AMERICAS
Incodema, a portfolio company of private equity firm CORE Industrial Partners, agreed to acquire Majestic Metals, a provider of precision sheet metal fabrication services. Financial terms were not disclosed.
“Majestic Metals is a natural fit for us as they have similar precision metal fabrication capabilities including cutting, forming, and welding, but at a larger part scale. Furthermore, Majestic Metals brings incremental abilities to the group, including state-of-the-art automation, powder coating and screen printing. I look forward to working closely with the Roberts brothers and the Majestic Metals team in the future," Carey Chen, Incodema CEO.
Majestic Metals is advised by Class VI Partners and BackBay Communications. Core Industrial Partners is advised by Winston & Strawn.
Merchant banking division of Goldman Sachs led the $65m round in Echelon Fitness, a maker of exercise machines. North Castle Partners, the existing investor in Echelon, also participated in the round.
“We are excited about their omnichannel and multi-product offering that enables a broader reach to retailers and consumers alike,” Stephen Kerns, Goldman Sachs Merchant Banking Member.
Echelon was advised by Piper Sandler.
Franchise Group, an operator of franchised and franchisable businesses, completed the acquisition of FFO Home, a regional retailer of furniture and mattresses. Over 30 FFO Home stores throughout the Midwest were rebranded to American Freight Furniture, Mattress, Appliance. Financial terms were not disclosed.
“We are excited about the FFO Home acquisition. Our ability to use this acquisition to quickly enter many new markets where we do not currently have a presence, and preserve local jobs that might have otherwise been lost had FFO Home stores permanently closed, made this a win-win for American Freight and these communities we will now have the opportunity to serve,” Will Powell, American Freight CEO and President.
Franchise Group was advised by Fishman PR.
Latin America becomes China’s favorite region for M&A.
Latin America emerged as a region where Chinese companies pursuing acquisitions abroad were able to make some corporate alliances work.
Abroad acquisitions by Chinese firms are directing for their fourth continuous yearly decline, with a $31.1bn tally - the lowest since 2007. Transactions targeting Latin America totaled $7.7bn, more than Europe and North America combined, Bloomberg reported.
Chinese suitors have met increased scrutiny in Europe and the US this year as the pandemic left their strategic industries vulnerable for hostile takeovers, adding to national security concerns. Buyers from Asia’s largest economy then turned their focus to Latin America.
In Europe, Chinese buyers only announced $3.5bn worth of acquisitions this year, a 71% plunge from a year ago. They’ve found Spain and Portugal among the few markets that still welcome their investments.
Lemonade lockup expiry may pressure stock after year’s best IPO.
The best performing listing of 2020 is poised to enter the upcoming year with increased volatility following the expiration of insider selling restrictions.
Lemonade, an insurance provider, is trading more than 350% above its July 1 initial public offering price, the best of any 2020 debut above $300m. However, about 44m additional shares, which are mostly held by insiders, will be eligible for sale on Tuesday, Bloomberg reported.
This will be the second lockup expiration for the remaining two thirds of shares subject to the lockup agreement after the first expiry in November.
Musk says it’s impossible to take Tesla private and considers new IPO.
Billionaire Elon Musk said it’s impossible to take Tesla private now even though he would have liked to spend more time on innovation, Bloomberg reported.
“Tesla public company duties are a much bigger factor, but going private is impossible now. Engineering, design & general company operations absorb vast majority of my mind & are the fundamental limitation on doing more,” Elon Musk, Tesla CEO.
Musk also said Starlink, SpaceX’s budding space-internet business, would likely be a candidate in his group to go public once its revenue growth becomes reasonably predictable. A listing would give investors a chance to buy into one of the most profitable operations within the closely held company.
EMEA
Orix, a Japanese financial conglomerate, agreed to acquire an 80% stake in Elawan Energy, a global renewable energy company, from Acek Renewables, a renewable energy business, for $965m. The transaction is expected to close in the second quarter of 2021, subject to receipt of regulatory approvals and satisfaction of customary closing conditions.
“We welcome Elawan to the ORIX Group and this acquisition is an important milestone to accelerate our corporate strategy of contributing to build a sustainable society. Elawan is an ideal platform to further support the growth of ORIX renewable energy business globally," Hidetake Takahashi, ORIX Head of Energy and Eco-Services Business Headquarters.
REE Automotive in talks for a $3-4bn SPAC merger.
REE Automotive, an Israeli developer of modular platforms for electric vehicles, is negotiating to go public via SPAC at a valuation of between $3-4bn.
The negotiations have been ongoing for the past three months and were initially expected to be completed by the end of the year, although are now likely to be extended into January 2021.
Should the merger go ahead, REE is expected to obtain access to the SPAC’s funds and to another several hundred of millions of dollars in PIPE investments. Shares of REE have been traded in the secondary market this year at a company valuation of $1.1bn, far less than it is expected to be valued in the SPAC merger.
Wolseley is targeted in a £600m buyout deal. (FS)
A private equity firm connected to Sir Terry Leahy is in talks to acquire Wolseley, which supplies plumbing equipment to the construction industry.
Clayton Dubilier & Rice is one of three buyout firms toughing it out in the final stages of an auction for Wolseley UK. Other potential acquirers include HIG Capital and Epiris, a London-based independent private equity fund manager.
Wolseley is supposed to change the owner for between £400m and £600m as part of any deal with a private equity house.
APAC
Delivery Hero, a provider of online food ordering services, received conditional approval for the $4bn acquisition of Woowa, a designer and developer of software applications. The condition is the divestiture of South Korean food delivery app Yogiyo within six months.
"We are deeply saddened by the required condition to divest Delivery Hero's subsidiary. We... will work hard to ensure that this transition is as smooth as possible for all impacted employees," Niklas Östberg, Delivery Hero Chief Executive and Co-Founder.
Woowa is advised by Goldman Sachs, JP Morgan, Kim & Chang, Latham & Watkins, Shook Lin & Bok, Sullivan & Cromwell and Yulchon. Delivery Hero is advised by Morgan Stanley, Bae Kim & Lee, Kim & Chang, Sullivan & Cromwell, WongPartnership and Kekst CNC.
Alibaba Group led a $1.6bn Series E+ round in Zuoyebang, a Chinese online learning app. Other participants included returning investors Tiger Global Management, SoftBank Vision Fund, Sequoia Capital China and FountainVest Partners.
Zuoyebang’s latest announcement comes just six months after it announced a $750m Series E led by Tiger Global and FountainVest. The latest financing brings Zuoyebang’s total raised so far to $2.93bn.
Investment firms 5Y Capital, Hillhouse Capital, and Capital Today led the $150m round in Horizon Robotics Technology, a provider of AI chips to robots and smart mobility and autonomous driving solutions.
The $150m that Horizon raised is the first close of the intended $700m Series C funding round. With the proceeds, Horizon hopes to increase the pace of commercialization and the development of its automotive chips and autonomous driving solutions coupled with an intent to build an open ecosystem for industry partners.
China Datang nears $400m deal for Indonesian power projects.
China Datang is close to reaching an agreement to acquire a majority stake in three thermal power plants in Indonesia for c. $400m, according to Bloomberg.
The state-backed energy company is currently in advanced talks with PT Dian Swastatika Sentosa, which is engaged in the supply of electricity, trading, real estate and infrastructure, and construction services, for a 75% stake in its three independent thermal power plants with a total capacity of 600 megawatts.
India's Anupam Rasayan to raise $103m from IPO.
Anupam Rasayan, an Indian agrochemicals manufacturer, has filed a draft red herring prospectus with the Securities Exchange Board of India to raise $103m within an initial public offering.
Proceeds will be used to pay off $7.5m in debt. As of September, the company had a total debt of $117m.
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