Public Storage to acquire rival Simply Self Storage for $2.2bn

BY Richard Summerfield

Storage operator Public Storage has agreed to acquire Simply Self Storage from Blackstone Real Estate Income Trust (BREIT) in a deal worth $2.2bn.

The deal, which is expected to close in the third quarter of 2023, subject to customary closing conditions, will generate over $600m in profit, Blackstone said. The firm acquired Simply in October 2020 from Brookfield Asset Management for approximately $1.2bn.

“We are pleased to welcome Simply’s team, customers, and third-party management partners to Public Storage’s industry-leading brand and platform,” said Joe Russell, chief executive of Public Storage. “This acquisition reflects the continued execution of our multi-factor external growth platform, which includes acquisitions, development, redevelopment, expansion, and third-party management. We are pleased to complete this important transaction with Blackstone, which further demonstrates our position as an acquirer of choice in the industry. Blackstone has done a tremendous job of growing and improving the quality and operations of the Simply portfolio over the past few years.”

“Where you invest matters, and this transaction demonstrates the strong investor demand for the high-quality assets and platforms we have assembled within BREIT,” said Nadeem Meghji, head of Blackstone Real Estate Americas. “This sale is a terrific outcome for BREIT stockholders and enables us to further concentrate BREIT’s portfolio in its highest growth sectors. Public Storage is a leader in its space and will be a terrific steward of this portfolio.”

Simply Storage’s portfolio comprises 127 wholly-owned properties and 9 million net rentable square feet that are geographically diversified across 18 states and located in markets with population growth that has been approximately double the national average since 2018. During BREIT’s ownership period, Blackstone made investments into the Simply platform that enabled the company to enhance the quality of the portfolio and management team, and ultimately significantly increased its net operating income.

Public Storage has been in a state of growth over the last few years. Since 2019, the company has expanded its portfolio by approximately 55 million net rentable square feet, or 34 percent, through $10.6bn worth of acquisitions, development and redevelopment, including Simply and additional properties previously announced as under contract.

News: Public Storage to acquire rival Simply Self Storage for $2.2bn

ViewRay files for Chapter 11 protection

BY Richard Summerfield

ViewRay Inc., has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware. The company’s filing, which came on Tuesday, saw it further disclose that it intends to pursue a sale of its business under section 363 of the Bankruptcy Code, including a sale of all or a portion of the company’s assets, while continuing to support its customers during the Chapter 11 process.

To facilitate the Chapter 11 filing, in addition to having the use of its sufficient existing cash reserves, the company has received a commitment of around $6m in debtor-in-possession (DIP) financing from MidCap Financial Services.

The company has appointed Paul Ziegler as its chief executive. Mr Ziegler, who had previously served as the chief commercial officer (CCO) of the company, has also been appointed to the board as a director. The board also decreased from nine to seven directors. Prior to the Chapter 11 filing, the company terminated its then-CEO, its interim chief financial officer and chief legal officer.

ViewRay developed the MRIdian radiation-therapy system, the ‘world’s first’ radiation therapy system integrated with diagnostic-quality MRI guidance.

“Despite the operating challenges, MRIdian has facilitated real societal value and remains critically important for a broad population of cancer patients, including those who were previously considered untreatable,” said Mr Ziegler in a statement. “We deeply appreciate our teammates, customers, partners, and patients that we serve. We will continue to work diligently to maximize value for the benefit of all stakeholders.”

ViewRay has endured some financial difficulty in recent years. Hit by inflation, supply chain challenges and inconsistent payments from international customers, the company has fallen on hard times. As of 31 March 2023, ViewRay had an order backlog of $411m and recorded adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) losses of $25m in the first quarter of 2023. The company currently intends to lay off 71 employees, in addition to the 36 it let go earlier in 2023. ViewRay currently has 232 remaining employees.

Going forward, ViewRay has vowed to continue “strategically managing” its inventory to help maintain customer sites across the globe. It has also filed several motions in bankruptcy court with the intent of continuing to service customers and honour obligations to remaining employees “following an additional reduction in force”.

News: ViewRay Files Voluntary Chapter 11 Petitions

Eli Lilly to acquire Versanis for $1.925bn

BY Fraser Tennant

In a deal designed to strengthen its position in the fast-growing market for weight-loss treatments, US pharmaceutical company Eli Lilly is to acquire biopharmaceutical firm Versanis.

Under the terms of the definitive agreement, Versanis shareholders will receive $1.925bn in cash, inclusive of an upfront payment and subsequent payments upon achievement of certain development and sales milestones.

“Eli Lilly is committed to investigating potential new medicines to fight cardiometabolic diseases, including obesity, a chronic disease that affects over 100 million Americans,” said Ruth Gimeno, group vice president, diabetes, obesity and cardiometabolic research at Eli Lilly. “By unifying the knowledge and expertise in incretin biology at Lilly with the deep understanding of activin biology at Versanis, we aim to harness the potential benefits of such combinations for patients.”

A private clinical-stage biopharmaceutical company focused on the development of new medicines for the treatment of cardiometabolic diseases, Versanis’ lead asset, bimagrumab, is being advanced in the BELIEVE Phase 2b study as a novel treatment to help adults achieve and maintain both fat loss and a healthy body composition.

Analysts expect the market for weight-loss drugs to reach up to $100bn within a decade, with early movers such as Eli Lilly and Novo Nordisk acquiring a large portion of the market.

“It has been a privilege for our team to advance bimagrumab to address one of the greatest health crises of our time,” said Mark Pruzanski, chairman and chief executive of Versanis. “As a global leader developing life-changing medicines, Eli Lilly is ideally positioned to realise the potential of bimagrumab in combination with its incretin therapies to benefit people living with cardiometabolic diseases.”

The transaction between Eli Lilly and Versanis is subject to customary closing conditions.

News: Eli Lilly to buy Versanis for up to $1.93 billion in obesity drugs push

Global e-commerce fraud “growing and mutating”, reveals new study

BY Fraser Tennant

E-commerce losses to online payment fraud are growing and mutating, financially impacting businesses across the globe, according to a new study by Ravelin.

The study, ‘Global Fraud Trends: Fraud & Payments Survey 2023’, which surveyed 1900 global fraud professionals, reveals that over the past 12 months businesses have seen a huge leap in online payment fraud, account takeover, promotion abuse, refund abuse, and customer and friendly fraud.

As a consequence, businesses are spending more on expanding fraud teams in a bid to mitigate losses. Globally, three-quarters of all online businesses state that their fraud budgets will grow in 2023. In the UK, 62 percent of businesses will be spending more on managing fraud, with France spending 70 percent, Germany 74 percent, the US 69 percent and Canada 84 percent.

Despite this increase in spending, the study found that the funding and expansion of fraud items is only part of the solution, and new approaches are urgently needed to fight fraud and minimise losses.

“Over the years, businesses have built up fraud investigation teams which they are justifiably proud of,” said Martin Sweeney, chief executive of Ravelin. “But fraud continues to grow and mutate and simply throwing more people and money at the problem will not make it go away. Losses will continue to grow.”

When it comes to tools for tackling fraud, the study reveals that most businesses opt for in-house solutions, with machine learning and two-factor authentication two of the tools increasingly being adopted by e-commerce businesses to help with the issue. However, in-house solutions are expensive to maintain and quickly become unsustainable as a business grows, according to Ravelin.

The study also found that there is no singular ‘one and done’ fraud strategy that is most effective. Different solutions are effective at fighting different frauds, and having a robust tool stack allows teams to consider the complex nature of fraud.

“Businesses need to get on the front foot managing fraud: using automation to nip fraudulent transactions in the bud,” concluded Mr Sweeney. “Better automation helps teams scale and frees up fraud investigators from mundane tasks enabling them to focus on informing product development, identifying other sources of profit erosion, and other more important strategic tasks that drive growth.”

Report: Global Fraud Trends: Fraud & Payments Survey 2023

TPG to acquire Forcepoint unit in a $2.45bn deal

BY Richard Summerfield

Global asset management firm TPG has agreed to acquire Forcepoint’s global governments and critical infrastructure (G2CI) cyber security business in a deal worth $2.45bn.

The deal is subject to regulatory review and customary closing conditions and is expected to close in the fourth quarter of 2023.

Under the terms of the deal, Forcepoint’s commercial and G2CI businesses will be separated and will establish the G2CI business as an independent entity. The unit focuses on critical infrastructure for US government and federal agencies.

TPG will invest in Forcepoint G2CI through TPG Capital, the firm’s US and European late-stage private equity platform.

“It’s our mission to support the national security and intelligence communities by providing trusted, data-driven security solutions that enable them to collaborate and conduct mission-critical work securely and effectively,” said Sean Berg, president, global governments and critical infrastructure at Forcepoint. “TPG has a long history of carving-out, building, and scaling world-class cybersecurity companies. We’re confident that this partnership, along with continued support from Francisco Partners, will provide us the resources and expertise to strengthen our position as a partner of choice for government agencies.”

“Today’s operating environment – one in which data volumes are compounding, attack surfaces are broadening, and threats are growing in sophistication – demands dynamic security solutions,” said Tim Millikin, a partner at TPG. “This is especially true for the public sector, and Forcepoint has designed its platform to address the unique complexities of government objectives and culture. We’re excited to partner with Sean and the G2CI team to expand the platform and further its position as a leader in high assurance, zero trust security.”

“We are proud to have built an industry-leading portfolio of security products that protect government and enterprise customers’ infrastructure, people, and data,” said Manny Rivelo, chief executive at Forcepoint. “This transaction represents an exciting opportunity for the Forcepoint G2CI business to continue its trajectory of growth, delivering high assurance security to government and critical infrastructure customers worldwide. Similarly, it enables the Forcepoint Commercial business to further focus investment and innovation in accelerating growth of the company’s Data-first SASE platform, Forcepoint ONE, while delivering increased value to our customers.”

“Sean and the Forcepoint G2I team have been excellent partners and built a thriving business that will benefit from operating as its own standalone business,” said Brian Decker, a partner at Francisco Partners. “We are excited to remain investors in the business and partner with the management team and TPG to help it continue to grow and succeed”.

Francisco Partners, a leading global investment firm that specialises in partnering with technology businesses, acquired Forcepoint in January 2021 from Raytheon Technologies. Francisco will retain a minority stake in the unit going forward.

News: TPG to buy Forcepoint unit from Francisco Partners for $2.45 billion, Wall Street Journal reports