof that VCs are increasingly willing to invest their money in startups from the continent, but a few names are cropping up more than others.

Using PitchBook data, we’ve compiled a list of the 10 most active investors in European companies valued at more than $1 billion, with their deal counts since the start of 2011 in parentheses.

1. Accel (16)
2. Index Ventures (15)
3. Passion Capital (8)
T-4. General Atlantic (7)
T-4. DST Global (7)
T-4. Valar Ventures (7)
T-7. DN Capital (6)
T-7. HV Holtzbrinck Ventures (6)
T-7. SoftBank (6)
T-7. Insight Partners (6)

Read More – www.pitchbook.com

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Heartland Express acquires Millis Transfer

Heartland Express announces that it acquired dry van truckload carrier Millis Transfer for ~$150M.

The company says it’s impressed with the high quality of the Millis Transfer driving professionals and the organization’s safety profile.

Heartland plans to fund the purchase price and pay off the assumed debt with existing cash.  Looking ahead, Heartland expects to end the year with approximately $50M to $60M in cash, zero debt and approximately $90M available under its revolving line of credit.

Read More – www.seekingalpha.com