Good Tuesday Morning,
Daylight – Today at 11 a.m., Boston will celebrate New England’s Super Bowl victory with a parade that rolls through the streets of what they call the Back Bay. Atlantans, think of what we called Buckhead Beach back in the day before we turned out the lights to having an entertainment district. Moving on. In typical Boston fashion, players and coaches will ride in duck boats, the World War II-era amphibious vehicles that are popular with tourists viewing the city sights.
Style – You know the one good thing I really like about America is that we put a big difference on winning and losing. No runner-up Peachtree party. We should keep winning and losing as clear cut in our companies.
M&A – Hudson’s Bay Co. is in early-stage talks with Macy’s to acquire the company. At this point, Hudson Bay is not even on first base to get the deal off the ground. Both sides have agreed to sit down and talk. However, there is a 55 percent chance this deal gets done. The bottom is falling out of Macy’s mid-quarter numbers.
Klarna, an online payment company, acquired BillPay, a provider of online payment options for retailers, from Wonga, a provider of short-term credit and financing services for businesses (the company was accused of issuing predatory loans in 2012).
Nextdoor, a social networking site for neighborhoods, acquired Streetlife, a social network that connects local residents and businesses.
Economics – You might not know him, but Seth A. Klarman isn’t known as the “Oracle of Boston” – no, that’s not Belichick – for nothing, and the Oracle of Omaha, Warren Buffett, heaps rare praise on him as a hedge fund manager. No surprise that Mr. Klarman’s private letter to investors last week about investing in the age of Trump has become hot reading for every financial geek within a thousand miles of Wall Street – if you can get your hands on it.
Hedge Funds – Here is the deal – Klarman’s past book on investing is $3,500 new or $750 used on Amazon, and he manages a $34 billion dollar fund that makes money over money year-over-year for the past 34 years. Here is the gist of the letter about Trump and the stock market – short term gain – long term pain, but I didn’t read into it that he was predicting a huge financial disaster – just said protectionism will not work, and it will cause equities to decline materially. Since Trump’s election, Klarman has invested $12 billion into the stock market and made nice gains. George Soros has lost a billion, waiting for the market to fall.
Live Rounds – Yesterday, I received hate mail from quite a few about my comment that the NYTimes’ new business model was to make money on the anti-Trump sentiment. They noticed a trend – the more biased they are, the more subscriptions they sell. Don’t take my word for it – see the NYTimes advertisement for more subscriptions – “No Alternatives – Just the Facts” – blatant.
Hot – Uber hires ex-NASA engineer, Mark Moore, to head aviation engineering in a new company division, called Elevate Uber, to produce flying cars. Uber first signaled its interest in short-range “vertical takeoff and landing (VTOL) technology” in October when it published a white paper – by the way, still a great idea for Entrepreneurial companies who are thought-leaders, discussing the potential for on-demand aviation to transform the daily commute.
Culture – Tiffany & Co. canned its CEO Sunday, and it wasn’t in a blue box with a ribbon tied around it – it was more like “get your stuff and get out the door.” They fired Frederic Cumenal at 4:30 p.m., two hours before the Super Bowl where Tiffany ran a lackluster Super Bowl ad. Do you think $5 million had something to do with it?
Buzzard’s Roost – Tiffany’s 2016 December sales were down four percent from the previous year in America. By the way, the sales were down 14 percent at its flagship store on 5th Ave., which sits directly next to the Trump Tower with security and blockades bussing around it after the election. Not a good year.
Investment Banking – Eastern Outfitters, a holding company whose brands include Bob’s Stores and Eastern Mountain Sports, filed for bankruptcy protection. Sports Direct International is considering a stalking-horse bid in the company’s bankruptcy auction. Eastern Outfitters is owned by Versa Capital Management, which acquired the retailer last year when Eastern Outfitter’s former owner, Vestis Retail Group, filed for bankruptcy.
Deal Stream>>>>>>>>>>>>>>>>>>>>>
Exits – Avery Dennison agreed to buy Yongle Tape Company, a manufacturer of PSA products and insulation tapes, from the company’s management and ShawKwei & Partners for $190 million, with an additional $55 million in performance-related incentives.
Venture Capital – Comprehend Systems, a provider of intelligence applications for clinical operations, raised $15 million.
TerrAvion, a provider of aerial imagery services for farmers, raised $10 million.
SubVRsive, a virtual reality startup, raised $4 million.
Jobaline, an engagement platform for hourly workers, raised $3.5 million.
Virtualitics, a platform that combines artificial intelligence, big data, and virtual reality to help users understand data, raised $3 million.
FM:Systems, a provider of workplace management software, raised an undisclosed amount in funding from Accel-KKR.
SCUF Gaming, a manufacturer and seller of controllers and other accessories for video games, raised an undisclosed amount in funding from H.I.G. Growth Partners.
Private Equity – Morgan Stanley Capital Partners invested in Fisher Container, a manufacturer of plastic films and bags.
Stonepeak Infrastructure Partners agreed to acquire a majority stake in Cologix, a data center and interconnection solutions provider.
Convergint Technologies, a provider of integration services for electronic security, fire safety, and building automation systems, acquired Post Browning, a provider of consultation, installation, and maintenance services for the retail banking industry.
StackPath, a cybersecurity company, acquired Highwinds, a content delivery network specialist. StackPath raised nearly $180 million in funding, including $150 million from ABRY Partners.
Career Step, an online provider of corporate training for the healthcare industry, acquired the revenue capture and coding and documentation divisions from Panacea Healthcare Solutions, a provider of coding, compliance, technology and financial advice to healthcare providers.
Welsh, Carson, Anderson & Stowe has made an additional investment in Revel Systems, a provider of point-of-sale technology.
And that’s what’s ahead, Cliff
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