Happy Monday — we’re back with the first issue of 2025 after a short holiday hiatus. Here’s what we’ve got…

• A look at the Fifth Circuit’s ruling on the Serta Simmons uptier

• Plus, Strategic Value Partners purchases Vista Outdoor’s Revelyst unit

Uptier rejected:

The Fifth Circuit Court of Appeals has invalidated Serta Simmons Bedding's 2020 uptier exchange, ruling that private transactions with select lenders fall outside "open market purchase" exceptions to pro rata sharing requirements.

It’s the first appellate guidance on uptiers—of which the formerly Advent International-owned Serta was among the first—and adds uncertainty to the controversial liability management exercise.

Serta argued that its privately negotiated exchange of $875 million in existing loans for new super-priority debt qualified under a carveout in its credit agreement allowing for non-pro rata repurchases if conducted as an “open market purchase.”

While the transaction provided Serta with $200 million in new money from participating lenders, it effectively subordinated Apollo, Angelo Gordon, and other excluded lenders who held identical debt.

The Fifth Circuit reversed a 2023 ruling from the U.S. Bankruptcy Court for the Southern District of Texas that had validated the transaction, rejecting the interpretation of scandal-plagued ex-bankruptcy judge David Jones.

Instead, the court ruled that open market purchases must occur in the secondary market for syndicated loans rather than through private negotiations.

The Fifth Circuit explicitly noted the broader implications of its ruling on existing credit agreements with similar open market purchase language.

While many post-2020 agreements include specific uptier blocking provisions, the court wrote that numerous legacy deals rely on open market purchase exceptions that "will often not justify an uptier."

The court also struck down provisions in Serta's bankruptcy plan that would have indemnified the participating lenders against claims related to the uptier.

Referencing provisions prohibiting contingent claims where the claiming entity is co-liable with the debtor, the court called the participating lenders’ indemnification claims “an impermissible end-run around the Bankruptcy Code.”

"The lenders wanted SSB to reimburse them for future losses they have not yet suffered and for which they were co-liable with SSB, their contractual partner in the Uptier."

The decision creates a path for the excluded lenders to pursue potentially "hundreds of millions of dollars" in damages and returns the case to the lower bankruptcy court for reconsideration.

• CC Capital Partners submitted a A$2.9 billion takeover offer for Australian wealth manager Insignia Financial (ASX: IFL), topping a prior bid from Bain Capital that was rejected last month.

• Paychex (NYSE: PAYX) is in advanced talks to acquire Paycor HCM (NYSE: PYCR), a payroll processing and HR services provider with a $3.3 billion market value, per Bloomberg.

• Strategic Value Partners acquired ammo and hunting accessories maker Revelyst from Vista Outdoor (NYSE: VSTO) for $1.125 billion.

• Battery Ventures acquired RetailNext, a provider of retail analytics software.

• Red Arts Capital acquired KKSP Precision Machining, a manufacturer of machined components.

• Gallant Capital Partners agreed to acquire Navient's Government Services business, a provider of outsourced business processing services for U.S. government agencies.

• The Walt Disney Company (NYSE: DIS) agreed to form a joint venture with Fubo (NYSE: FUBO) to combine Hulu + Live TV with Fubo's streaming operations, with Disney taking a 70 percent controlling stake.

• H.I.G. Capital agreed to acquire Quisitive Technology Solutions, a Microsoft Cloud and AI solutions provider, for C$169.1 million.

• Getty Images Holdings (NYSE: GETY) is exploring a combination with stock photo provider Shutterstock (NYSE: SSTK), per Bloomberg.

• Taiyo Holdings and Japan Industrial Partners are in talks to acquire DIC Corp., a Japanese chemical company that holds a 19 percent stake in Taiyo and has a market value of around $2 billion.

• Digital Edge, backed by Stonepeak, raised $640 million in equity financing from institutional investors and sovereign wealth funds to develop new data center infrastructure across Asia.

• Marquee Brands, backed by Neuberger Berman, acquired Laura Ashley, a UK-based lifestyle and fashion brand, from Gordon Brothers.

• Coalesce Capital acquired a majority stake in Pearl Meyer & Partners, an executive compensation and leadership consultancy.

Tech, Vertical SaaS, & Misc. Enterprise

• Buk, a Chilean HR management platform, raised $35 million in Series B funding from Base10 Partners and Greenoaks, with participation from SoftBank Latin America Fund.

• Jentic, a developer of communication middleware for AI agents, raised €4 million in pre-seed funding led by Elkstone, with participation from Sure Valley Ventures, TechOperators, and Shuttle.

Healthcare

• Orbis Medicines, a Danish biotech developing oral macrocycle drugs, raised €90 million in Series A funding led by NEA, with participation from Eli Lilly, Cormorant, Export and Investment Fund of Denmark, Novo Holdings, and Forbion.

• General Proximity, a biotech developing induced proximity medicines for undruggable proteins, raised $16 million in seed funding led by Felicis, with participation from Y Combinator, age1, Modi Ventures, and Wilson Sonsini.

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