Good Friday Morning,
Daylight – This came out of nowhere yesterday – Shake Up at Shake Shack – CFO Jeff Uttz said he will retire in mid-March. Founder Danny Meyer countered that negative news with the promotion of Zach Koff to COO from SVP operations. Zach has led Shake Shack’s operations since the opening of the fourth location (Miami Beach, Fla) in June 2010. Shake Shack executives went way out of their way yesterday to say CFO Uttz will be a “co-presenter” with the CEO at next week’s ICR conference – just a great PR way to say no hard feelings. When CFOs leave, analysts and banks get pinched up about two things: are there bad feelings in top ranks, because if the CFO is not happy, nobody’s happy, and do they know something bad is coming around the corner? Shake Shack also said yesterday they opened 20 new locations last year versus 19 planned and said it remained “comfortable” with its guidance for store growth sales. Shake Shack also spent a great deal of time talking about its digital strategy combined with delivery. All stores are being trained on its new app, where a customer can get delivery or order on-demand, so there will be no line. Internally, Shake Shack thinks the app might double the rate of its planned sales growth, although they are not whispering a word of this to Wall Street. They also know the app could “blow up” the magnificent operating machine that Shake Shack built.
Live Rounds – Yale Associate Dean, Jeffrey Sonnenfeld, had Danny Meyer at his renowned CEO conference, where Meyer had to defend if Shake Shack was just Steak and Shake with higher prices and lower quality of milk shakes. During his talk, Meyer had 150 milkshakes delivered to every attendee.
Hot – Alec Baldwin asked Howard Schultz’s in his last interview as CEO of Starbucks – What food company did he see out there coming up as another Starbucks? Schultz said, “I like what Danny Meyer is doing at Shake Shack and In and Out – those bathrooms are clean.” If we had to pick the Entrepreneur who did the most the longest, Schultz would get that crown.
M&A – Gartner Group has agreed to acquire CEB Inc. for $2.6 billion.
Amazon and Forever 21 Inc are among the companies considering bids to acquire American Apparel, a fashion retailer that filed for bankruptcy in November.
To raise cash, Sears sold Craftsman tool line to Stanley, Black and Decker for $900 million.
Buzzard’s Roost – With no announcement or explanation, Apple removed the NYTimes app from its app store in China. Apple only said it was the “request of mainland authorities.” China now accounts for a fifth of all of Apple’s sales or $8.8 billion last quarter. Apple has a “string of requests from the Chinese government” to make on the iPhone.
Culture – If we had to pick the CEO who did the most in a fairly short amount of time, it would have to be Steve Easterbrook at McDonald’s. He has added about $20 billion to the market value of the company since he took over in 2015. McDonald’s, at the time, was written off as done and dead until Easterbrook brought to the fast food giant an Entrepreneurial message – if there’s a good idea, we’ll find a way to do it. The all-day breakfast is the most obvious example.
Economics – Easterbrook is not breathing easy, because he has on his heels a competitor that wants to steal the McDonald’s crown as the world’s most valuable restaurant chain, and it is a company called Starbucks, whose market value topped $86 billion last month compared to the current champ, McDonald’s, whose market value is $97 billion. Easterbrook is saying it will come down to two things – which one can stay on top of food trends and digital innovation. By the way, what happened to the King in Burger King? Maybe it should just go back to “special orders don’t upset us” on an app.
Investment Banking – Doubling Down – Yesterday, bankers for Meredith, publisher of Better Homes and Garden and owner of 14 broadcast TV stations, were in the lobby of the Time Warner building. They want to buy Time’s magazine portfolio that includes Fortune, Sports Illustrated, Time itself and several other magazine covers. Meredith, based in Des Moines, appears to have decided to double down on magazines and not try to scale broadcasting. Meredith’s offer for the magazine icons is $2 billion – about $700 million too high. Time Warner will sell, but they see Meredith is flapping in the wind and desperately wants the story of being the new iconic magazine publisher. Time Warner turned them down already and Meredith came running back with an open-ended offer instead of sending them a deadline and a deal.
Hedge Funds – Frontier Capital has acquired a majority stake in AccessOne, a financial engagement platform that helps patients manage their out-of-pocket healthcare costs.
Spotlight – With the possibility of light snow and declared emergencies set off in multiple states, I thought today’s spotlight would go to Waffle House.
Deal Stream>>>>>>>>>>>>>>>>>>>>
IPO – Frontier Airlines aims to raise $500 million on a $2 billion dollar valuation.
Exits – Jiff, a HIPAA-compliant social network and digital health apps platform, has agreed to sale to Castlight Health, Inc.
Watchwith, a native digital video ad platform, sold to Comcast.
Graham Partners sold Western Industries, Inc., a manufacturer of consumer packaged products, to Speyside Equity.
Solera Holdings, Inc., a risk and asset management software company, has agreed to buy Autodata, a provider of technical information for the automotive aftermarket, from Bowmark Capital and Rothschild & Co’s Five Arrows Principal Investments.
Venture Capital – Neon Therapeutics, an immuno-oncology company developing therapeutic vaccines and T cell therapies to treat cancer, raised $70 million.
Namely, an online human resource software platform for small and medium-sized businesses, raised $50 million.
scPharmaceuticals, Inc., a biopharmaceutical company developing products for subcutaneous delivery, raised $45.6 million.
Fugue, Inc., an operating system for managing cloud-based workloads, raised $41 million.
Cereve, a company developing an FDA-cleared insomnia device, raised $38 million in Series B funding.
Reputation.com, a provider of online reputation management services, raised $20 million in funding.
Avidity Biosciences, a biotech company developing precision medicines for the treatment of cancer, raised $16 million.
Tracx, a social media management company, raised $12.5 million in funding.
Zagster, a bike sharing company, raised $10 million.
Molecular Stethoscope, a biotechnology company developing blood-based early detection and disease monitoring tests, raised $8.2 million.
ClearScholar, a developer of student engagement software, raised $1.25 million.
Avizia, a telehealth platform, raised an additional $1 million in Series A funding, closing the round at $18 million.
Slack, a chat platform for team collaboration, invested an undisclosed amount in 11 bot startups via its venture capital arm, the Slack Fund.
Private Equity – The Carlyle Group has completed its acquisition of Claritas, which provides consumer segmentation analysis for marketers, from Nielsen.
NewSpring Holdings has acquired Vertical Management Systems, a provider of accounting and securities process-and-control services.
KKR has made a $60 million investment in Slayback Pharma, a pharmaceutical company.
Lonsdale Capital Partners completed a management buyout of P2 Consulting, a project management company.
Clayton, Dubilier & Rice closed its previously announced investment in Drive DeVilbiss Healthcare, a medical equipment distributor and manufacturer.
W.W. Williams, an industrial products distributor, has acquired Desert Fleet-Serv Inc, a mobile provider of maintenance and repair services for diesel trucks and trailers.
Dash Financial, a trading tech provider, and LiquidPoint, Convergex‘s options trading and tech business, have agreed to merge. The combined financial tech company will operate as Dash Financial Technologies.
North American Substation Services, a provider of repair and maintenance services for high voltage equipment, has acquired Nomos Systems, a maker of control cabinets for high-voltage electrical equipment including transformers and breakers.
BelHealth Investment Partners has acquired Care Advantage Inc, a provider of home healthcare and related services.
JMI Equity has invested in Healthx, Inc., a healthcare technology company.
And that’s what’s ahead, Cliff
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