Axios Pro Rata: Bad Cheesecake — AMC's last stand — Jobs Friday

Top of the Morning | Friday, December 04, 2020

Open in app View in browser   Presented By Koch Industries   Pro Rata By Dan Primack ·Dec 04, 2020 🎧 Axios Re:Cap spoke with Alex Goldstein, who created @FacesOfCOVID to tell the stories behind the statistics. Listen via Apple, Spotify or Axios.     Top of the Morning Illustration: Sarah Grillo/Axios   The Cheesecake Factory this morning became the first public company charged by the SEC with misleading investors about the pandemic's financial impact on its business. Driving the news: The SEC claims that the sugar slinger reported "materially false" information in its March 23 and April 3 filings by saying that it was "operating sustainably" by shifting to pickup and delivery. The restaurant chain's reality was a $6 million weekly burn and just four months of cash remaining. It did allegedly share its financial troubles with prospective private equity investors and lenders, as it sought additional liquidity. The company on April 20 announced a $200 million preferred convertible investment from Roark Capital. By the time of its SEC filings, Cheesecake Factory had already told landlords that it wouldn't pay its April rents. In response, the Calabasas, California-based company agreed to pay a $125,000 penalty, without admitting guilt. That may be close to what it costs to order one of everything on Cheesecake Factory's massive menu. Between the lines: This obviously reflects bad behavior by company execs, who tried to hide the deflated ball. But it also reflects the restaurant industry's dire condition, as COVID surges and Congress sputters on stimulus. Cheesecake Factory reported $127 million of profits last year. This year, it reported $88.5 million of net loss through the first three quarters. The company did manage to get a bailout from private equity, without receiving PPP monies, but that makes it a restaurant industry exception to the rule. Closing pitch: Our next Peloton ride (Dec. 12) will be to benefit fulltime restaurant workers who've been negatively impacted by COVID-19 closures and slowdowns. If you're interested in participating as a donor, such as making a per rider match, please let me know via email (dan@axios.com). They could really use your help.     The BFD Illustration: Annelise Capossela/Axios   AMC Entertainment (NYSE: AMC), the country's largest cinema chain, filed to sell 200 million shares of common stock via a public offering Why it's the BFD: This went from dire to disaster very quickly. AMC, which has been hammered by the pandemic, said in its filing that if the share sale fails, or doesn't generate sufficient capital, the company is likely to liquidate or file for bankruptcy. Then, just hours later, Warner Bros. announced plans to release its entire 2021 film slate on its HBO Max streaming platform rather than in theaters. Pricing: AMC said the offering could raise $844 million via its Nov. 30 price of $4.22 per share, but it would net just $726 million at yesterday's closing price. Cap table: AMC bondholders include Apollo Global Management and Silver Lake (which bought $600 million of convertible notes last fall). The bottom line: "The collective efforts from most of the biggest Hollywood movie studios to make their top films available to consumers at home spells trouble for the theater industry." — Sara Fischer, Axios     Venture Capital Deals • Moov Financial, an open source embedded banking platform, raised $27 million in Series A funding. Andreessen Horowitz led, and was joined by Bain Capital Ventures, Canapi Ventures, Uncorrelated Ventures, Gradient Ventures, Commerce Ventures, RRE Ventures, Abstract Ventures and Veridian Credit Union. www.moov.io • ANYbotics, a Swiss maker of four-legged autonomous robots, raised around $22 million in Series A funding led by Swisscom Ventures. http://axios.link/KKhF • Nuburu, a Centennial, Colo.-based developer of blue laser tech, raised $20 million in Series B funding led by Anzu Partners. http://axios.link/fOu2 • Pave, a San Francisco-based provider of real-time compensation transparency tools, raised $16 million in Series A funding. Andreessen Horowitz led, and was joined by Bessemer Venture Partners, Bezos Expeditions, Dash Fund and YC. http://axios.link/LtdM • Catch, a Chicago-based sportfishing brand, raised $6 million led by Listen Ventures. http://axios.link/WpEf • Esports One, a Santa Monica, Calif.-based fantasy platform for esports, raised $4 million from XSeed Capital, Eniac Ventures and Chestnut Street Ventures. http://axios.link/oyBJ • LemonBox, an e-commerce startup that sells American health supplements to Chinese millennials, raised $2.5 million. Panda Capital led, and was joined by YC. http://axios.link/om0J • Henry, a Buenos Aires-based coding school startup, raised $1.5 million in seed funding from Accion Venture Lab, Emles Venture Partners and Noveus VC. http://axios.link/uykT     A message from Koch Industries Building a self-actualized workforce     When does a job become more than just a paycheck? When individuals are empowered to discover their innate abilities and unleash their potential. Charles Koch and the Society for Human Resource Management CEO Johnny Taylor explain how business leaders can help employees do just that. Learn more.     Private Equity Deals • The Blackstone Group will pay $358 million for a portfolio of 13 industrial warehouses from Iron Mountain (NYSE: IRM) via a sale-leaseback transaction. http://axios.link/geGY • The Carlyle Group and Hellman & Friedman committed $1 billion in combined equity to launch Vantage, a catastrophe and specialty reinsurance platform led by former AXA AL CEO Greg Hendrick. http://axios.link/uL96 • Exterro, a Beaverton, Ore.-based portfolio of Leeds Equity Partners, acquired AccessData, an Orem, Utah-based provider of digital forensic investigation software. www.exterro.com 🚑 Gyrus Capital agreed to buy the heart valve operations of LivaNova (Nasdaq: LIVN) for €60 million. http://axios.link/1Vxo • HES Facilities, a Knoxville, Tenn.-based outsourced janitorial and building maintenance company owned by Nautic Partners, acquired St. Louis-based WFF Facility Services and Clean-Tech Co. www.hesfacilities.com • Spartech, a St. Louis-based portfolio company of Nautic Partners, acquired Tufpak, an Ossipee, N.H.-based maker of plastic films for biohazard bags. www.spartech.com • Thoma Bravo agreed to repurchase Flexera, a Chicago-based IT asset management company, for around $2.85 billion from TA Associates and Ontario Teachers. http://axios.link/EJ1W • Thomas H. Lee Partners recapitalized existing portfolio company Hightower Advisors, a Chicago-based RIA aggregator, via a secondary transaction that includes participation from Coller Capital, Goldman Sachs and Neuberger Berman. The WSJ puts the deal value at between $800 million and $900 million. http://axios.link/HBUP     Public Offerings Illustration: Eniola Odetunde/Axios   • DoorDash, a San Francisco-based restaurant meal delivery service, boosted its IPO price range from $75-$85 to $90-$95. It still plans to offer 33 million shares. The company would have a fully diluted value of over $35 billion, were it to price in the middle of its revised range. http://axios.link/TZJs • Upstart, a San Mateo, California-based consumer lending platform, set IPO terms to 12 million shares at $20-$22. It would have a fully diluted value of $1.9 billion, were it to price in the middle, and plans to list on the Nasdaq (UPST) with Goldman Sachs as lead underwriter. The company reports $147 million in revenue for the first nine months of 2020, and raised nearly $650 million in VC funding from firms like Third Point Ventures (19.5% pre-IPO stake), Khosla Ventures (8.4%), Rakuten (5.3%), and First Round Capital (5.2%). http://axios.link/ScVz     SPAC Stuff • Innoviz, an Israeli developer of lidar sensors and perception software, is in talks to go public via a reverse merger with Collective Growth Corp. (Nasdaq: CGRO), a SPAC led by cannabis industry exec Bruce Linton, per Bloomberg. Innoviz raised over $360 million from firms like China Merchants Capital and Shenzhen Capital Group. http://axios.link/G8zZ • Thoma Bravo is prepping a tech-focused SPAC, with a source telling Axios that it will seek to raise at least $1 billion with Citi as lead banker.     Liquidity Events 🚑 Comvest Partners hired Moelis to find a buyer for D&S Community Services, an Austin, Texas-based provider of services to people with developmental disabilities, per PE Hub. http://axios.link/KrpW 🚑 Icon Group, an Australian cancer care provider, is seeking to either sell or list in 2021, per The Australian. It was acquired in 2017 for A$1.2 billion by Goldman Sachs, Pagoda Investments and Queensland Investment Corp. www.iconcancercentre.com.au • VSCO, a photo-sharing platform valued at $550 million by VCs, acquired video editing app Trash, which had been seeded by Next 10 Ventures, DG Ventures and Akatsuki Entertainment Technology Fund. http://axios.link/30eH     More M&A • Affirm, the Max Levchin-led fintech that's in IPO registration, agreed to buy Canadian buy-now-pay-later firm PayBright for C$340 million. http://axios.link/a6RA • Eni (BIT: ENI) agreed to buy a 20% stake in the North Sea-based Dogger Bank Wind Farm project from Equinor (Oslo: EQNR) and SSE (LSE: SSE) for £405 million. http://axios.link/eHuL     Fundraising • Bling Capital, led by Ben Ling (ex-Khosla Ventures, Facebook), raised $77 million for its second seed-stage fund and $36 million for its second opportunities fund. http://axios.link/C1Bt • Entrée Capital of London raised $125 million for an Israel-focused VC fund. http://axios.link/TQqg     It's Personnel • Ian Loring is leaving Bain Capital, where he led tech private equity, in order to join Crosspoint Capital Partners, a new private equity firm focused on cybersecurity and software infrastructure, Axios has learned. Loring had been with Bain for the past 24 years. Crosspoint was co-founded by Greg Clark, the former CEO of Blue Coat Systems, which Bain acquired in 2015 before later selling it to Symantec. It's said to be raising around $1 billion for its debut fund, and its other co-founder is J. Taylor Crandall (ex-Oak Hill Capital). • Craig Beach joined Rice University's endowment management company to lead venture capital and private equity investments. He previously was a partner and director of investments at Cambridge Associates. www.rice.edu • Kazushige Kobayashi joined MCP Asset Management as a Tokyo-based managing director. He previously spent nine years with Capital Dynamics. www.mcp-am.com     Final Numbers Data: BLS; Chart: Axios Visuals The U.S. economy added 245,000 jobs in November, while the unemployment rate fell to 6.7% from 6.9%, per this morning's government jobs report. The jobs gains were well below October's +610k figure, and also fell short of analyst expectations. Per Axios' Felix Salmon: "The U.S. still has 9.8 million fewer jobs than it had in February. That's a bigger job decline than during the depths of the Great Recession."     A message from Koch Industries Building a self-actualized workforce     When does a job become more than just a paycheck? When individuals are empowered to discover their innate abilities and unleash their potential. Charles Koch and the Society for Human Resource Management CEO Johnny Taylor explain how business leaders can help employees do just that. Learn more.   ✔️ Thanks for reading Axios Pro Rata! Please ask your friends, colleagues, and movie mavens to sign up.   Axios thanks our partners for supporting our newsletters. Sponsorship has no influence on editorial content. Axios, 3100 Clarendon B‌lvd, Suite 1300, Arlington VA 22201   You received this email because you signed up for newsletters from Axios. Change your preferences or unsubscribe here.   Was this email forwarded to you? 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