What You Need To Know For April 25th

Does the Noncompete Impact You? Meta Earnings and a new Private Credit deal.

Author

HY Harry
April 25, 2024

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Welcome back! Let’s get into some recent Tech earnings, plus the latest headlines and transactions.

Headlines 🔍

  • Meta’s guide disappoints: Meta's stock was down more than 15% at the time of writing after giving the market a lower than expected 2Q revenue guide and signaling that they’re going to invest more heavily in capex. Revenue of $36.46B beat expectations of $36.16B and EPS of $4.71 beat expectations of $4.32. Meta projects 2Q24 sales between $36.5B and $39B, with a midpoint of $37.75B, falling short of analysts' $38.3B estimate. Moreover, capital expenditures for 2024 are expected to rise to $35B-$40B, up from the previous forecast of $30B-$37B, to support AI initiatives. If you trust Meta’s ability to execute in the AI space, this could be an opportunity - but if you think the AI buzz got out of control…then maybe you’re among the investors jumping ship right now.

  • Tesla rebounded: Tesla had solid earnings, despite a revenue miss ($21.3B in revenue, down 9% y/y and lower than expectations of $22.15B) and an EPS miss (45 cents vs. 51 cents expected). Tesla shares rose 12% yesterday on their plans to accelerate lower priced models to as soon as later this year. Elon also emphasized his belief that Tesla will solve the creation of self-driving, autonomous vehicles. There’s still a lot of headwinds they’re facing - with Tesla slashing Chinese EV prices PLUS recent Cybertruck recalls. However, Elon called out that now is not the time for industry participants to retreat from investing in EVs…time will tell if he’s right about that.

  • The FTC’s Noncompete Ban may not be for you: While Twitter celebrated the FTC’s ban on noncompetes for employees, we noticed that workers who 1) make more than $151,164 annually and 2) are in “policy-making positions” are not a part of this banning. The FTC expects that policy-making definition to apply to <0.75% of the 30mm workers who were under a noncompete. The FTC is banning non-competes for the average every day person, but this may not be applicable if you’re a finance professional and if that “policy-making position” definition is covers you here. The term is defined as “final authority to make policy decisions that control significant aspects of a business entity or common enterprise and does not include authority limited to advising or exerting influence over such policy decisions or having final authority to make policy decisions for only a subsidiary of or affiliate of a common enterprise.” On that read…it sounds like entry level and mid level finance pros, and even business reporting segment leaders will be safe! However, expect challenges in the courts, with the Chamber of Commerce already suing the FTC over the noncompete ban. Here’s the FTC’s full press release.

  • Private Credit and Beyond Meat might collab. Goldman is sounding out direct lenders to commit $250mm of senior secured financing to Beyond Meat.

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Transactions: M&A 💭 

  • Tyman (LON: TYMN), an operator in the materials industry, has entered a definitive agreement to be acquired for $1.1B by Quanex Building Products (NYS: NX). Deutsche Numis and Greenhill & Company advised on the sale.

  • Reunion Gold (TSX: RGD), a Canadian gold exploration and development company, has reached a definitive agreement to be acquired for $641.09M by G Mining Ventures (TSE: GMIN). BMO Capital Markets advised on the sale.

  • Ozon.ru, operator of an e-commerce platform, has reached a definitive agreement to be acquired for $151.9M by Roemer Capital.

  • Nehring Electr5ical Works, manufacturer of wire and cable products, has reached a definitive agreement to be acquired for $600.0M by Mueller Industries (NYS: MLI).

  • Citibank’s Philippines Credit Card Business Business Unit was acquired for $971.0M by Aboitiz (PHS: AEV).

  • Suzhou Ahbo Precision Cutting Tool Technology, a manufacturer of precision tools, has reached a definitive agreement to be acquired for $203.23M by Sandvik (STO: SAND).

  • Seagate Technology’s System-On-Chip Operations Business Unit was acquired for $600.0M by Avago Technologies.

  • Hibbett Sports (NAS: HIBB), retail sporting goods company, has reached a definitive agreement to be acquired for $1.1B by JD Sports Fashion (LON: JD.). Solomon Partners advised on the sale.

  • Fisher Brown Bottrell Insurance, provider of insurance services, has reached a definitive agreement to be acquired for $345.0M by Marsh McLennan Agency. Morgan Stanley advised on the sale.

  • Enovation, a healthcare integration and robotic process automation platform, was acquired for $537.65M by Legrand (PAR: LR).

  • Drone Racing League, a drone racing competition, has reached a definitive agreement to be acquired for $250.0M by Infinite Reality.

  • Turbine Controls, a provider of aftermarket maintenance, repair, and overhaul support catering to complex aircraft engine components, was acquired for $120.0M by VSE (NAS: VSEC). RBC Capital Markets advised on the sale.

  • Gram Car Carriers (OSL: GCC), a tonnage provider with a fleet of distribution vessels, has reached a definitive agreement to be acquired for $$704.11M by MSC Mediterranean Shipping Company.

Transactions: Private Placements 💭

  • Skild, an operator of an engagement and expert guidance platform, has raised $300.00M of venture funding led by Coatue Management and Lightspeed Venture Partners at a pre-money valuation of $1.2B.

  • Xaira Therapeutics, operator of an integrated biotechnology company, has raised $1.0B of venture funding led by ARCH Venture Partners and Foresite Labs.

  • Tines, a developer of a workflow automation platform, has raised $131.08M of Series B venture funding led by Accel, Felicis, and Addition.

  • HarperCrewe, a manufacturer of houses intended to build and design sustainable homes, has raised $250.86M venture funding led by Ridgeback Group, and Angelo and Gordon & Co.

  • Endeavor BioMedicines, an operator of a clinical stage company committed to developing new treatments targeting the underlying causes of pulmonary fibrosis, has raised $132.5M of Series C venture funding led by Matrix Capital Management.

Noteworthy Chart 🧭

Deal Count and Deal Volume via Pitchbook

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Meme Cleanser 😆 

Until Next Time!