Record year: US-VC fundraising hit $329.6bn, reveals new report

BY Fraser Tennant

Toppling previous records, US-venture capital (VC) fundraising hit £329.6bn in 2021, despite ongoing pandemic disruption and growing adversities such as supply chain issues and labour shortages, according to a new report by Pitchbook.

The ‘Q4 2021 PitchBook-NVCA Venture Monitor’ also reveals that total deal count increased substantially in 2021 to an estimated 17,054 deals – up from 12,173 in 2020.

Additionally, investment activity for seed and angel and early and late-stage companies all hit records, as did investment activity for companies receiving their first equity round of institutional financing and companies raising VC mega-rounds ($100m or more).

According to the report, partly what makes 2021’s VC industry activity so remarkable is that the coronavirus (COVID-19) pandemic disruption continued to have an impact despite the widespread availability of vaccines and national vaccination programmes.

“2021 began with a bang in VC activity and ended in spectacular fashion, producing another record-setting year,” states the report. “While many were bullish on the industry at the start of the year, possibly no one predicted how remarkable the year would prove to be.”

2021 VC highlights include: (i) US VC-backed companies collected nearly $330bn in 2021 – approximately double the previous record of $166.6bn raised in 2020; (ii) non-traditional investors such as corporate VC funds, hedge funds, private equity (PE) firms and sovereign wealth funds participated in nearly 77 percent of total annual deal value; and (iii) exits were a huge part of 2021's story, with more than $774bn in annual exit value created by VC-backed companies that either went public or were acquired.

Looking to 2022, the report forecast that non-traditional investor interest and momentum will likely continue, in part due to the continued strong outperformance of VC portfolios.

“At the same time, traditional VC investors are flush with capital to deploy,” concludes the report. “For entrepreneurs there is a deeper and wider pool of capital sources available to fund and scale the next generation of innovative companies.”

Report: Q4 2021 PitchBook-NVCA Venture Monitor

Aptiv acquires Wind River in $4.3bn transaction

BY Fraser Tennant

In a $4.3bn transaction which accelerates the journey toward a software-defined automotive industry, global technology company Aptiv PLC is to acquire intelligent edge software solutions provider Wind River, which is backed by private equity firm TPG Capital.

The deal is to be financed through a combination of cash and debt, and will allow Aptiv to expand into multiple high-value industries with Wind River’s world-class team and leading intelligent systems software platform.

Moreover, the combination will enable multiple end-use innovations and applications, particularly as computing and processing continue to move closer to the edge and connected devices, including vehicles, and expand in complexity and capabilities.

“The automotive industry is undergoing its largest transformation in over a century, as connected, software-defined vehicles increasingly become critical elements of the broader intelligent ecosystem,” said Kevin Clark, president and chief executive officer of Aptiv. “Fully capitalising on this opportunity requires comprehensive solutions that enable software to be developed faster, deployed seamlessly and optimised throughout the vehicle lifecycle.”

Developing safer, greener and more connected solutions that enable a more sustainable future of mobility, Aptiv has more than 180,000 employees strategically located to serve customers globally – solving the automotive industry’s toughest challenges with scalable, intelligent platforms that accelerate the transition to software-defined, electric vehicles.

“Wind River has established itself as a worldwide leader in intelligent edge software that delivers the highest levels of security, safety, reliability and performance,” said Kevin Dallas, president and chief executive of Wind River. “Combining Wind River’s industry-leading software, customer base and talent with Aptiv’s complementary technologies, global resources and scale will realise our vision of a new machine economy.”

A global leader in delivering software for mission-critical intelligent systems, Wind River software is used on over 2 billion edge devices across more than 1700 customers globally. The company generated approximately $400m in revenues in 2021.

The acquisition is expected to close mid-year 2022 and is subject to customary conditions, including receipt of applicable regulatory approvals.

“Together we will accelerate the digital transformation of our customers across industries through best-in-class intelligent systems software,” concluded Mr Dallas. “We look forward to working with the Aptiv team to reach even greater heights and provide further growth opportunities for our customers and partners.”

News: Aptiv to bulk up software offerings with $4.3 bln Wind River deal

Stryker Corp agrees $2.97bn Vocera deal

BY Richard Summerfield

Medical device manufacturer Stryker Corp has agreed to acquire Vocera Communications in a deal worth $2.97bn. The deal is expected to close in the first quarter of this year and is estimated to have a neutral impact on net earnings per diluted share in 2022, Stryker said in a statement.

Under the terms of the deal, Stryker will pay $79.25 per share for the company, for a total equity value of approximately $2.97bn and a total enterprise value of approximately $3.09bn including convertible notes. The boards of both Stryker and Vocera have unanimously approved the acquisition.

Vocera specialises in communication and workflow platforms, as well as software for healthcare providers such as hospitals, allowing for internal and patient-to-doctor communications to improve patient data sharing. The company also makes smart wearable devices for healthcare professionals as well as smartphone applications.

“This acquisition underscores our commitment and focus on our customer,” said Kevin Lobo, chair and chief executive of Stryker. “Vocera will help Stryker significantly accelerate our digital aspirations to improve the lives of caregivers and patients.”

“Today’s milestone represents an exciting opportunity for Vocera given the clear alignment of mission, goals and culture between our two organizations and our ability to drive even greater economic and clinical value for our customers,” said Brent Lang, chairman and chief executive of Vocera.

Stryker officials are said to have been attracted to Vocera’s “highly complementary and innovative portfolio” of tools to help connect caregivers and “disparate data-generating medical devices”, with an eye toward boosting patient safety and outcomes and improving provider workflows.

Specifically, Vocera’s software and hardware for remote communication complements Stryker’s Advanced Digital Healthcare tools, the company said, and will improve its efforts to help its customers reduce and prevent adverse events across the care continuum.

The deal is the latest in a number of significant multibillion health IT acquisitions. Other deals announced so far this year include Castlight Health’s merger with Vera Whole Health and Aetion’s acquisition of Replica Analytics.

News: Medical device maker Stryker to buy Vocera Communications for $2.97 bln

CBRE to acquire logistics assets for $4.9bn

BY Richard Summerfield

CBRE Investment Management, a unit of CBRE Investment, has agreed to acquire several logistics assets from Hillwood Investment Properties in a deal valued at $4.9bn.

The deal includes 33 assets in the US and 24 across Germany, Poland and the UK and will close in stages throughout 2022 and possibly into 2023. The transaction will add 28.4 million square feet to CBRE’s logistics property portfolio, the company said in a statement.

“This milestone transaction reflects our ability to leverage the strong financial capacity of our parent company to secure compelling opportunities that help to drive strategic real assets solutions for our clients,” said Chuck Leitner, chief executive of CBRE Investment Management. “Backed by a $35 billion AUM global logistics platform and a skilled team with deep domain expertise, we are positioned to be one of the world’s leading investors and operators of logistics assets.”

Approximately two-thirds of the portfolio being acquired is already built and leased. The rest is either in search of tenants or still being developed. The portfolio was appealing to CBRE because it was located in markets with large labour forces, has advanced transportation systems and is close to a large number of consumers.

Hillwood has divested a number of facilities in recent years, capitalising on the increased demand for warehouse space. In late 2020, the company sold a portfolio of 23 facilities to Stockbridge Capital Group and the National Pension Service of Korea. The transaction was valued at $2bn, the largest of its kind since the beginning of the COVID-19 pandemic at the time.

Industrial real estate made history in the third quarter of 2021 as e-commerce and other tenants grappled for limited US warehouse space. According to Transwestern, the segment logged 159 million square feet of net absorption — the amount of space newly occupied minus the amount vacated. It was the highest quarterly total since 2008. There is currently 637 million square feet of industrial warehouses under construction across the US, almost double the volume of five years ago.

CBRE Investment has more than $133bn in assets, including $35bn in industrial property across the world. CBRE has more than 100,000 employees serving clients in more than 100 countries. The company formed a global sector-specific team in June 2021 to enhance and better align its global logistics expertise.

News: CBRE unit to buy warehouses in U.S., Europe in $4.9 bln deal

Digital Realty acquires Teraco in $3.5bn deal

BY Fraser Tennant

In a strategic transaction that accelerates its pan-African expansion, global data centre solutions provider Digital Realty is to acquire data centre operator Teraco in a deal valued at $3.5bn.

The acquisition of Teraco, the largest and most densely interconnected data centre platform in Africa, immediately establishes Digital Realty as the leading colocation and interconnection provider on the high-growth African continent.

Moreover, after closing, Digital Realty will own approximately 55 percent of the total equity interests in Teraco, with the remaining 45 percent held by a consortium of existing investors, including management, Berkshire Partners LLC, Permira, van Rooyen Group, Columbia Capital, Stepstone Ventures and the Teraco Connect Trust. 

“Teraco is the industry leader in South Africa and the continent's connectivity hub,” said A. William Stein, chief executive of Digital Realty. “This investment will enhance our ability to serve customers on a global basis by adding significant regional scale with a premier, network-dense portfolio in South Africa's most strategically important metros.” 

The transaction will also advance Digital Realty’s strategy of increasing exposure to highly connected, network- and carrier-dense facilities to enhance its global coverage and connectivity capabilities. 

"We are excited to enter our next chapter by joining forces with Digital Realty to create a truly global, scaled platform serving our customers in Africa and beyond,” said Jan Hnizdo, chief executive of Teraco. “Our combined platform will be uniquely positioned to serve the full customer spectrum with the ability to support their growth around the world.”

The Teraco management team is expected to remain in place and will maintain day-to-day responsibility for operations in South Africa. In addition, Teraco's existing investors are rolling forward a significant portion of their equity interests, demonstrating their conviction in Teraco's future growth prospects under the Digital Realty umbrella.

The transaction is expected to close in the first half of 2022 and is subject to customary closing conditions. 

Mr Stein concluded: “This highly strategic transaction immediately cements Digital Realty as the leading colocation and interconnection provider in Africa, a region experiencing rapid digital transformation.”

News: Digital Realty data centre to buy majority stake in Africa's Teraco