Term Sheet
Jessica Mathews ... Jackson Fordyce curated the deals section of today’s newsletter.
April 25, 2022 ... 11:28 AM
TWTR no more? ... Could Elon Musk break Twitter or fix it?
Yesterday evening was a late one for Twitter’s board of directors.
The board—which includes Twitter CEO Parag Agrawal, Twitter co-founder Jack Dorsey, Inovia Capital general partner Patrick Pichette, and Silver Lake co-CEO Egon Durban, among others—was negotiating with Elon Musk into the early hours of this morning. After all, there’s a lot to talk about. Namely: Whether the TWTR ticker will be pulled from the New York Stock Exchange.
For those that need a refresher, a new SEC filing from last week revealed that Musk had secured the financing he needed to actually go through with taking Twitter private in a deal that, until recently, had seemed rather speculatory.
There was good reason to be skeptical of Musk’s intentions. If you recall, Musk notoriously tweeted four years ago that he had secured the funding needed to take Tesla private, and that he was weighing doing so. The Tweet sparked enforcement from the Securities and Exchange Commission and legal claims from investors who lost investment capital over the matter. Just recently, a federal judge had ruled that the Tweet was false.
But on Wednesday, Musk disclosed that he had really secured funding this time around. An SEC filing showed that Morgan Stanley and other banks had committed $13 billion in financing and $12.5 billion in margin loans to the deal, and that Musk had personally committed to putting down $21 billion himself for the deal—a heaping $46.5 billion in funding. All that being said, Musk does appear to have to come up with the funds to acquire the rest of Twitter’s common stock for $54.20 in cash (Shares were trading at just over $50 this morning). That means Twitter’s Board needed to seriously consider the offer.
And so, the Board was up into the wee hours of the morning doing just that, as it negotiated things like termination fees and a timeline for a potential deal, the New York Times reported. A deal could be made as early today—if it is at all. (Musk didn’t respond to their request for comment, and Twitter has said previously it was “continuing to conduct a careful, comprehensive and deliberate review to determine the course of action in the best interest of the company and all Twitter stockholders.”)
Musk acquiring Twitter and taking it private would be a rather bizarre turn of events for one of the most popular social media networks, which has struggled to consistently turn a profit since it went public nearly a decade ago. Musk, who boasts more than 83 million followers on the platform, has evolved into one of its most notorious users and has in some cases moved the direction of some of the markets, and especially cryptocurrencies, based on words he types with his thumbs. That has, of course, gotten Musk into trouble at times and sparked the ire of the SEC.
But this is all starting to feel a bit real. Musk reportedly has shared some initial ideas for what direction to take the social media giant, according to presentations shown to lenders when he was securing the funding. And you can’t help but wonder, given Musks’ proclamations over what he says is lack of free speech on the social media platform, whether he envisions something reminiscent of a Trump—er, Truth—Social at the end of this. Alternatively, Musk’s business prowess could be just what Twitter needs and help turn a lagging social media giant around.
I suppose we will find out in the near future.
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
Jackson Fordyce curated the deals section of today’s newsletter.
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CONTENT FROM BRIDGE BANK
Technology and Innovation
The Technology Banking Group at Bridge Bank provides flexible financial solutions to emerging and late stage companies across the U.S. in the technology and innovation sector and works with venture and non-venture backed companies from inception to IPO and beyond. Learn more
VENTURE DEALS
- Agility Robotics, a Corvallis, Ore.-based warehouse robot manufacturer, raised $150 million in Series B funding led by DCVC and Playground Global and was joined by investors including The Amazon Industrial Innovation Fund, MFV Partners, ITIC, Robotics Hub, Safar Partners, Sony Innovation Fund, and TDK Ventures.
- TheGuarantors, a New York-based financial and insurance solutions company for renters and landlords, raised $50 million in series C funding led by Portage Ventures and was joined by investors including Kensington Capital Partners, Arch Capital Group, Roosh Ventures, Alven, and others.
- Syllable, a Sunnyvale, Calif.-based health care automation platform, raised $40 Million in Series C funding led by TCV and was joined by investors including Oak HC/FT, Section32, and Verily.
- Wisq, a Redwood City, Calif.-based relationship building platform for employees, raised $20 million in Series A funding led by Norwest Venture Partners and was joined by investors including True Ventures and Shasta Ventures.
- Leasecake, an Orlando, Fla.-based operating system for lease and location management, raised $12 million in Series A funding led by PeakSpan Capital and was joined by investors including Las Olas Venture Capital, Branded Strategic Hospitality, and others.
- Route Reports, a London-based infrastructure data software platform for roads and rail, raised $3.25 million in seed funding from the Urban Innovation Fund, Stanford, Ubiquity Ventures, Trucks VC, and Burst Capital.
- MOONHUB, a London-based VR training platform, raised $2.6 million in seed funding led by Pi Labs and was joined by investors including Ada Ventures, 1818 Venture Capital, and other angels.
- SellX, a New York-based freelance marketplace for on-demand sales reps, raised $2 million in funding from GroundUp and State of Mind Ventures.
PRIVATE EQUITY
- Blackstone agreed to acquire PS Business Parks, a Glendale, Calif.-based real estate investment trust, for approximately $7.6 billion.
- Eagle Merchant Partners recapitalized Enviro-Master Services, a Charlotte, N.C.-based deep cleaning services company. Financial terms were not disclosed.
- Gryphon Investors acquired Ed’s Supply Company, a Nashville-based HVAC/R equipment, parts and supplies distributor. Financial terms were not disclosed.
- Outdoor Living Supply, backed by Trilantic North America, acquired Back Yard Living, an Abington, Mass.-based hardscape, paving stones, fireplaces, outdoor appliances, and outdoor lighting distributor. Financial terms were not disclosed.
- Payroc, backed by Parthenon Capital, acquired Worldnet, a Johns Creek, Ga.-based payments solution for software vendors. Financial terms were not disclosed.
EXITS
- Laundryheap acquired Laundrapp, a London-based dry cleaning and laundry services company, from Inc Retail. Financial terms were not disclosed.
- Thomson Broadcast agreed to acquire GatesAir, a Mason, Ohio-based wireless content delivery solution for radio and TV, from The Gores Group. Financial terms were not disclosed.
OTHER
- OpenSea acquired Gem, an NFT marketplace aggregator. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- KKR, a New York-based investment firm, raised $19 billion for a fund focused on private equity investments in North America.
- Tiger Infrastructure Partners, a London and New York-based private equity firm, raised $1.3 billion for its third fund focused on its portfolio companies in the digital communications, transportation, and energy sectors.
PEOPLE
- March Capital, a Santa Monica, Calif.-based venture capital firm, hired Brad Weirick as partner and general counsel. Formerly, he was with Gibson, Dunn & Crutcher.
- Mill Rock Capital, a New York-based investment firm, hired Bob Feeser as senior partner. Feeser was also named vice chairman to the firm’s portfolio company, Mill Rock Packaging Partners. Formerly, he was with WestRock.
- Stonepeak, a New York-based alternative investment firm, hired Daniel Wong as senior managing director, head of Europe. Formerly, he was with Macquarie.
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