Markross121_ No Comments

Yahoo Japan and Line set to merge

Japan’s biggest search engine and messaging app are set to merge under a deal agreed by their parent companies.

Yahoo Japan is the country’s biggest search engine, and has e-commerce and online banking subsidiaries.

Line is the country’s dominant messaging app, and is also popular in Southeast Asia and Taiwan.

Analysts say the merger will help the companies compete with Japan’s other online giants.

Yahoo Japan has long offered a diverse range of services but has lagged behind many of its competitors, said Seijiro Takeshita, from the University of Shizuoka.

“This will be a very big headache and threat to the players like NTT Docomo and Rakuten,” he said.

Big in Japan

While Google is the predominant search engine in the US and Europe, Yahoo is Japan’s most popular search engine.

More than 50 million people visit Yahoo Japan’s website every month.

Yahoo Japan is no longer linked to its US namesake, which sold its remaining stake in the company in 2018.

Line, which is owned by South Korean company Naver, has roughly 80 million users in Japan and a similar number in Southeast Asia and Taiwan.

The app itself is perhaps best known for cartoonish stickers, a feature which its competitors have also adopted.

In recent years, Yahoo Japan’s parent company, Softbank, has bet billions on primarily Asian-based tech companies.

The deal could also make it a dominant player in the payments market in Japan.

Softbank already has its own payment service PayPay.

With this deal, it will scoop up Linepay, which is used by many of its competitors.

“I think there will be a lot of game-changing issues that will go on,” said Mr Takeshita.

 

Read More- www.bbc.co.uk

Markross121_ No Comments

Virgin Galactic wins space tourism race to float on stock market

Sir Richard Branson beat Elon Musk and Jeff Bezos by listing his venture in New York.

 

Publicity-hungry billionaires must have a space venture, and here’s Sir Richard Branson’s: Virgin Galactic is now a stock market-listed company with a $2.4bn valuation. Actual space tourists won’t depart until next year, but Branson has beaten Elon Musk and Jeff Bezos in getting his business floated in New York.

Galactic, despite the whizzy-looking planes, is quite a simple financial bet. It’s a punt that multimillionaires can be persuaded in droves to part with $250,000 – the price of a ticket to ride from New Mexico to 50 miles above the Earth’s surface and back. Galactic is projecting revenues of $590m and top-line earnings of $270m in 2023, by which time it expects to have flown 3,242 passengers. Who are they all supposed to be?

The marketing pitch is that a trip on Galactic makes for a more entertaining holiday for the super-rich than a tootle around the Med on a floating gin palace. A Philip Green-style cruiser costs $500,000 a week to hire, apparently. And a private island comes in at $230,000 a week, according to Branson’s crew, who presumably have the inside track on Necker’s rental rates. Thus Galactic, according to the grim prose in the listing documents, “offers a unique value proposition relative to comparably priced ultra luxury travel and transportation experiences”.

 

Read More – www.theguardian.com

Markross121_ No Comments

These firms are keying 2019’s record rate of add-ons

Private equity firms are living in the age of the add-on.

Through the first nine months of the year, add-ons to existing portfolio companies accounted for 68% of all private equity investments in the US—the highest annual rate on record—according to PitchBook’s 3Q 2019 US PE Breakdown. With deal multiples spiking across the broader buyout market, this inorganic growth is one of the few ways left for investors to find the potential for value creation to which they’ve grown accustomed.

As with every investment trend, some firms have embraced the strategy more fully than others. In ascending order, here’s a look at the six investors who have been most active in the US add-on market during 2019, according to PitchBook data, along with a rundown of the sorts of deals they’ve been getting done:

T-5. Insight Partners—30 add-ons

Until earlier this year, Insight Partners was known as Insight Venture Partners. That’s reflective of how the firm differs from most of the other firms on this list. Instead of focusing almost exclusively on buyouts and other private equity deals, Insight operates across a much broader segment of the private investment spectrum. It’s just as well known for its venture deals (or perhaps more so) as it is for conducting control investments.

But those control investments are still a major part of its strategy. And this year, it’s led to a spate of add-ons for a number of different portfolio companies, with a seeming focus on deploying new types of software across a range of sectors.

One example is Community Brands, a creator of software for nonprofits and other well-meaning organizations, which earlier this year announced three add-ons in a single day. Another is Enverus, which changed its name from Drillinginfo in August. The developer of software and data analytics for the energy sector has been busy building out its suite of services, acquiring one company that provides maps of the Permian Basin in March and another that makes billing and revenue software for the oil sector in July.

T-5. Harvest Partners—30

Harvest Partners, a New York-based firm that’s been making private equity investments since 1981, has taken a more diverse approach to its add-on activity in 2019, with no single portfolio company dominating its dealmaking.

In recent weeks, it’s been busy with Integrity Marketing Group, a distributor of life and health insurance that Harvest bought into alongside existing backer HGGC in August. (Of note to some, surely, is the fact that the chairman of Integrity’s board is Steve Young, the NFL hall of famer who’s also a co-founder of HGGC). Integrity was already on an add-on binge before Harvest entered the picture, and it’s kept it up in the meantime, acquiring four different insurance marketing companies in October alone, per PitchBook data.

The co-investor relationship with HGGC isn’t rare for Harvest. Some of its other portfolio companies that have been busy conducting add-ons this year are also examples of Harvest investing alongside fellow firms, including recycling specialist Valet Living (which it backs along with Ares Management) and insurance brokerage Acrisure (both Blackstone and Partners Group). That likely lightens some of the sourcing, diligence and dealmaking loads.

 

Read More – www.pitchbook.com

Markross121_ No Comments

Vauxhall fears after car giants Fiat and PSA announce merger

Fiat Chrysler is to merge with Vauxhall’s owner PSA to create the world’s fourth largest car company.

The two sides say they have yet to finalise all the details, but the 50-50 merger is expected to provide significant cost savings.

That has raised concerns at Vauxhall, which employs 3,000 people in the UK, as it could be vulnerable to any restructuring.

Unions called for talks with France’s PSA, which owns Peugeot and Citroen.

Fiat Chrysler, the Italian-US business behind Jeep, Alfa Romeo, and Maserati, has been looking for a big tie-up for years, believing that consolidation in the global industry is needed to cuts costs and overcapacity, and fund investment in electric vehicles.

It has tried previously to form alliances with General Motors and Renault.

A combined Fiat Chrysler-PSA will have a market value of about $50bn (£39.9bn) with annual sales of 8.7 million vehicles. The companies said there are no plans to shut factories, but UK unions are uneasy about the impact on Vauxhall.

“Merger talks combined with Brexit uncertainty is deeply unsettling for Vauxhall’s UK workforce which is one of the most efficient in Europe,” said Unite national officer Des Quinn.

“The fact remains, merger or not, if PSA wants to use a great British brand like Vauxhall to sell cars and vans in the UK, then it has to make them here in the UK.”

 

Read More – www.bbc.co.uk

Markross121_ No Comments

Thomas Cook’s Nordic business lives on after private equity deal

A trio of investors—including two private equity firms—has teamed up to save Thomas Cook’s Nordic business a month after the British travel company suddenly declared bankruptcy, delisted its shares, ceased operations and stranded more than 150,000 customers.

European buyout firms Altor Equity Partners and TDR Capital, along with Norwegian real estate tycoon Petter Stordalen’s Strawberry Group, are slated to assume ownership of the Ving Group, as the Northern Europe unit is called. The group employs 2,300 people across charter businesses in Sweden, Norway, Denmark and Finland, along with Thomas Cook Airlines Scandinavia.

Strawberry Group and Altor will each buy 40 percent of Ving, while TDR Capital will purchase the remaining 20 percent, though no price was revealed. Following the acquisition, the investors will work to secure approximately 6 billion Swedish kronor (about $618 million) in liquidity and guarantees for the business.

Unlike the larger Thomas Cook Group, which was founded in the 1840s to serve the burgeoning British middle class, Ving has recently proved itself profitable. Some of the Ving units will declare bankruptcy in order to facilitate the redirection of all businesses to a freshly established company created by its new owners, but the company’s sale will ensure 400,000 people who have booked upcoming trips will be able to travel without issue.

“[The deal] secures the business and creates a stable foundation for future development,” Harald Mix, a partner at Altor, said in a statement.

Altor, based in Stockholm, has raised five funds since its creation in 2003. It has invested in more than 60 middle-market Northern European companies, worth a total of €8.3 billion (about $9.25 billion).

TDR Capital, founded in 2002, manages €8 billion in assets and is headquartered in London. It also focuses on mid-market companies, with a preference for growth-oriented investments.

Strawberry Group maintains 11 companies and invests primarily across the real estate, finance, hospitality and art industries. Stordalen is a Norwegian billionaire who, along with his three children, also owns the region’s largest resort chain, Nordic Choice Hotels. The brand operates 180 luxury hotels across five countries.

The buyout of Thomas Cook’s Nordic unit may be one of the more dramatic deals in recent memory, but it fits cleanly into the bigger picture of the region’s PE landscape. Nordic dealmakers such as Altor have maintained a relatively consistent slice of the European private equity pie over the past decade. As of September 30, Nordic PE deal value this year totaled about €26 billion, about 11% of overall European deal value, per PitchBook’s 3Q 2019 European PE Breakdown. Through the past decade, the Nordic region’s deals have largely hovered around that same share of the total.

 

Read More – www.pitchbook.com

Markross121_ No Comments

Flying cars’ next stopover could be on Wall Street

Flying cars may soon descend on Wall Street.

China’s EHang, a maker of autonomous and remote-piloted flying passenger vehicles, has filed for an IPO on the Nasdaq, seeking to break a barrier for its industry.

EHang is unprofitable and its revenue has been declining this year, according to its SEC filing. The move also comes amid a setback for Chinese-manufactured drones, after the Trump administration said on Wednesday that the US Department of the Interior would stop using unmanned vehicles and related technology made in China, citing national security concerns. It wasn’t immediately clear whether the department had previously been employing EHang’s technology.

Like other so-called flying-car developers such as Germany’s Lilium, EHang is positioning its one- and two-seat vehicles as a mobility answer to the traffic congestion that plagues big cities. It also is taking aim at commercial applications like grocery or parcel deliveries.

Last year saw a new high in VC capital raised by drone and aerial makers, which gathered about $460.9 million across 71 deals, according to the PitchBook Platform. Among the bigger venture rounds of late were North Carolina-based PrecisionHawk’s $75 million funding in January of last year led by ClearSky and China-based SZ DJI Technology’s $75 million deal in 2015 from Accel and other investors.

If its IPO is completed, EHang would become the first VC-backed flying passenger-vehicle startup to go public, according to PitchBook data.

Led by software engineer Huazhi Hu, EHang has raised more than $95 million in venture capital since it was founded in 2014, according to its filing, which lists GGV Capital and Zhen Partners as top shareholders with stakes of 10.8% and 7.6%, respectively. EHang is also developing unmanned drones for industrial uses.

The startup currently does flight testing under the supervision of China’s aviation authorities and has delivered 38 passenger-grade autonomous aerial vehicles for testing and training.

EHang’s losses have been growing as its sales are falling. It lost about 37.6 million Chinese yuan (around $5.3 million) in the first six months of the year, up from a loss of 26.5 million yuan in 1H 2018, according to its filing. The company’s revenue doubled in 2018 to around 66 million yuan from the previous year. Through June 30, revenue dropped to 32.4 million yuan compared with 38.4 million yuan in 1H 2018.

 

Read More – www.pitchbook.com

Markross121_ No Comments

JD Sports’ Footasylum takeover could be bad for shoppers, says CMA

The UK’s competition watchdog has said JD Sports’ £90m deal to buy its smaller rival Footasylum could result in higher prices and that it will carry out an investigation unless JD can address its concerns.

The Competition and Markets Authority (CMA) said its initial investigation found the deal could result in a “substantial lessening of competition”.

The CMA is concerned this could result in a worse deal for shoppers through higher prices, reduced choice or worsening customer service. “JD Sports must now address the concerns identified or face a further, more in-depth investigation,” it said.

Colin Raftery, a senior director at the CMA, said: “JD Sports is already by far the largest player in the growing sports fashion sector, so any deal that results in it buying up one of its closest competitors could clearly give cause for concern.

“Our investigation has shown us that JD Sports and Footasylum have been competing strongly across the UK, with a sports fashion offering that few other retailers are able to match.”

Peter Cowgill, JD Sports’ executive chair, said: “We continue to believe that Footasylum would be a positive addition to the group, bringing a differentiated customer demographic and fashion-led product range that is complementary to our existing business.

“We also believe that there will be significant operational and strategic benefits from a combination of the two businesses. Our discussions with the CMA are ongoing as we consider whether to proceed to phase two or if acceptable remedies can be agreed at this stage.”

 

Read more – www.theguardian.com

Markross121_ No Comments

WeWork has acquired more than 20 companies in the run-up to its IPO

In their endeavors to scale operations and improve their brands, VC-backed companies have turned to robust M&A activity in recent years. Taking notes from consumer-facing platforms such as Facebook and Twitter, who led the way to establish how private companies can grow from strategic acquisitions before their historic rides to the public markets, WeWork has acquired 21 startups to date, with a bulk of those investments sealed in the last three years.

The co-working giant raised nearly $1 billion in VC funding before it made its first acquisition in 2015 with Case, which provides building design and information-modeling services. And in a bid to either grow the current business or explore opportunities in other industries, WeWork is currently one of the most active VC-backed acquirers in the space.

How many of those investments were directly related to the company’s space-as-a-service offering? According to a recent PitchBook analyst note, the split of acquisitions made by WeWork related to the core business versus noncore is an estimated 60-40. Notable acquisitions that currently have little to do with WeWork’s office rental focus include Flatiron School, which offers a coding education platform and Islands Media, the developer of a messaging app for college students.

The co-working giant revealed mounting losses in its S-1 filing last month. However, its appetite to acquire startups that range from the developer an office sign-in system to a behavior-analytics platform, indicates that buying tech or venturing beyond its core business via an acquisition seems to be the preferred route for WeWork, instead of building the same thing in-house.

While mega-deals from deep-pocketed investors such as SoftBank or eye-popping valuation step-ups may have favored WeWork’s acquisition strategies so far, it’s difficult to say whether the business will continue to pick up startups at the same rate in the future, especially as it plans to seek a valuation of between $20 billion and $30 billion in its upcoming IPO, slashing its last private market valuation, according to The Wall Street Journal.

Read More – www.pitchbook.com

Markross121_ No Comments

Permira-backed TeamViewer defies European IPO drought

PE-backed software company TeamViewer has announced plans to go public on the Frankfurt Stock Exchange by the end of the year. The offering could be one of Germany’s largest listings since 2017, with the expected valuation said to be between €4 billion and €5 billion (between around $4.4 billion and $5.5 billion).

Based in the city of Göppingen, TeamViewer develops a platform for online meetings and remote desktop access that has been installed on over 2 billion devices. Last year, the company reportedly generated sales of €230 million and EBITDA of €121 million.

Permira bought the business in 2014 for a reported €870 million from GFI Software. The PE firm is anticipated to sell between 30% and 40% of its shares, according to the Financial Times, but is said to be retaining its position as a majority stakeholder. Permira was reportedly approached by Hellman & Friedman and Vista Equity Partners in 2017, with each firm offering separate bids of some $2 billion to acquire TeamViewer.

If successful, the listing bucks a trend that has seen a significant drop in European IPOs. According to data from PitchBook, public offerings on the continent are at their lowest levels in nearly a decade. So far this year, 106 European companies have gone public compared with 311 last year. What’s more, very few of the companies that debuted on the markets this year raised large amounts of cash.

Only three businesses from the continent have broken the €1 billion mark in eight months. The largest IPO came courtesy of Italian lender Nexi, which priced its shares at €9 apiece to raise more than €2 billion in April. Europe’s second-biggest listing of the year saw Volkswagen’s truck and bus unit Traton make its stock market debut at €27 per share which brought in €1.55 billion. The final company that raised at least €1 billion is Trainline, the developer of a platform offering train and bus tickets. The KKR-backed business secured £951 million (around $1.2 billion at the time) by floating in London.

Some European businesses have avoided the markets altogether or backed out of scheduled IPOs. In July, Swiss Re pulled plans to list its UK life insurance arm ReAssure, which could have given the business a market cap of up to £3.3 billion. The group cited weak demand and heightened caution as its reasons, suggesting that certain political events may play a role in IPO suspension.

Of course, Brexit gets some of the blame, especially in the UK, but political uncertainty may not be the only reason for the lackluster demand for IPOs. Considering share price performance, European businesses haven’t been the best performers when going public. Traton’s stock has pretty much been on a downward spiral since the company’s June IPO—closing Wednesday at just over €22 per share—while Nexi’s stock fell a reported 6.2% on its first day. And we all know the debacles that were the Aston Martin and Funding Circle listings.

Still, there is hope that if it is executed, TeamViewer’s public debut will fare better than some of its peers, with its profitability and the attractiveness of the software market.

 

Read more – www.pitchbook.com

Markross121_ No Comments

Which US companies had the biggest valuation jumps in 2019?

Valuation step-ups in the private market continue to be one of the crucial indicators in evaluating the overall health of the venture landscape, especially as companies raise bigger and bigger rounds and strive to meet investor expectations. In 2Q, VC-backed companies in the US pulled in more than $25 billion for the sixth consecutive quarter, and many of those rounds came with lofty valuation gains.

Through the first half of the year, valuation growth has been strong in the US, according to our latest VC Valuations Report, with late-stage valuations reaching new heights. In addition, the median early-stage valuation step-up multiples (a comparison of a company’s latest pre-money valuation to its previous round’s post-money valuation) have been on the rise since 2016, and in 1H 2019, they surpassed 2.0x for the first time in at least a decade.

Here’s a look at the VC-backed companies that have seen the biggest valuation jumps in 2019, including those with the largest valuation step-up multiples from one round to the next, as well as those that have seen the largest gains in their post-valuations. Data is sourced from the PitchBook Platform; click on the images below to see a larger version of the graphic.

Largest valuation jumps by step-up multiple

 

 

Read More – www.pitchbook.com