August 18th - The Week Ahead

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Welcome Back!

P.S. - as a reminder, we are collecting resumes for a college intern passionate about the equity markets to support the growth of the newsletter. More details at the bottom of the newsletter.

The Week Ahead Of Us 🔍

Here’s a look at the earnings coming up next week. After last week’s strong retail sale numbers it will be interesting to hear from a lot of retailers next week:

• Monday: Palo Alto, Estee Lauder

• Tuesday: Lowe’s, Medtronic, Toll Brothers

• Wednesday: TJX, Target, Snowflake, Analog Devices, Zoom, Nordstrom, Macy’s

• Thursday: Intuit, TD, Workday, Ross Stores, Baidu, Dollar Tree, Burlington, BJ’s, Cava, Bill, Advance Auto Parts

We should learn a lot about the state of the consumer and discretionary retail spend after this week.

A Message from Rainbook

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The Main Stories 🔍

Problems at Subway: Subway’s new owner, Roark Capital, hosted an emergency meeting with franchise owners to try to figure out how to increase sales and boost traffic. Subway is also looking at potential new promotions they can run.

Sales are estimated to be down 8.7% y/y, high sandwich prices are rubbing consumers the wrong way, and the shops haven’t really been refreshed.

Roark is probably right to be panicked. They acquired Subway in an LBO for $9B earlier this year and worse than expected sales coupled with the high debt load could quickly turn into a nightmare scenario if they get the turnaround wrong.

Idk about you but I can’t remember the last time I actually got a “$5 footlong”. If Subway wants to turn things around, they’re going to need to provide value meals (like McDonald’s just started doing again).

More Headlines 🍿 

• The Relentless Rise of PIK Hints at Trouble to Come for Private Markets

• July retail sales were much better than expected, up 1% vs. estimates of +0.3%

• Vice President Harris released a housing plan that will give first time buyers $25k in housing aid. Critics have been quick to point out that the $25k assistance will just drive home prices higher

• The number of million dollar homes in the U.S. is on the rise - nearly 1 in 10 properties have an estimated value of $1 million or more now

• Fox, Disney, and Warner Brothers were temporarily blocked from launching their sports streaming service

• According to Walmart, the consumer is strong. However, it seems like more wealthier consumers have started shopping more at Walmart in order to save money

• Joe Rogan hosted Peter Thiel on his podcast. Here’s a thread on it so you don’t have to watch a 3.5 hour interview

• More Americans don’t want kids - and money isn’t the main driver. Respondents cite that that they’ve never had interest, or don’t want to deal with the hassle, according to a CNBC study

• Grok’s AI image generator will let you generate almost anything - which leads to some pretty ugly images..

• B. Riley’s founder offers to buy all of the remaining outstanding shares for $7/share

• How more big restaurant chains are rapidly expanding into small town America

• Egg prices are rising once again as bird flu limits supply:

M&A Transactions💭 

Cheney Brothers, distributor of food and grocery products, has reached a definitive agreement to be acquired for $2.1B by Performance Food Group (NYS: PFGC). Morgan Stanley advised on the sale.

Transact Campus, provider of payment processing and campus security, has reached a definitive agreement to be acquired for $1.6B by Roper Technologies (NAS: ROP). William Blair & Company advised on the sale.

Terran Orbital (NYS: LLAP), a manufacturer of satellite products, has reached a definitive agreement to be acquired for $322.65M by Lockheed Martin (NYS: LMT). Jefferies advised on the sale.

Quintain, provider of real estate development services, was acquired for $217.90M by TPG (NAS: TPG).

Portland Natural Gas Transmission System Operation Company, operator of natural gas pipelines, was acquired for $1.14B by Blackrock (NYS: BLK) and Morgan Stanley (NYS: MS). Barclays advised on the sale.

Leading, operator of an online insurance brokerage service, has reached a definitive agreement to be acquired for $430.0M by Healthcare AI Acquisition (NAS: HAIA).

KJ Environment, provider of waste management services, has entered into a definitive agreement to be acquired for $725.82M by EQT (STO: EQT).

Gasib, distributor of liquefied gas catering, has reached a definitive agreement to be acquired for $299.61M by Abastible.

Cemix, manufacturer of construction chemical products, has reached a definitive agreement to be acquired for $815.0M by Saint-Gobain (PAR: SGO). 

PropertyGuru (NYS: PGRU), a property technology company, has entered into a definitive agreement to be acquired for $1.1B by EQT (STO: EQT). Moelis & Company and J.P. Morgan advised on the sale.

Fomo Ventures No1, operator of a mining project, was acquired for $4.5B by Lundin Mining (TSE: LUN).

The Clinical Services Business Unit of Avantor (NYS: AVTR) entered into a definitive agreement to be acquired for $650.0M by Audax Private Equity. J.P. Morgan advised on the sale.

Private Placement Transactions💭 

Re:Build Manufacturing, manufacturer of industrial technology, raised $120.0M of venture funding led by General Catalyst.

Odyssey Therapeutics, operator of a biotechnology company, raised $117.21M of Series C venture funding led by Ascenta Capital.

HistoSonics, developer of a novel, non-invasive sonic beam therapy platform, raised $102.0M of Serie D venture funding led by Alpha Wave Global.

Caresyntax, developer of a data-driven surgical analysis platform, raised $180.0M of Series C venture funding led by Blackrock Innovation Capital Group.

Noteworthy Chart 🧭

A look into Retail Spending holding up well despite consumers being grumpy…

Best of YouTube ⌚️

From Piper Sandler: We forecast a recession which will slow inflation

A Quick Note Before The Memes 📓 

We’re Hiring: We’re looking to bring on a College Junior or Senior to help out with The Wall Street Rollup. This individual must be passionate about the equity markets and curious on how to build a skillset of analyzing earnings. If you’re interested and fit the criteria, please reply or DM.

Meme Cleanser 😆