A $300 million signature?
The lost equity stake at Centerview Partners

Happy Sunday. Let’s get started:
Most senior bankers would have an aneurysm if their analyst forgot to sign an NDA.
While they should almost certainly be taking themselves (and their NDAs) less seriously, that urgency is rooted in some degree of truth — it’s important to sign your documents.
In today’s note, we’ll take a look at what can happen when things don’t get signed. This time, however, it was the senior banker that didn’t ink the paperwork.
Enter Centerview’s David Handler.

Colleagues say “he could grind [junior bankers] into the floor”
The rainmaker joined boutique investment bank Centerview Partners in 2008, shortly after its founding. Exiting his prior role as co-head of technology banking at UBS, he was instrumental in forming Centerview’s tech practice and founded its Palo Alto office.
To entice Handler, and get him to take a risk on an upstart bank, his pay package included a generous split of the firm’s fee pool, regardless of his own group’s performance. A deal that seemed reasonable when the firm was just a handful of bankers, but quickly escalated as revenue snowballed with rapid growth.
As his comp started getting out of hand, CVP’s co-founders met with Handler to negotiate a restructuring of his employment agreement, reducing the annual cash windfalls in exchange for an equity stake in the firm.
After a series of meetings, the two sides eventually hashed out economic terms of the new agreement in 2013, with Handler to receive 7 percent of the Centerview partnership.
Centerview’s founders signed the partnership agreement, but Handler refused to countersign and fully execute, continuing to push back on related restrictive covenants.
Negotiations eventually died down, with both parties reportedly operating as though they’d completed the deal. Importantly, Handler saw a reduction in his cash compensation commensurate with the terms of the agreement.
Fast forward to 2020, and Handler’s relationship with CVP’s founding partners was on the rocks.
The key issue: Handler preferred an advisory-first approach, providing routine strategic support to a handful of blue-chip clients with which he held deep relationships. CVP’s leadership, however, wanted him to focus on sourcing new clients and getting more deals done (with the chunky fees that go along with them).
In 2021, Handler left the office he founded, moving to Miami for family reasons. Shortly after, Centerview poached three technology bankers from Bank of America, placing them in charge in Palo Alto.
It’s rumored that Handler and the tech team had no idea the BoA hires were coming — they read about it online in a press release. This proved to be the last straw for Handler, who contended that CVP leadership was attempting to push him out.
With the situation rapidly deteriorating, Handler submitted a request to the firm for confirmation of his presumed equity stake, as well as detail on the firm’s financial performance. Centerview waffled, never sharing the requested info, which, in turn, prompted Handler to level accusations that the firm was attempting to steal his fairly negotiated equity.
Opting for the nuclear response, Handler resigned, commenced litigation, poached 12 colleagues, and set up his own competing investment bank, Tidal Partners.
Centerview says he’s full of it, filing a legal memo in response that states Handler “is not and never has been a partner.” They maintain that no valid contract actually exists, and, even if it did, any equity Handler might own could simply be repurchased by the firm for a nominal price. Standard practice for any partner departure from the firm.
Their stance appears hard to argue, with Handler not signing the partnership agreement, never participating in partnership income, and not receiving the K-1 tax form that CVP’s other equity partners got each year.
Either way, the ultimate decision is now up to the Delaware Court of Chancery, with a July hearing set to determine whether Handler needs to simmer down, or is entitled to an equity stake which could be worth well into nine figures.

🍾 Deals, Deals, Deals
The week's most interesting transactions
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EQT just posted Europe’s largest buyout of the year, agreeing to take private British veterinary drugmaker Dechra for nearly $5.6 billion. It’s a slightly surprising outcome, given Dechra issued a profit warning midway through negotiations.
Rather than scrap the deal, EQT, and co-investor ADIA, dropped purchase price by 5% and went for it anyway. The offer still comes at a 44% premium, so shareholders might consider themselves blessed on this one.
Was the deal really that good, or was EQT feeling the heat in a difficult deployment environment and just needed to get some cash to work? (Read More: BBG)
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The latest development in an increasingly troubled niche: Amazon brand roll-up SellerX reached an agreement to buy fellow aggregator Elevate Brands, a competing platform that had raised $120 million from FJ Labs, Soroban Capital, and Novel TMT.
Believing the pandemic had permanently shifted consumer behavior in favor of e-commerce, aggregators chased deal after deal in a winner-take-all hunt for economies of scale.
Now, with rising costs and a return to pre-pandemic norms, the party is very much over. The real kicker, however, comes from the debt burden that fueled the whole thing — higher rates have turned marginally over-levered businesses into dumpster fires.
In some questionable portfolio construction, backers L Catterton, Victory Park Capital, CoVenture, and Upper90 each have widespread debt and equity exposure across the aggregator universe. Write-downs are coming thick and fast, along with a search for further tie-ups to weather the storm. We’ll see how it all turns out, but, in the meantime, Businessweek dropped a great write-up on the current situation. (Read More: BBG)
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Lucid Group, a producer of luxury EVs meant to rival Tesla, announced a $3 billion secondary offering. Saudi Arabia’s Public Investment Fund committed to take down $1.8 billion of the offering, adding to their existing 60% stake.
The follow-on unlocks critical financing for Lucid, who’s had to contend with lengthy production delays and an over-the-top cash burn.
PIF is in deep, part of its continued focus on economic diversification initiatives in which it funnels oil money into investments across a range of industries meant to eventually reduce its reliance on oil.
This week’s other big dog deals —
⁃ Francisco Partners and TPG have reportedly ended their joint $5 billion approach for analytics software business New Relic. Sources cited both debt financing difficulties and a mismatch between offer and valuation expectations.
⁃ Universal Music Group is reportedly angling to pick up Queen's music catalog from Disney for more than $1 billion, though Disney denies engaging in discussions.
⁃ TDR Capital’s Asda, a British supermarket chain, agreed to buy most of gas station and convenience operator EG Group’s U.K. business (also TDR-owned) for $2.8 billion.
⁃ CVC and Francisco Partners dropped their pursuit of payments firm Network International Holdings, leaving Brookfield the frontrunner for the asset.
⁃ General Atlantic and Advent are exploring a potential purchase of Everstone Capital’s 41% stake in Restaurant Brands Asia, the operator of Burger King in India and Indonesia.
⁃ Triton is prepping an exit for specialty pharmaceutical business Pharmanovia, looking to bring in more than $1.5 billion.
⁃ Constellation Energy purchased a 44% stake in a Texas nuclear power plant from NRG Energy for $1.8 billion.
⁃ HCA posted solid results, but other health system operators just can’t figure it out. BJC HealthCare of St. Louis and Saint Luke's Health System of Kansas City are reportedly evaluating a potential tie-up; a deal that would create a 28-hospital system worth nearly $10 billion.
⁃ CPP is reportedly offloading up to $2 billion of private fund positions and $1 billion of direct private company stakes.
⁃ EQT handed Morgan Stanley the mandate to sell Ellab, a Danish manufacturer of industrial technology products, looking for a valuation of around €1 billion.
⁃ Kelso brought on Baird to lead its exit of Augusta Sportswear Brands for approximately $800 million.
⁃ Macquarie is shopping DIG Airgas, a South Korean industrial gas producer that could be worth north of $2 billion.
⁃ Looking to diversify away from shipping, and put some of the pandemic’s cash influx to work, maritime shipping firm CMA CGM agreed to buy the publisher of French newspaper La Tribune.
⁃ HDI International has reached an agreement to buy Liberty Mutual’s Latin America business for nearly €1.4 billion.
⁃ Cloud computing platform CoreWeave raised $200 million of additional funding from existing investor Magnetar Capital.
⁃ Chinese generative AI startup Minimax is nearing a deal to raise more than $250m at a $1.2 billion valuation, with the round potentially led by Tencent.
⁃ Nano Dimension made an approach to acquire Stratsys, who, just last week, agreed to buy Desktop Metal. The 3D printing firm rejected Nano Dimension’s initial offer.
💰 Fundraising
⁃ CVC is looking to land €25 billion for a ninth flagship fund.
⁃ General Atlantic is raising a $1 billion for a life sciences companion fund to invest alongside the firm’s flagship vehicle.
⁃ Khosla Ventures raised $1 billion for a potential companion vehicle to the firm’s ongoing $3 billion raise.
⁃ Primavera Capital, a Chinese buyout firm, raised a new $4 billion fund.
⁃ Integrum is launching a $1.1 billion debut buyout vehicle focused on tech-enabled services.
⁃ Newbury Partners is raising a $2.5 billion secondaries fund.
⁃ Pear VC brought in $432 million for a fourth flagship seed fund.
⁃ Baidu is launching a $145 million fund focused on investments in AI-generated content businesses.

📜 Bullpen Reading Roundup
Get quick with the ALT + Tab
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A hedge fund career is as volatile as ever, but, if you’re a top performer, it can certainly be worth your while. One headhunter likened the search for talent to the transfer market for NBA or Premier League stars. $10 - $15 million packages are routinely handed out, with $50 million deals not uncommon.
The asset class may even be back in vogue, with consistent managers fielding lengthy wait lists for prospective LPs and reversing the previous trend of management fee compression. (Check it out: BBG)
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The only thing better than the U.S. avoiding a catastrophic debt default is managing to bring in a fat stack of cash along the way. Pulling it off, one trader appears to have either perfectly analyzed the political climate, or had some spicy insider knowledge.
The unnamed trader leveraged out-of-the-money call options to place a bullish bet on pipeline company Equitrans, a seemingly strange move until the business became the surprise beneficiary of a pipeline authorization tucked into the wider debt ceiling legislation. Shares jumped by nearly 50% on the news. (Check it out: BBG)
Thanks for reading, catch you guys next week.
— Sam