Happy Monday. Here’s what we’ve got today…

• A look at K1 portfolio company’s lawsuit against its sponsor

• Plus, Becton Dickinson could be parting ways with its life sciences unit

Breach of fiduciary duties:

K1 Investment Management is facing allegations that the firm exploited confidential board-level information to force a distressed takeover of portfolio company Recycle Track Systems, according to a complaint filed in Delaware Chancery Court.

In 2022, K1 invested $60 million in waste management technology platform RTS and added managing partner Ronald Cano to the company’s board.

Two years later, a cash-strapped RTS began negotiations with lender Trinity Capital to defer principal payments on the company’s $45 million debt facility. Trinity agreed, but only if RTS raised at least $10 million in additional equity funding.

RTS secured a term sheet from an unnamed sustainable investment firm for $20 million in new equity at a $325 million valuation (and a competing offer from K1 with “predatory” governance terms). The outside firm’s was, however, contingent on Trinity granting the principal payment deferral.

After forming a special committee to evaluate the offers, RTS’ board selected the unnamed firm.

While this was happening, says the lawsuit, Cano secretly initiated talks with Trinity—without the knowledge of RTS' other directors—over a possible K1 purchase of its RTS loan.

His objective, says the filing, was to orchestrate a distressed situation that K1 could leverage for a cut-price RTS takeover.

In December, Cano resigned from the board. Three days later, K1 acquired the loan from Trinity and then declined to grant the payment deferral, killing the contingent equity raise.

Per the complaint: “By obtaining the assignment of the loan from Trinity, K1 aimed to gain majority control of RTS either by accepting a predatory equity investment offer or forcing RTS into default, at which point K1 could acquire the entire Company at a level well below its true value.”

Under threat of imminent default, RTS rushed to find alternatives before a February 1st payment deadline.

Late last month, the company completed a $40 million raise from Edison Partners, Volition Capital, and StepStone Capital Partners.

But, the company says, it had to fight K1 through the entire process: "Cano and K1 have threatened litigation against RTS, sought to intimidate Edison and other RTS stockholders, and even dangled the prospect of handsome incentive packages for RTS’s management in an attempt to entice RTS’s management to reject the Edison transaction."

The complaint seeks damages "at least in the tens of millions of dollars" and is awaiting initial procedural rulings. K1 has not yet filed a response.

• Activist investor Starboard Value is pushing Becton Dickinson (NYSE: BDX) to spin off its life sciences unit, which could be valued at around $30 billion, per the FT.

• Warburg Pincus and Berkshire Partners agreed to acquire Triumph Group (NYSE: TGI), a Radnor, Pennsylvania-based aerospace aftermarket parts maker, in an all-cash deal at a valuation of $3 billion.

• Tallvine Partners acquired Odyssey Aviation's U.S. assets, including three FBO facilities across Detroit, Kissimmee, and St. Simons Island, from Granite Creek Capital Partners.

• Marlin Equity Partners acquired a majority stake in Napier AI, a London-based provider of financial crime and compliance software.

• Greenhall Capital Partners agreed to acquire Johnson Communications, a Texas-based rural fiber and wireless infrastructure provider.

• Greenhall Capital Partners agreed to acquire Johnson Communications, an Alvarado, Texas-based rural fiber-optic telecom provider.

• Ariel Investments launched Project Level, a new fund focused on women's sports, and invested $110 million to seed a Denver expansion team in the National Women's Soccer League.

• Abu Dhabi National Oil Co. and OMV AG are in talks to acquire Canada’s Nova Chemicals from Abu Dhabi SWF Mubadala Investment Co., with plans to merge it into a consolidated $30 billion chemicals entity alongside UAE-listed Borouge and Europe’s Borealis AG.

• CIVC Partners acquired a majority stake in Strategus, an Englewood, Colorado-based provider of connected TV advertising services.

• JMI Equity invested in SimpliGov, a Sacramento-based government workflow automation platform.

• Fortissimo Capital agreed to acquire a 14 percent stake in Stratasys (Nasdaq: SSYS), an Israeli 3D printing solutions provider, for $120 million.

• L'Oreal (EPA: OR) agreed to sell a €3 billion stake in Sanofi (EPA: SAN), reducing its ownership from 9.4 percent to 7.2 percent.

• Godspeed Capital acquired InSite Engineering, a Hoover, Alabama-based water and wastewater engineering services firm.

• A nonprofit healthcare consortium agreed to acquire Crozer Health, a Pennsylvania hospital operator, from Prospect Medical Holdings.

• Roark Capital acquired a majority stake in GPRS Holdings, an Ohio-based subsurface infrastructure solutions provider, from Kohlberg, which retained a minority position.

• Ardian is considering a sale of Trigo Group, a French quality management and consulting services provider, in a deal that could value the company at around €600 million, per Bloomberg.

• Five Arrows and Insight Partners are exploring the sale of their minority stakes in Kpler, a Belgian commodities data provider, per Reuters.

• Court Square and Windrose invested in Soleo Health, a specialty pharmacy and infusion services provider.

• B. Riley Financial (Nasdaq: RILY) is exploring a spinoff of its securities business, per Bloomberg.

• Tempur Sealy (NYSE: TPX) received court approval to proceed with its $4 billion acquisition of Mattress Firm, overcoming antitrust opposition from the Federal Trade Commission.

• Helix Traffic Solutions, a portfolio company of Nonantum Capital Partners, acquired Mels Electric, a Texas-based traffic safety infrastructure provider, from Gibson & Associates.

Tech, Vertical SaaS, & Misc. Enterprise

• Riot, an employee cybersecurity monitoring platform, raised $30 million in Series B funding led by Left Lane Capital, with participation from Y Combinator, Base10, and FundersClub.

• Jump, a provider of AI-powered meeting automation tools for financial advisors, raised $20 million in Series A funding led by Battery Ventures, with participation from Citi Ventures, Sorenson Capital, and Pelion Ventures Partners.

• Tana, an AI-native workspace platform, raised $14 million in Series A funding led by Tola Capital, with participation from Lightspeed Venture Partners, Northzone, Alliance VC, and firstminute capital.

• Hallo Theo, a Berlin-based digital property management platform, raised €10 million in seed funding led by Insight Partners.

Fintech

• Myne, a Dubai-based wealth asset tracking platform, raised $2 million in pre-seed funding led by Scene Holding, with participation from Raz Holding, Plus VC, and Annex Investments.

Industrials, Greentech, & Other

• Enduro Genetics, a synthetic biology startup developing technology to improve microbial cell productivity in biomanufacturing, raised €12 million in Series A funding led by Supernova Invest, with participation from NOON Ventures and Sandwater.

• Goldman Sachs Asset Management is hoping to raise $3 billion for its West Street Climate Credit fund focused on low-carbon transition companies.

• Silver Oak raised a continuation fund to back dental support organization Smile Partners.

• Petra Capital Partners raised $270 million for its fifth healthcare and business services growth fund.

• Conviction raised $230 million for its second AI-focused venture fund and added former Sequoia partner Mike Vernal as general partner.

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