What You Need To Know For April 18th, 2024

In partnership with Hebbia

Recent Earnings Highlights 📰

• Goldman Sachs: Revenue of $14.2B beat expectations of $12.9B, with EPS of $11.58 (estimates of $8.56). Fixed income trading of $4.3B was up 10% y/y, equity trading was up 10% y/y to $3.3B, and IB fees grew 32% y/y to $2B. CEO David Solomon noted that “historically depressed levels of activity wouldn’t last forever….we’re in the early stages of a reopening of the capital markets.”

• Bank of America: Revenue was $26B (expectations of $25.5B) was down 2% y/y and EPS of $0.83 beat estimates of $0.76. Deposits of $1.95T were up 1% q/q. Fixed income trading revenue of $3.3B was down 3.6% y/y, equity trading revenue of $1.9B grew 15% y/y, and IB revenue rose 35% y/y to $1.6B. However, profits were pressured by higher deposits than offset loan growth and higher asset yields.

• Morgan Stanley: Revenue of $15.1B met estimates of $14.4B, with EPS of $2.02 ($1.66 expected). Wealth management revenue grew 4.9% y/y to $6.9B, equities trading grew 4.1% y/y to $2.8B, IB revenue grew 16% y/y to $1.5B, while fixed income revenue beat expectations but fell 3.5% y/y to $2.5B.

• Johnson & Johnson: Revenue of $21.4B met estimates, while EPS of $2.71 exceeded estimates of $2.64. FY24 revenue guidance includes $88B-$88.4B in sales (up 4.7%-5.2% y/y) with an EPS guide of $10.57-$10.72 (up 6.6%-8.1% y/y).

• United Airlines: Revenue of $12.5B was slightly better than estimates, with $0.15 EPS beating estimates of a -$0.57 loss. Business travel demand has been robust despite grounding some MAX 9 planes. Their annual capex guide was also lowered from $9B to $6.5B. United overall expects “a record number” of travelers this summer.

Headlines 🔍

• Red Lobster is considering Chapter 11 bankruptcy. Thai Union Group is the Sponsor (Golden Gate Capital exited in 2021), King & Spalding is the legal advisor, and Fortress is the lead lender. Their Endless Shrimp offering seems to be causing serious financial losses and have led them to this potential filing. Red Lobster used to be a broadly syndicated loan prior to the 2021 recapitalization.

• Ardagh Group, a packing producer, announced a $1B “hunter-gatherer” liability management deal with Apollo in order to address ‘25 maturities. Through using a new unrestricted sub, Ardagh got to Apollo is lend to them by backing it with existing collateral plus equity in the beverage can production unit. The “hunter and gatherer” part comes into play through a feature Apollo has to buy unsecured and PIK bonds in the open market and exchange those for senior paper. While the “hunter-gatherer” phrase is an unique spin, these are more commonly known as roll-up rights, which allow this existing junior debt to be moved up in priority. Their advisors are K&E and Houlihan Lokey. At 7.5x net leverage this is the last thing existing creditors would want…

• Riverside is in the process of selling their private credit unit.

• Salesforce shares fell after rumors that they’re looking to acquire Informatica (currently trades at a $11B+ valuation)

• Israel is weighing responding to Iran’s attack

• The Justice Department is preparing to sue Live Nation for antitrust violations.

• Private Equity Sponsor, CVC Capital, is planning to go public on the Amsterdam equity market for north of >$1.3B.

• Microsoft backed Rubrik could raise $713mm in an IPO, be valued north of $5B.

• Global Macro HF, Element Capital, is planning to return $4B of external capital to clients.

• Google Workers arrested

• NBA Player receives a lifetime ban for sports betting (including betting on his own team to lose)

Layoffs ⛈️ 

• UBS is planning another round of layoffs, with over a hundred wealth management and markets professionals targeted

• Tesla laid off >10% of their workforce

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Transactions: M&A 💭 

• Edinburgh Airport, operator of Scotland’s national airport, has reached a definitive agreement to be acquired for $1.6B by VINCI Airports.

• Silk Security, developer of security platform designed to manage and remediate security findings, was acquired for $150.00M by Armis.

• FTI Group, an operator of a travel agency, has entered a definitive agreement to be acquired for $135.18M by Certares.

• SAES Getters, developer of getters and related components, was acquired for $4.77B by S.G.G Holdings.

• Encore Wire (NAS: WIRE), a manufacturer of electrical building wire and cable, has reached a definitive agreement to be acquired for $3.9B by Prysmian Group (MIL: PRY). J.P. Morgan advised on the sale.

• TClarke (LON: CTO), a building service contractor, has reached a definitive agreement to be acquired for $113.59M by Regent Gas.

• ShockWave Medical (NAS: SWAV), a medical device company focused on developing and commercializing novel technologies that transform the care of patients with cardiovascular disease, was acquired for $13.1B by Johnson & Johnson (NYS: JNJ). Perella Weinberg Partners advised on the sale.

• Macatawa Bank (NAS: MCBC), an operator of twenty-six branch offices and a lending and operational facility, has reached a definitive agreement to be acquired for $150.3M by Wintrust Financial (NAS: WTFC). Morgan Stanley advised on the sale.

• Presidio, a provider of information technology professional and managed services, has entered a definitive agreement to be acquired by Clayton and Dubilier & Rice. Guggenheim Partners and LionTree advised on the sale.

• Blackbaud (NAS: BLKD), a provider of software solutions designed to service the “social good” community, is in talks to be acquired for $4.3B by Clearlake Capital Group.

Transactions: Private Placements 💭

• Rivos, a manufacturer of computer chips, has raised $250.00M of venture funding led by Intel Capital, MediaTek and Dell Technologies Capital.

• xScale Data center in the U.S., an operator of a data center in San Jose, was formed as a joint venture between Equinix and PGIM Real Estate.

• Stripe, a developer of an online financial infrastructure platform, raised $694.00M of venture funding led by undisclosed investors.

Noteworthy Chart 🧭

Best of YouTube ⌚️

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Meme Cleanser 😆 

Until Next Time!