Acquisitions Are Up

While many of us Americans feel helpless watching our 401(k) plans diminish in value, there are plenty of dealmakers out there, licking their chops as the marketplace of private and public companies presents a fire sale on some of the best companies out there.

Zendesk, the SaaS company for sales and customer service teams, turned down a private equity deal for $17BN earlier this year, citing a solid customer base and strong revenues that the company believed would generate a better offer. Hindsight is 20/20, as it turns out it should have taken that deal. Last month, the company agreed to a $10.2BN acquisition offer from a crew of private equity firms. The market has shifted, and now a good deal turns out to be better than a great one that never materializes. The company will go private once again in Q4.

 

Acquisition Uptick
The data back up this maxim. Acquisitions are up, and a slew of hungry PE investors and larger companies are looking for that next meal.

Syros Pharmaceuticals, which has been publicly traded since 2016, bought Tyme Inc., a biotech company creating better quality-of-life treatments for late-stage cancer patients. The deal clocked in at $60MM alongside a $130MM PIPE deal.

FTX Exchange, the crypto exchange for traders, has been on a buying spree. It is reportedly purchasing BlockFi for the clearance price of $25MM, a 99% discount from its previous valuation.

Debt Financing
Traditional lenders are limiting debt lending to acquirers, and private equity investors are switching instead to raising private debt.

Companies raising cash are also turning to private debt financing in place of expensive VC money. Blackthorne.io, an event management and payment processing company based in New York, recently raised a combined $16MM in equity and debt financing ($1MM and $15MM, respectively) to enable employee growth and business expansion.

Coding Dojo raised $10MM in debt financing from VCs to expand its edtech reach. Spot Insurance brought in $33MM in venture debt funding for its “spot” insurance solutions for people with active (think skateboarding) lifestyles.

For more acquisitions and debt funding rounds, head to our database.