Amazon acquires self-driving start-up Zoox for $1.2bn

BY Fraser Tennant

In a transaction that it believes “will help bring the vision of autonomous ride-hailing to reality”, online retailer Amazon is to acquire self-driving start-up Zoox for a reported $1.2bn.

The acquisition represents further investment by Amazon in the autonomous car industry, following its participation in a $530m funding round by Aurora Innovation – also a self-drive start-up – in 2019.

At the same time, Amazon has been working on its own autonomous vehicle technology projects, including its last-mile delivery robots – six-wheeled sidewalk-treading bots designed to carry small packages to the homes of customers.

Zoox, however, is Amazon's first acquisition in the autonomous vehicle industry.

“Zoox is working to imagine, invent and design a world-class autonomous ride-hailing experience,” said Jeff Wilke, chief executive worldwide consumer at Amazon. “Like Amazon, Zoox is passionate about innovation and about its customers, and we’re excited to help the talented Zoox team to bring their vision to reality in the years ahead.”

Founded in 2014 with the vision of purpose-built, zero-emissions vehicles designed for autonomous ride-hailing, Zoox's ground-up vehicle focuses on the ride-hailing customer, with tightly integrated features designed to provide a revolutionary passenger experience. The California-based firm’s  approach to invention provides flexibility and the means to iterate rapidly to continuously deliver a superior experience for its customers.

“This acquisition solidifies Zoox's impact on the autonomous driving industry,” said Aicha Evans, chief executive of Zoox. “We have made great strides with our purpose-built approach to safe, autonomous mobility, and our exceptionally talented team working every day to realise that vision. We now have an even greater opportunity to realise a fully autonomous future.”

Aicha Evans, along with Jesse Levinson, Zoox co-founder and CTO, will continue to lead the team post-acquisition, as they innovate – including the development of their robot taxi – and drive towards their mission: to create autonomous mobility from the ground up.

“Since Zoox's inception six years ago, we have been singularly focused on our ground-up approach to autonomous mobility,” concluded Mr Levinson. “Amazon's support will markedly accelerate our path to delivering safe, clean and enjoyable transportation to the world.”

News: Amazon agrees to buy self-driving technology startup Zoox

GNC to close 1200 stores as part of Chapter 11 bankruptcy

BY Fraser Tennant

Due to coronavirus (COVID-19)-related impacts on its business, global health and wellness brand GNC Holdings, Inc. is to pursue a dual-path process that will allow it to restructure its balance sheet and accelerate its business strategy through Chapter 11 bankruptcy.

The Chapter 11 filing allows the retailer to keep operating, although hundreds of underperforming stores – approximately 800 to 1200 – will be closed. GNC’s US and international franchise partners and all corporate operations in Ireland are separate legal entities and are not a part of the Chapter 11 process.

“The COVID-19 pandemic created a situation where we were unable to accomplish our refinancing and the abrupt change in the operating environment had a dramatic negative impact on our business,” said GNC in a statement.

With the support of its lenders and key stakeholders, GNC expects to confirm a standalone plan of reorganisation or consummate a sale that will enable the business to exit from this process later this year. To this end, the company has secured approximately $130m in additional liquidity – $100m debtor-in-possession (DIP) financing and $30m from modifications to an existing credit agreement.

GNC is confident that between financing and cash flow from normal operations, and with the continued support of the International Vitamin Corporation (IVC), its largest vendor, GNC will meet its go-forward financial commitments as it works to achieve its financial objectives.

Headquartered in Pittsburgh, PA, GNC is a leading global specialty retailer of health and wellness products, including vitamins, minerals and herbal supplement products, as well as sports nutrition products and diet products. The company has been led by chief executive Ken Martindale since September 2017.

Furthermore, GNC has a diversified, multichannel business model and derives revenue from product sales through company-owned retail stores, domestic and international franchise activities, third-party contract manufacturing, e-commerce and corporate partnerships.

However, like many retailers, the Pittsburgh-based company has struggled in recent years, clawing its way out of difficulty in February 2018 when it refinanced its loans and negotiated a $300m investment with Chinese health food group Harbin. Despite this, over the past 12 months, the company has reduced its store-count.

GNC concluded: “This reduction will allow GNC to invest in appropriate areas to evolve for the future, and better position the company to meet current and future consumer demand around the world.”

News: GNC parent company files for bankruptcy protection, plans to permanently close up to 1,200 stores

KKR to acquire Roompot Group for $1.1bn

BY Richard Summerfield

Private equity giant KKR has agreed to acquire Roompot Group, a provider of holiday parks in Western Europe and the number one holiday park operator in the Netherlands, from European private equity firm PAI Partners for $1.1bn.

PAI reportedly began looking for a buyer in October of last year. In March 2020, it planned to launch a formal sale process but that was postponed due to the ongoing COVID-19 pandemic. However, a deal for the company has now been reached.

Since being acquired by PAI for $673m in 2016, Roompot has invested significantly in upgrading and expanding its accommodations and opening new parks, and developed a strong digital marketing and distribution platform. It has also increased real estate ownership and grown revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) at double digit growth rates.

“As we change to new ownership we would like to thank PAI, who have been a hugely supportive partner to our team since 2016, and welcome KKR for the next phase,” said Jurgen van Cutsem, chief executive of Roompot Group. “Our focus, as always, will be providing a great service for our leisure customers and third-party providers. We continue to see growing demand from our guests and from our corporate partners due to the leading platform we have put in place, providing a solid foundation to scale the business, also on an international level.”

“Roompot is already a leading player in the region with a best-in-class management team and a strong recent track record,” said Daan Knottenbelt, partner and head of the Benelux region at KKR. “We see significant further growth potential based on a very strong development pipeline, continued expansion of Roompot’s owned assets and new corporate partnerships. KKR is investing in Roompot through our Core Investments strategy, which is our pool of capital for longer-term investments, and we look forward to working with Jurgen and his team over the coming years.”

Joerg Metzner, a director at KKR, added: “We have been looking for a platform to invest behind in the fragmented European holiday parks market for some time. Our support for Roompot and its management team fits perfectly with our broader investment theme in the leisure space.”

Operating across its 33 parks in the Netherlands, Belgium and Germany, Roompot has over 2100 employees catering for approximately 3 million guests per year. The company generates around €400m in annual sales.

News: KKR buys vacation parks firm Roompot in $1.1 billion deal

58.com to be taken private in $8.7bn deal

BY Richard Summerfield

A consortium of investors backed by private equity firms Warburg Pincus and General Atlantic have agreed to acquire Chinese online classifieds company 58.com in a deal worth $8.7bn.

The deal has been unanimously approved by the company’s board and is expected to close in the second half of 2020.

The take-private consortium includes Warburg Pincus Asia LLC, General Atlantic Singapore Fund Pte Ltd, Ocean Link Partners Ltd, 58.com chief executive officer Jinbo Yao and Internet Opportunity Fund LP, an entity controlled by Yao, which has about 42 percent of the voting power in 58.com, the Chinese equivalent of  Craigslist.

The consortium plans to fund the merger through a combination of cash contributions, rollover equity contributions from certain shareholders and $3.5bn in term loans from Shanghai Pudong Development Bank Co, Ltd.

According to a statement announcing the deal, 58.com shareholders will get $56 in cash for each American depositary share, a premium of nearly 20 percent from when the company got the first take-private proposal in April.

The deal would make 58.com the latest in a recent string of Chinese companies to delist from New York and comes just days after online car information provider Bitauto announced it had entered into a similar deal. Bitauto agreed to be taken by private by an investor group backed by gaming and social media firm Tencent Holdings Ltd for $1.1bn in cash.

Chinese companies have been pulling out of the US markets at the fastest pace since 2015 this year. Prior to the announcement of 58.com’s sale, US-listed Chinese companies have announced four go-private deals with a combined value of $8.1bn including debt, according to Bloomberg.

Interest in Chinese take-private deals has increased as Sino-US tensions have risen in recent years. Many companies have been forced to consider the merits of maintaining a New York listing rather than relocating to Shanghai or Hong Kong.

News: China’s 58.com to go private in $8.7 billion deal

Online learning company Skillsoft files for Chapter 11

BY Fraser Tennant

In an attempt to reduce its approximately $1.5bn debt and position itself for long-term growth, US educational technology company Skillsoft and a number of its affiliates has filed for Chapter 11 bankruptcy.

The voluntary, pre-packaged Chapter 11 cases have been filed in order for Skillsoft to implement a restructuring support agreement (RSA) with many of its lenders – an agreement which is expected to result in a reduction of the company’s balance sheet to $410m from approximately $2bn.

Furthermore, the RSA is expected to provide Skillsoft with significant additional liquidity – while minimising operational disruptions – by ensuring all holders of general unsecured claims, including vendors, suppliers and other trade creditors, are paid in full. Additionally, there are no planned changes to Skillsoft’s leadership team or organisational structure as a result of the restructuring.

“This agreement marks an important step forward in significantly strengthening Skillsoft’s capital structure and positioning the company for long-term success,” said John Frederick, chief administrative officer at Skillsoft. “This is an exciting time for digital learning, and Skillsoft provides best-in-class learning solutions to thousands of customers around the world, including 65 percent of companies in the Fortune 500.”

Indeed, Skillsoft has stated that it remains focused on providing its customers with state-of-the-art corporate learning solutions, best-in-class performance support resources, as well as live events.

“While our core business remains strong, with attractive profitability and cash flow characteristics, our debt levels are too high,” added Mr Frederick. “We need to invest further and that requires our debt levels to come down to free up cash to further enhance our offerings. We look forward to benefitting from a stronger balance sheet and enhanced financial flexibility.“

In conjunction with the court-supervised process, Skillsoft has received a commitment for $60m in debtor-in-possession (DIP) financing from some of its first lien lenders. This financing, together with cash generated from ongoing operations, is expected to provide ample liquidity to support Skillsoft’s operations during the restructuring process.

“We appreciate the broad support of our lenders, who will become the new owners of the Company and recognise the inherent value in the Skillsoft brand,” concluded Mr Frederick. “We also thank the entire Skillsoft team for their ongoing hard work and commitment to our company and our customers and are grateful to our vendors and business partners for their continued support.”

News: E-learning company Skillsoft files for Chapter 11 bankruptcy