August 11th - The Week Ahead

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Welcome back! We’re entering the slower parts of earnings at least, but into the final weeks of summer ☹️ Let’s get into it:

The Week Ahead Of Us 🔍

Here’s a look at the earnings coming up next week.

• Monday: Monday.com (of course they’re reporting on a Monday)

• Tuesday: Home Depot, Flutter, On Group, Tencent Music, Madison Square Garden, Intapp

• Wednesday: Cisco, UBS

• Thursday: Walmart, Alibaba, Deere, Tapestry

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The Main Stories 🔍

Fed Rate Cut Expectations may be back down to 25bps: Well that was fast. After Thursday’s better than expected jobless claims, 80% of economists now expect a 25bps rate cut during the Fed’s September meeting. Economists are expecting a coordinated 25bps cut in December and in March meetings as well. It’s also worth noting that 69% of these economists polled are expecting a soft landing.

Leveraged Loan Deals are getting pulled: Last week’s craziness caused some volatility in the leveraged loan market. There were a few notable leveraged loan deals that were pulled from syndication. Ion Analytics shelved a $500mm deal, Focus Financial Partners postponed a $2.65B transaction, and SBA Communications postponed a $2.3B repricing transaction. This is typical during downswings in the market, but now that there’s a little more certainty in the market we’ll have to see if execution improves during the back half of August. At the moment, this looks more issuer specific as opposed to the entire leveraged loan and high yield bond markets closing.

More Headlines 🍿 

• Former YouTube CEO Susan Wojcicki has passed away from cancer at age 56. Wojcicki was an early Google employee, came up with the idea for Google to buy YouTube, and was one of the key female voices in Silicon Valley

• Federal Board Governor Michelle Bowman sees upside inflation risk and urges caution on cutting too quickly. Bowman doesn’t seem ready to cut rates in September, but noted rate cuts will be needed if inflation keeps falling. This echoes her previous comments from late June

• Financial disclosures revealed that democratic Vice Presidential pick Tim Walz owns zero stocks, bonds, real estate, and mutual funds. The bulk of his wealth is in state pensions from his time in the military, as a teacher, and in politics

• JP Morgan is sounding out buyers for discounted PluralSight debt - showing that direct lending debt can get traded on distressed desks just like normal loans and bonds

• Cisco will lay off thousands of workers in their 2nd round of layoffs so far this year. Last February, they cut 4,000 of their 85,000 workers and now are expecting to cut an unquantifiable “thousands” of employees

• Stellantis is laying off over 2,400 workers due to discontinuing Ram’s classic pickup trick line

• Penn Entertainment had a robust earnings beat, with strong growth in the digital segment despite the hefty payments they’re sending Disney for ESPN Bet

• Sweetgreen shares rose after raising their full year guide. They saw better than expected SSS growth and successful cost cutting initiatives

• Monster Beverage shares fell over concerns of rising input costs

• Zillow shares rose after a report of a steady increase in homebuyer activity. Meanwhile, their CEO is being replaced by their COO

• Finastra, a Vista Equity backed company, is evaluating a sale of their capital markets division. Finastra is hoping to fetch at least $2B for the unit

• Our Friend and Finance Blogger Jack Raines is writing a book about what he wish he knew at 23

• A new poll finds that Harris leads Trump in three major election battlegrounds (Michigan, Wisconsin, and Pennsylvania) according to the NYT-Siena Poll

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M&A Transactions💭 

Kama, operator of a bleached cardboard company, has reached a definitive agreement to be acquired for $539.97M by Sveza.

Fourth Partner Energy, manufacturer of solar-energy-based systems, was acquired for $275.0M by DEG, Asian Development Bank, and International Finance Corporation.

PetIQ (NAS: PETQ), a manufacturer and distributor of health and wellness products, has entered into a definitive agreement to be acquired for $1.5B by Bansk Group. Jefferies advised on the sale.

G Therapeutics (NAS: GTHX), a commercial-stage biopharmaceutical company, has reached a definitive agreement to be acquired for $405.0M by Pharmacosmos. Centerview Partners advised on the sale.

CompoSecure (NAS: CMPO), a company that designs and manufacturers premium financial cards, has reached a definitive agreement to be acquired for $372.0M by Resolute. Houlihan Lokey advised on the sale.

Algonquin Power & Utilities entered into a definitive agreement to sell its Renewable Energy Business to LS Power Group for $2.5B. J.P. Morgan advised on the sale.

Grand Stazioni Retail, a provider of commercial leasing and advertising spaces, has entered into a definitive agreement to be acquired for $1.36B by OMERS Infrastructure Management. Cassiopea Partners advised on the sale.

FSG Global, a provider of public relations consultancy services, has entered into a definitive agreement with Kohlberg Kravis Roberts (NYS: KKR) to acquire a $775.0M stake in the business. Goldman Sachs advised on the sale. The Total Valuation is around $1.7B.

The HVAC Division of Johnson Controls International (NYS: JCI) and Hitachi (TKS: 6501) was acquired for $8.1B by Bosch.

Iteris (NAS: ITI), provider of smart mobility infrastructure management solutions, has entered into a definitive agreement to be acquired for $335.0M by AlmavivA. Morgan Stanley advised on the sale.

Private Placement Transactions💭 

IDRx, developer of oncology-based precision therapies, raised $120.0M of Series B venture funding led by Blackstone, RA Capital Management, and Commodore Capital.

Anduril Industries, operator of a defense technology company, raised $1.5B of Series F venture funding led by Sands Capital and Founders Fund at a pre-money valuation of $12.5B.

Altana Technologies, operator of a global supply chain platform, raised $221.4M of Series C venture funding led by US Innovation Technology Fund.

Perplexity, developer of an AI based search engine platform, raised $250.0M of venture funding led by SK Telecom, Camford Capital, and Mana Ventures.

FLYR, developer of a revenue management platform, raised $449.0M of Series D venture funding led by WestCap at a pre-money valuation of $650.0M.

Noteworthy Chart 🧭

Golfcession - Topgolf’s Same Store Sales are pretty poor

Best of YouTube ⌚️

Allianz Chief Economic Advisor Mohamed El-Erian warned that an emergency rate cut would panic the markets

Meme Cleanser 😆 

In Other News:

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