July 7th - The Week Ahead

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The Week Ahead Of Us 🔍

We’re approaching 3Q earnings season, with JP Morgan kicking us off on Friday, but have a few late earnings reporters on Thursday.

• Thursday: Pepsi, ConAgra, Progressive, and Delta Airlines.

• Friday: JP Morgan, Wells Fargo, Citi, Bank of NY Mellon, and Ericsson.

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The Main Stories 🔍

Unemployment rises to 4.1%, June job growth slows: An argument for a September rate cut is now on. Unemployment rose to 4.1%, up from 4.0% m/m and vs. consensus of 4%, while 206k jobs added beat consensus of 200k, but was slower than May’s job gains of 272k. Additionally, job growth was predominately led by a rise in part-time jobs, with full time jobs falling by -28k in June.

This cooling off led treasury yields down on Friday, and drove discussion that two rate cuts, with one in September, could be in play this year. Goldman’s Chief Economist for example thinks a September Rate Cut is on the table.

The latest with Paramount: It looks like a merger with Skydance may be back on and an announcement may be coming imminently. We’ll await for more details, but a 45 day “go shop” period will be in effect, which might open the door back up for Apollo and SONY if they become interested again. Paramount was looking to sell BET for $1.6B, but it’s unclear whether this process is ongoing with the Skydance transaction or not. Either way, this is quite the haircut from the $3B price they paid back for BET in 2001.

The Real Life Gatsby? Michael Rubin’s star studded White Party in the Hamptons caught the eye of a lot of people. The founder of Fanatics, a sports apparel and merch retailer valued at $31B, is known for inviting athletes, actors, and other high powered celebs to this annual July 4th bash.

More Headlines 🍿 

• Steve Ballmer’s net worth just passed Bill Gates’s net worth for the first time ever. Ballmer was the former CEO of Microsoft, and not even a founder! While Gates diversified out of Microsoft stock over time, Ballmer’s continued ownership has skyrocketed his net worth. Ballmer’s $157B net worth primarily includes Microsoft shares (he also owns the LA Clippers though), while Bill Gates has a relatively diversified $156B portfolio

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• Rates and SOFR were grinding higher (prior to the Friday Jobs numbers)

• Altice Lenders have agreed to an 18-month co-op agreement. This “banding together” of creditors makes it harder for the Company to pit lenders against lenders in a restructuring scenario

• HPS won a fight to replace the board of Chicken Soup for the Soul, the owner for the Redbox movie rental company. This comes shortly after Chicken Soup for the Soul filed for bankruptcy, owing lenders such as HPS nearly $1 Billion

• Saks Fifth Avenue is acquiring Neiman Marcus for $2.7B. The merger of two of the largest department stores in the US, with involvement from Amazon and Salesforce, is a bet that scale and tech can revitalize a struggling business model. However, regulatory hurdles remain, as recently the Federal Trade Commission sued to block Tapestry’s merger with Capri.

• Constellation Brands fell after earnings due to softer than expected Corona sales. While Q1 profit came in ahead of estimates and demand for its core beer brands remains fairly resilient, the beer business witnessed a 6.4% depletion in volume growth (versus 5.5% growth last year). In the US, its wines and spirits business, along with the consumer industry at large, faced a slowdown.

M&A Transactions💭 

Radionetics Oncology, operator of a biopharmaceutical company, was acquired for $8.0B by Eli Lilly and Company (NYS: LLY). 

Preqin, developer of alternative asset-related financial database platform, has reached a definitive agreement to be acquired for $3.24B by BlackRock (NYS: BLK). Goldman Sachs advised on the sale.

The Assets of Whitbread, a portfolio of 1,000 bed purpose-built student accommodation sites, were acquired for $571.76M by Student Roost.

Unidom Participacoes, provider of educational services, was acquired for $122.54M by Afya Educational (NAS: AFYA).

U Square, operator of a commercial property, was acquired for $507.71M by Gwangjushinsegae (KRX: 037710).

The upstream assets of Tellurian (ASE: TELL) were acquired for $260.0M by Aethon Energy Management. Lazard advised on the sale.

Suzhou Precision Machining Technology Company, manufacturer of precision tools, was acquired for $203.39M by Sandvik (STO: SAND).

StreamSets, developer of data integration platform, was acquired for $2.13B by International Business Machines (NYS: IBM).

Spirit Aero Systems (NYS: SPR), manufacturer of aerostructures, has reached a definitive agreement to be acquired for $4.7B by Boeing (NYS: BA). Moelis and Morgan Stanley advised on the sale.

Shopko Optical, operator of eye-care centers, was acquired for $290.0M by Fielmann Group (ETR: FIE). Jefferies advised on the sale.

Serneke Sverige, provider of construction services, has entered into a definitive agreement to be acquired for $142.88M by Mutares (BER: MUX). ABG Sundal Collier advised on the sale.

Precision Optical Technologies, developer of optical transceivers, was acquired for $290.0M by Belden (NYS: BDC).

Petroleum Geo-Services, provider of images and 3D models of thee subsurface beneath the ocean floor, has reached a definitive agreement to be acquired for $875.18M by TGS (OSL: TGS). Pareto Securities advised on the sale.

Peoplesbank, A Cordorus Valley Company (NAS: CVLY), a bank holding company, was acquired for $207.0M by Orrstown Financial Services (NAS: ORRF). Keefe, Bruyette & Woods advised on the sale.

NetCo, operator of a telecommunications network grid, was acquired for $2.37B by Kohlberg Kravis Roberts (NYS: KKR). Mediobanca, Goldman Sachs, and Vitale & Co advised on the sale.

Mueller, manufacturer of pre-engineered metal roofing, has entered into a definitive agreement to be acquired for $475.0M by Cornerstone Building Brands. Houlihan Lokey advised on the sale.

Millicom International Cellular (NAS: TIGO), provider of wireless and fixed-line telecom services, has reached a definitive agreement to be acquired for $8.96B by Atlas Investissement. BNP Paribas, Morgan Stanley, and Goldman Sachs advised on the sale.

Omaha Beach Capital entered into a definitive agreement to acquire the military housing business of Lendlease for $318.84M.

The personal protective equipment business unit of Kimberly-Clark (NYS: KMB) was acquired for $640.0M by Ansell (ASX: ANN).

The medical device components business of Johnson Matthey (LON: JMAT) was acquired for $700.0M by Montagu Private Equity. Goldman Sachs advised on the sale.

Idealista, operator of an online property portal, was acquired for $3.12B by Cinven. Morgan Stanley advised on the sale.

GoCanvas, developer of cloud-computing SaaS platform, was acquired for $700.0M by Nemetschek Group (ETR: NEM). Moelis & Company advised on the sale.

Globeducate, operator of a chain of private educational organizations, has entered into a definitive agreement to be acquired for $672.60M by Wendel Group (PAS: MF). Rothschild advised on the sale.

Galimmo, a real estate company, was acquired for $316.39M by Carmila (PAR: CARM).

FNCB Bank, a bank holding company, was acquired for $129.0M by Peoples Financial Services (NAS: PFIS). Stephens advised on the sale.

Fairjourney Biologics, provider of biopharma contract research, has entered a definitive agreement to be acquired for $996.52M by Partners Group (SWX: PGHN). JP Morgan advised on the sale.

EndoGastric Solutions, developer of surgical technology, was acquired for $105.0M by Merit Medical Systems (NAS: MMSI).

Baby Memorial Hospital, operator of a multispecialty hospital, has entered into a definitive agreement to be acquired for $300.0M by Kohlberg Kravis Roberts (NYS: KKR).

Atlantic Carbon Group, operator of an anthracite mining and processing company, was acquired for $122.4M by PT Delta Dunia Makmur (IDX: DOID).

The energy and marine insurance business in Copenhagen of Alm. Brand (CSE: ALMB) has reached a definitive agreement to be acquired for $230.95M by Gard. Danske Bank advised on the sale.

 Ai Transportation Acquisition (NAS: AITR), a blank check company, has reached a definitive agreement to be acquired for $170.0M by American Metals. ARC Group advised on the sale.

Aera Energy, operator of an oil and gas production firm, was acquired for $2.1B by California Resources (NYS: CRC). Truist and Wells Fargo advised on the sale.

Yvon Building Supply, manufacturer and distributor of building products, was acquired for $143.33M by Gypsum Management & Supply (NYS: GMS).

MultiSafepay, developer of an online payment ecosystem, was acquired for $200.0M by Ant Group.

Maersk Supply Service, provider of marine services, has entered into a definitive agreement to be acquired for $1.11B by DOF Group.

Kuvare Asset Management, provider of asset management and related services, was acquired for $1.0B by Blue Owl Capital (NYS: OWL). JP Morgan and RBC Daniels advised on the sale.

Hi-Bio, developer of precision medicines, was acquired for $1.15B by Biogen (NAS: BIIB). Goldman Sachs advised on the sale.

FiberCop, operator of a digital fiber network, was acquired for $471.94M by Kohlberg Kravis Roberts (NYS: KKR).

Everbridge, a software company, was acquired for $1.8B by Thoma Bravo. Qatalyst Partners advised on the sale.

Encore Wire (NAS: WIRE), manufacturer of electrical building wire, was acquired for $3.9B by Prysmain Group (MIL: PRY). JP Morgan advised on the sale.

CoverFlexx Group, manufacturer and seller of automobile paint, was acquired for $295.0M by Axalta Coating Systems (NYS: AXTA). Robert W. Baird & Co advised on the sale.

The industrial fire business of Carrier Global (NYS: CARR) was acquired for $1.43B by Sentinel Capital Partners. JP Morgan and Goldman Sachs advised on the sale.

Arquus, manufacturer of armed defense range vehicles, was acquired for $322.73M by John Cockerill.

15-07 Kaybob Complex, a portfolio of natural gas producing facilities, was acquired for $306.35M by Pembina Gas Infrastructure.

Viatris, manufacturer of over-the-counter drugs, was acquired for $2.17B by Cooperation Pharmaceutique Francaise.

Varsity Brands, operator of a sports apparel agency, has entered into a definitive agreement to be acquired for $4.75B by Kohlberg Kravis Roberts (NYS: KKR).

USA Group, manufacturer of customized small precision metal parts, was acquired for $161.31M by Kutxabank, Mondragon, Stellum Capital, Ekarpen Private Equity, Ezten Venture Capital Fund, and Spri Group.

Neiman Marcus Group, operator of a luxury fashion retail company, has reached a definitive agreement to be acquired for $2.65B by Hudson’s Bay, Amazon.com (NAS: AMZN), and Salesforce (NYS: CRM). Lazard advised on the sale.

LifeLabs, provider of laboratory testing services, has reached a definitive agreement to be acquired for $985.0M by Quest Diagnostics (NYS: DGX). Evercore advised on the sale.

Desktop Metal (NYS: DM), manufacturer of 3D printers, has reached a definitive agreement to be acquired for $183.0M by Nano Dimension (NAS: NNDM). Stifel advised on the sale.

Vidrala Italia, manufacturer of glass containers, was acquired for $247.26M by Verallia (PAR: VRLA). 

SciAps, manufacturer of portable analytical instruments, has reached a definitive agreement to be acquired for $260.0M by Spectris (LON: SXS).

Prejeance Industrial, provider of renewable energy investment services, was acquired for $140.0M by Altarea (PAR: ALTA).

D&T, manufacturer of custom displays, has entered into a definitive agreement to be acquired for $124.91M by Highland Equity Partners.

The office block of AMF Fastigheter was acquired fir $283.81M by KPA Pension.

 Mademoiselle Desserts, producer and distributor of frozen industrial finished and demi-finished pastries, has reached a definitive agreement to be acquired for $967.33M by Emmi (SWX: EMMN).

Private Placement Transactions💭 

SmartHR, developer of cloud human resources software, raised $135.34M of Series E venture funding led by Teachers’ Venture Growth and Kohlberg Kravis Roberts.

Purplle, operator of an online shopping marketplace, has raised $120.0M of venture funding led by Abu Dhabi Investment Authority at a pre-money valuation of $1.18B.

Beacon Therapeutics, operator of a clinical-stage biotechnology company, has raised $170.0M of Series B venture funding led by Forbion.

OYO Rooms. operator of a hotel booking platform. raised $416.85M of Series G venture funding led by InCred Wealth and Pivot Ventures at a pre-money valuation of $1.56B.

Noteworthy Chart 🧭

From CarbonFinance, a look into the largest European publicly traded companies.

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