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Good Friday Morning,
Daylight – Shameless plug. Check out the GSU profile on our M&A Guru Zack Eller. Zack plans to graduate in a month from Georgia State University – and go full-time with us the next day. Not only is he keen on the M&A world, he also formed his own company selling dog treats, all the funds going to animal rescue. We’re really proud.
Management – What’s the most important takeaway from The New York Times expose of Facebook? It just might be this: “A CEO having total, imperial control over a public company is a really, really terrible idea. Not just for investors, or the board, or employees, or customers – but for the CEO themselves.”
Human Resources – Facebook’s headaches are getting to its employees. Morale is reportedly through the floor. Only 52 percent like where the company’s headed. Big drop off from last year when 70 percent said they were proud to work at Facebook. The recovery will take more than just a few positively spun PR pieces, but a total change in culture which includes more transparency and user engagement.
The Economy – The Economist is calling for a “capitalist revolution,” one that reduces profits and restores competition (before Millennials do something even more radical): “Capitalism has suffered a series of mighty blows to its reputation over the past decade. The sense of a system rigged to benefit the owners of capital at the expense of workers is profound. In 2016 a survey found that more than half of young Americans no longer support capitalism. This loss of faith is dangerous, but is also warranted.
“Today’s capitalism does have a real problem, just not the one that protectionists and populists like to talk about. Life has become far too comfortable for some firms in the old economy, while, in the new economy, tech firms have rapidly built market power. A revolution is indeed needed – one that unleashes competition, forcing down abnormally high profits today and ensuring that innovation can thrive tomorrow.”
M&A – Food distributor Schwan’s has been sold to South Korea’s largest food company CJ CheilJedang for $1.8 billion. You might recognize Schwan’s for its home deliveries with gold trucks. Amounts to an 80 percent stake.
From Zack Eller – Penn National Gaming acquired the operations of Greektown Casino-Hotel from Rock Ventures and JACK Entertainment. When you own Detroit’s premier casino-hotel, you can pretty much name your price. It will be interesting to see what Penn National actually paid. Look for this to be a hit in an industry that is hit-or-miss.
Vee Pak acquired Cosmetic Essence Innovations, a provider of fragrance, hair care and skin care products.
American Construction Source acquired Arrow Building Center, a construction goods supplier.
Style – Word of the Day: milieu [milˈyo͞o] noun
a person’s social environment.
Wildfires – Unclear as to when the fires will be contained to any degree. Shares in California power provider PG&E fell 20 percent after it warned it would have to pay boatloads in liabilities, causing a spike in rates. $15 billion in liabilities to be exact. Might be up to the state, customers and taxpayers to cover the damage.
Books – The National Book Award Winners were announced yesterday. Fiction: Sigrid Nunez’s “The Friend.” Poetry: Justin Phillip Reed’s “Indecency.” Nonfiction: Jeffrey C. Stewart’s “The New Negro: The Life of Alain Locke.”
You might be surprised to learn none of the winners get money. But the title National Book Award winner carries so much weight, it opens up more opportunities for lucrative reading/speaking opportunities at universities as well as professorships. Publishing companies will also double-down on promotion for better sales. Also, it can lead to other awards that do pay.
Farming Problems – Trump had to bail out the farmers as a consequence of his various trade wars, particularly with soy since China won’t buy ours. Now the farmers have to scurry around for different markets to buy our farmed goods such as Sri Lanka, which won’t even make a dent.
They’ll need about 11,000 more similar-sized markets. Some farmers are throwing their hands up and getting into politics themselves. Soy and corn are approaching decade lows and falling to nearly half of what they made five years ago.
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Hot – Atlanta banned pet stores from selling cats and dogs. The bill is intended to be a response to the potential puppy/kitty mill problem. Many of those animals end up in shelters and rescue facilities, especially if something is wrong with them.
Marketing – Remember information site About.com? Like AOL, it was once a big deal on the Internet before getting sold a few times and drifting off into irrelevance. A few years ago, Barry Diller’s IAC bought About.com from The New York Times and turned it over to Neil Vogel, who stumbled around for a while before launching one of the more interesting rebrands of recent years.
Among other things, CEO Vogel and his team tossed out much of About’s content, broke it up into individually branded verticals like Verywell (health) and TripSavvy (travel), spent lots of money on fresh content and created what are now some of the most trafficked sites on the internet. You can now hear the inside story of the transformation in an interview – originally aired on SiriusXM’s Mind Your Business – that Loren Feldman did with Vogel.
International – Japan’s newest cybersecurity minister admits to having never used a computer.
Investment Banking – Tecum Capital Partners invested in Converged Security Solutions, a cybersecurity company.
Five Elms Capital invested in Panopta, an infrastructure monitoring solution for the cloud.
IPO – Levi Strauss, the jeans retailer, is planning an IPO of between $600 million to $800 million.
Centrexion Therapeutics, a maker of therapies for moderate to severe chronic pain, postponed its $75 million IPO.
Venture Capital – UiPath, a the Robotic Process Automation (RPA) maker, raised a total of $265 million.
Nikola Corporation, a maker of electric vehicles that is based in Utah and is in litigation with Tesla, raised $210 million.
ServiceTitan, a provider of software for home service businesses, raised $165 million.
Hippo, an insurtech company, raised $70 million.
Standard Cognition, a provider of AI-powered autonomous checkout solutions for brick & mortar retailers, raised $40 million.
Primer, a machine learning firm, raised $40 million.
Italic, a marketplace for unbranded luxury goods, raised $13 million.
Trace Genomics, a developer of AI-enabled diagnostic tools for farmers, raised $13 million.
Pachyderm, an open source enterprise platform raised $10 million.
Automox raised $9.3 million.
Bunch, a social video app for mobile games, raised $4 million.
Spotlight – On December 14, The 704-seat historic Shoals Theater in Florence, Alabama is proud to welcome Grammy-nominated The Secret Sisters to headline a benefit concert for A New Beginning, a non-profit dedicated to helping women recover from opioid and alcohol abuse. Hosted by Oxford Center Founder Cliff Oxford, the benefit will also feature local Shoals favorites Fathers and Sons. All proceeds go to A New Beginning.
And that’s what’s ahead.