What You Need To Know for March 6th

Welcome back!

The zigging and zagging of tariff decisions makes following the markets more important than ever. Luckily, we’ve got you covered, and happy to have you on board 🤝 

Lets get into it.

Earnings Corner 📜 

Trending Up 📈 

On Holdings (ONON) reported earnings that beat estimates, with sales up 32% y/y. Mgmt. noted that the company has “remarkable brand momentum” coming into 2025 and projects 27% annual sales growth. Tariffs present a small threat to the company, although On sources no products from Canada or Mexico and only 7% from China. The stock was up 3.85%

Flutter Entertainment (FLUT) reported earnings that beat estimates. The world’s largest online gambling company also projected revenue growth of 13% and profits to increase by 35%. The stock was up 1.55%

Trending Down 📉 

Target (TGT) reported earnings that beat estimates with revenue of $30.92B down 3% y/y (vs. $30.82B expected) and EPS of $2.41 (vs. $2.26 expected). Mgmt. projected FY 2025 EPS of $8.80-$9.80 (vs. $9.31 expected) and warned of a rough Q1 with “meaningful year-over-year profit pressure... relative to the remainder of the year,” while analysts had expected 0.9% earnings growth. Target saw soft customer demand in February, which mgmt. attributed to low consumer confidence and uncharacteristically cold weather. The stock is down 4% since results.

Best Buy (BBY) reported earnings that beat estimates, with comparable sales up 0.5% y/y. However, mgmt. warned that price increases are “highly likely” in the wake of President Trump’s tariffs, with China and Mexico supplying 55% and 20% of the company’s products. The stock was down 12.4%

CrowdStrike (CRWD) reported earnings that beat estimates, with revenue of $1.06B up 25% y/y (vs. $1.03 expected) and EPS of $1.03 (vs. $0.86 expected). For FY 2025, mgmt. projected EPS of $3.33-$3.45, much less than analysts’ estimates of $4.42. Crowdstrike is still dealing with some overhang related to the security lapse from last year. The stock was down 6.3%

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Today’s Headlines 🍿 

• Trump Takes Back Tariffs. A day after the President imposed a blanket 25% tariff on all products from Mexico and Canada, the White House announced that it would give carmakers a one month reprieve. The partial retreat came after a meeting between Trump and executives at GM, Ford, and Stellantis

• Germany announces a massive spending spree. With the U.S. retreating in Europe, Germany has quickly assembled a fiscal expansion plan. With government agreements to ramp up infrastructure and defense spending announced, the 10-year yield on the Bund jumped, driving up borrowing costs to 28 year highs

• The Euro Defense Contractor Rally cooled. After a massive rally driven by Trump distancing the U.S. from Ukraine, European defense contractors have come down to earth slightly

• Carlyle’s CEO tells the market to “buckle up”. In a Bloomberg interview, CEO Harvey Schwartz told investors to get ready for tariff uncertainty, and potential inflation. Wall Street Execs voiced to Bloomberg a message on how uncertainty could slow down economic activity and planning

• BlackRock is acquiring the Panama Canal? The Hong-Kong conglomerate which operates ports near the canal is selling its shares to a BlackRock led consortium in a $23B deal, giving the American asset management giant control over 43 ports in 23 countries around the world

• Musk gets reined in. Republican Senators have warned Elon that any DOGE actions will require Congressional approval. The announcement potentially slows down DOGE’s progress in cutting the budget, with the Supreme Court also rejecting a bid to freeze nearly $2B in foreign aid

• The U.S. Sovereign Wealth Fund has its leader. Michael Grimes, a former top banker at Morgan Stanley will lead this new venture. Grimes regularly advised Musk and his companies, as well as several other TMT giants during his time at MS

• Sponsors are losing some steam. Private equity officially shrank for the first time in decades, with AUM falling 2%. Down from $4.7T in total assets last year, PE shops are struggling to return funds to investors and raise fresh capital

• Meanwhile, Private Equity is increasingly investing in Accounting firms. Due to aging partnerships, the opportunity to deploy AI, and fragmentation, PE is getting involved in the space. The MiddleMarket took a look at this trend here

• CoreWeave is going public. The company, which sells cloud-based processors from Nvidia, has begun IPO paperwork at a possible $4B valuation. While revenue of nearly $2B is solid, Microsoft makes up a resounding 62% of their revenue.

• Walgreens may be going private. Sycamore Partners is reportedly ready to pay $10B in cash for the drugstore chain. If the deal goes through, Sycamore is going to hold onto the core U.S. retail business and spin off the rest

• Citi’s Fat Fingers. Citi almost sent $6B to a customer’s account by accident due to a manual copy and paste error. The blunder comes a week after a similar $81T mistake at the bank made headlines

• Kroger’s CEO has resigned. After more than four decades at the grocery chain, starting as a part-time stock clerk, Rodney McMullen was ousted after an investigation revealed “personal conduct” which was “inconsistent” with company ethics

• Ares alum is launching a $2B fund. Formerly the co-head of PE and special opportunities at Ares and a 15-year veteran of Oaktree, Scott Graves sold a minority stake in the new Lane42 fund to Millennium

• The VA is cutting 70k staff. Secretary of Veterans Affairs Doug Collins announced his ambition to bring down total staffing at the agency to 398k, without reducing healthcare or benefits for veterans and beneficiaries

• Trade fears can’t keep Tim Cook down. Despite experts predicting price hikes on electronics after Trump’s tariffs went into effect on Tuesday, Apple announced a $100 cut to its Macbook Air

• Walmart is the everything store. A new profile piece charts how, under CEO Doug McMillon, the mega-retailer has expanded in e-commerce to compete with Amazon, diversified products to attract wealthier consumers, and build an Apple-esque campus in Arkansas

M&A Transactions💭 

Willhaben, developer of an advertising marketplace application, has entered into a definitive agreement to be acquired for $259.5M by Sprints. LionTree advised on the sale.

Viavi Solutions (NAS: VIAV) reached a definitive agreement to acquire The High-Speed Ethernet and Network Security Testing Business of Spirent Communications (LON: SPT) for $425.0M.

The Datacenter Business of Proximus Group (BRU: PROX) was acquired for $133.23M by Datacenter United.

Preqin, developer of alternative asset-related financial database, was officially acquired for $3.19B by BlackRock (NYS: BLK). EV/Revenue was 13.31x. Bank of America, J.P. Morgan, Morgan Stanley, Goldman Sachs, and Wells Fargo advised on the sale.

Payfare, a fintech company offering digital banking, was successfully acquired for $141.44M by Fiserv (NYS: FI). EV/EBITDA was 8.72x and EV/Revenue was 0.89x. Blair Franklin Capital Partners advised on the sale.

Motel One, operator of a hotel chain, has entered into a definitive agreement to be acquired for $2.91B by PAI Partners. The potential transaction values the company at $3.64B.

Identity Automation, developer of identity and access management, has reached a definitive agreement to be acquired for $215.0M by Jamf (NAS: JAMF). Macquarie Capital advised on the sale.

Heubach, manufacturer of pigment preparation, was acquired for $132.71M by Sudarshan Chemical Industries (BOM: 606655). Lazard advised on the sale.

The Fund Management Business of GLP Capital Partners was acquired by Ares Management (NYS: ARES) for $5.2B. The company will receive a contingent payout of $1.5B upon completion.

Edison Stoccaggio, operator of storage facilities, was acquired for $582.88M by Snam (MIL: SRG). EV/EBITDA was 1.04x. IMI Corporate & Investment Banking and Lazard advised on the sale.

Blis Global, developer of a digital advertising platform, was acquired for $175.0M by T-Mobile US (NAS: TMUS). Houlihan Lokey advised on the sale.

AOC Resins, producer and supplier of resins, was acquired for $4.35B by Nippon Paint Holdings (TKS: 4612). Citigroup, and Morgan Stanley advised on the sale.

Woodruff-Sawyer & Co., provider of insurance brokerage and risk management services, has reached a definitive agreement to be acquired for $1.2B by Arthur J. Gallagher & Company (NYS: AJG). EV/EBITDA was 13.64x and EV/Revenue was 4.48x.

Weights & Biases, developer of a dataset optimization system, reached a definitive agreement to be acquired for $1.4B by CoreWeave (NAS: CRWV). Qatalyst Partners advised on the sale.

TopBloc, provider of consulting services, was acquired for $340.0M by ASGN (NYS: ASGN).

Sundyne, manufacturer of precision centrifugal pumps, reached a definitive agreement to be acquired for $2.16B by Honeywell (NAS: HON).

Panama Ports, provider of port and logistics services, has entered into a definitive agreement to be acquired for $23.0B by Terminal Investment, Global Infrastructure Partners, and BlackRock.

OrderYOYO (CSE: YOYO), a European company that offers a usage-based SaaS online ordering, payment, and marketing software, has entered into a definitive agreement to be acquired for $165.67M by Pollen Street Capital. Stifel Financial advised on the sale.

InterContinental Auckland, operator of a hotel, has reached a definitive agreement to be acquired for $102.15M by Hotel Properties (SES: H15).

Instinct Brothers, developer of regenerative medicine, has reached a definitive agreement to acquire Relativity Acquisition through a reverse merger.

I’rom Group, a Japan based company engaged in provision of medicinal treatment, was acquired for $231.11M by Blackstone, Mr. Toyotaka Mori, and its management. EV/EBITDA was 17.53x and EV/Revenue was 1.94x.

The Bottling Operations of Coca-Cola India was acquired for $229.67M by Kandhari Global Beverages.

Aluflexpack, provides flexible packaging and solutions, was acquired for $272.0M by Constantia Flexibles.

Rimi Baltic, operator of supermarket chain, reached a definitive agreement to be acquired for $1.35B by Salling Group.

MG Capital, operator of a financial institution, was acquired for $322.64M by National Agricultural Cooperative Federation.

Lionmark Construction Companies, provider of construction and material services, was acquired for $238.0M by Breedon Group (LON: BREE). EV/EBITDA was 7.68x and EV/Revenue was 0.97x.

Chimerix (NAS: CMRX), a biopharmaceutical company, reached a definitive agreement to be acquired for $935.0M by Jazz Pharmaceuticals (NAS: JAZZ). EV/Cash Flow was 98.14x. Centerview Partners advised on the sale.

Private Placement Transactions💭 

Zhipu AI, developer of an AI large language model platform, raised $1.26B of venture funding from Hangzhou Chengtou and Hangzhou Shangcheng Investment.

Pulnovo Medical, developer of pulmonary hypertension ablation catheter and instrument, raised $100.0M of Series C venture funding led by Lilly Asia Ventures and Qiming Venture Partners.

Callio Therapeutics, developer of a multi-payload antibody-drug, raised $187.0M of Series A venture funding led by Frazier Healthcare Partners.

Anthropic, developer of a large language model platform, raised $3.5B of Series E venture funding in a deal led by Lightspeed Venture Partners at a pre-money valuation of $58.0B.

Endless, developer of a cloud-based protocol development platform, raised $110.0M of venture funding from Foresight Ventures and other undisclosed investors at a pre-money valuation of $890.0M.

Odds of the Day 🍒 

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