_{CRAZY VALUATIP}

SoftBank Finds A $340 Billion Unicorn

Who wins in a fight? The smart one or the crazy one? Adam Neumann will tell you his answer, but I can assure you one thing is true - it’s never the guy who buys at the top. Masayoshi Son - welcome to Buysiders.

In addition to its high-quality slide decks (see below), SoftBank is known for picking some winners and some absolute flame outs.

Huge winners include Arm, Alibaba, ByteDance and Slack, while SoftBank’s biggest loser is WeWork, which was an unmitigated disaster.

Now SoftBank is back with another crazy valuation- $340 billion for OpenAI.

That’s right, even as China’s DeepSeek becomes the number one app on the app store - proving the adage once again that America invents, China replicates (and Europe regulates) - Masa’s SoftBank is going all in on OpenAI, writing a $15 - $25 billion check to become the company’s largest financial backer.

In addition to this investment, SoftBank has committed to invest another $15 billion into Stargate, OpenAI’s new data center project that will cost upwards of $100 billion.

SoftBank already owns a $2 billion stake in OpenAI, which it acquired last year at ~1/2 of the current valuation.

The total check size of ~$40 billion ($25 billion investment plus $15 billion for Stargate) would be one of SoftBank’s largest ever investments, more than double what they invested in WeWork.

The good news is Masayoshi Son clearly has a firm grasp on all of the key financial concepts:

It’s hard to bet against the guy who has billions more dollars than me, so I would like to give SoftBank the benefit of the doubt, but man, they do not make that easy. Regardless, this investment could help serve as a catalyst for OpenAI to raise significant capital from outside investors (at a juicy valuation) once it switches to a for-profit company…

_{PRESENTED BY MAINSHARES}

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Does it work? Mainshares stands behind FORGE so completely that they credit back 100% of tuition when you close a deal with them.

Apply today and join FORGE for 5 transformative days in Austin, TX.

_{NEWS ROUNDUP}

Top Reads

• Private Equity roll ups are coming from physician practices

• HSBC cuts banking staff in US and Europe to focus on Asia

• Walgreens stock falls as private equity bids fall through 

• Hobbycraft owner Modella Capital considers acquisition of WH Smith

• Ardian closes $30 billion secondaries fund

• CVC restructures U.S. operations after underperforming deals

• Jefferies CEO offers support after associate's death

• Goldman Sachs tech banker Ryan Nolan departs after 13 years

• BDT & MSD Partners expand tech advisory with new hire

_{DEAL OF THE MONTH}

Calpine Corp Looks to the Stars for an Exit

Some people - like your ex who moved to Brooklyn and dumped you because Mercury was in retrograde - look to constellations to justify their life choices. Others look at Constellation to find $16 billion.

Its still early in 2025, but the stars seem to be aligning for a good year, as Constellation kicked off the year with its $16.4 billion acquisition Calpine Corp.

Consideration for the deal is a mixture of cash and stock, with Calpine shareholders receiving 50 million shares of Constellation and $4.5 billion in cash, plus the assumption of ~$12.7 billion of Calpine net debt.

When you take into account cash expected to be generated between signing and closing plus the value of tax attributes at Calpine, you actually get a purchase price of $26.6 billion, or ~7.9× 2026 EBITDA.

Look ~8.0x is an expensive deal, but the synergies are there, and the deal will create the largest clean energy producer in the US by a large margin, with over 308 million megawatt hours of generating capacity.  

All that aside, what investors care more about is the fact that the deal is expected to be EPS accretive by more than 20% in 2026 and generate more than $2 billion in FCF annually.

Hopefully Jupiter continues to rotate in reverse, or whatever it’s doing right now, because this deal is quite a way to kick of 2025. And, hopefully we see a few more $10+ billion deals coming our way this year.

_{PRIVATE EQUITY DEAL OF THE MONTH}

Apollo and BC Partners Acquire GFL Environmental

PE funds are known for their love of roll-ups, but a lesser known love of private equity funds are corporate carveouts. These deals can be hairy, but if pulled off well they can be very successful.

Corporate carveouts let companies shed non-core business units for cold hard cash, which can then be used to pay down debt, reinvest in core operations, or fund growth. That’s exactly what GFL had in mind when it sold its environmental unit to Apollo and BC Partners for ~$8.0 billion.

The deal expected to generate ~$6.2 billion for GFL, which will continue to hold a ~$1.7 billion equity interest in the carved out unit. This allows for a tax-efficient transaction for GFL and of course participating in any upside that Apollo and BC can deliver.

The key use of proceeds here is to allow GFL to repay ~$3.8 billion of debt, which will reduce net leverage significantly to ~3.0x. Additionally, the debt reduction will save ~$200 million in cash interest expense. With the remaining proceeds, GFL will do a $2.3 billion share buyback of subordinated voting shares.

Interestingly, this deal is actually accretive on an EBITDA basis to GFL, which cements the fact that this was a non-core business unit for GFL that needed to be spun out. Additionally, free cash flow conversion will improve because of the EBITDA improvement and the reduction in interest expense.

A $16 billion energy deal plus an $8 billion corporate carveout in the first month of the year? All I can say is: