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| Here’s your daily business briefing. - 🍔 McDonald’s adds Krispy Kreme nationwide
- 🔍 Deep Dive: M&A surpasses $400B threshold
- 💰 Saudi investor injects $1B into Lucid
Thanks for reading! Shriram
p/Shriram | |
| 1 | | McDonald's ($MCD) aims to offer Krispy Kreme doughnuts across its U.S. outlets by late 2026, with the rollout starting in the latter part of 2023 and expected to take around two and a half years. This exclusive partnership with Krispy Kreme ($DNUT) has significantly increased the doughnut company's stock value, surging nearly 20% in premarket trading. More: - Krispy Kreme employs a "hub and spoke" system to streamline the production and distribution of its doughnuts.
- Partnering with McDonald's presents Krispy Kreme with a significant opportunity for expansion, initially targeting around 6,000 McDonald's outlets.
- Introducing Krispy Kreme doughnuts to McDonald's menu strengthens its morning and bakery selections.
- Up from its projected 75,000, Krispy Kreme anticipates having more than 100,000 doughnut access points worldwide.
- McDonald's customers can enjoy original glazed, chocolate iced, and chocolate cream-filled doughnuts, offered throughout the day in packs of six or individually.
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What the numbers say: Global mergers and acquisitions (M&A) activity has exceeded $400B this year, marking a 55% increase compared to last year. The U.S. spearheads the resurgence in M&A, with deal values rising by over 80% YoY. Relevance: The resurgence in M&A activity, driven by factors like the end of the interest rate-hiking cycle and bullish equity markets, signals growing confidence among dealmakers. Particularly in the U.S., significant deals such as Capital One's $35B offer for Discover Financial Services and Walmart's acquisition of Vizio Holding Corp for $2.3B reflect a robust M&A environment, hinting at a substantial recovery despite geopolitical tensions and cautious outlooks. More data: Notable deals like Synopsys Inc.'s $34B acquisition of Ansys Inc., Diamondback Energy Inc.'s $26B deal for Endeavor Energy Resources LP, and BlackRock Inc.'s $12.5B purchase of Global Infrastructure Partners are fueling the recent surge in M&A activity. Despite the rise, transaction values remain below the record-breaking levels of 2021, with current figures down by about a quarter compared to that period. | | | |
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| 3 | | Saudi Arabia's Public Investment Fund injects $1B into Lucid Group Inc. ($LCID), the American electric carmaker, through a private placement of convertible preferred stock, allocated for capital expenditure and working capital. Analysts at Morgan Stanley see this investment as a modestly positive move, demonstrating continued support for Lucid amid growing competition in the EV market. More: - Following the news, Lucid's shares shot up 7% after plunging 34% earlier in the year.
- Having difficulty increasing production, the Newark, California-based company plans to build about 9,000 high-end Air cars in 2024—a little more than the 8,500 constructed in 2023.
- With $1.4B in cash and cash equivalents at the end of 2023, the corporation posted a fourth-quarter loss of $0.29 per share.
- Despite challenges, Lucid asserted that the business had sufficient cash to fund operations through 2025.
- Last year, in May, Lucid secured $3B from common stock offerings and investments by Saudi Arabia's Public Investment Fund, with PIF now holding a majority stake of about 60%.
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| 4 | | The pandemic spurred a surge in bidet popularity amid toilet paper shortages, with bidetking.com selling out all models and experiencing rapid growth. Post-pandemic bidet sales have continued to rise, with bidetking.com reporting consistent annual growth of at least 20%, offering American consumers various options from essential attachments to luxury electronic models. More: - The manufacturer of bidet attachments, Tushy, saw a rise in revenue from $8M in 2019 to $40M in 2020.
- Bidets, originating in Europe, the Middle East, East Asia, and South America, historically had limited adoption in the U.S. due to cultural connotations and post-war plumbing trends.
- Bidet usage is gaining traction in the U.S. through word of mouth, with many new customers becoming long-term users.
- The rising adoption of bidets in the U.S. is fueled by consumers seeking eco-friendly and health-conscious alternatives to toilet paper.
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| 5 | | Despite inflationary pressures, McCormick ($MKC) exceeded market forecasts for first-quarter sales and profit, driven by sustained demand for premium spices and seasonings. Although volumes for the quarter decreased by 1%, an improvement from the previous quarter's 3% decline, adjusted earnings per share reached $0.63, surpassing analysts' expectations of $0.58 per share. More: - In contrast to competitors Kraft Heinz and International Flavors & Fragrances, McCormick experienced an increase in first-quarter sales.
- This quarter's price increase was 3%, as opposed to the prior quarter's 5% increase.
- The American food company's net sales were $1.60B above analysts' average forecast of $1.56B.
- Cost-cutting initiatives and pricing changes increased the gross profit margin by 140 basis points to 37.4%.
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| 6 | | FabFitFun, a subscription box company, has purchased PupBox, a monthly dog subscription box service, from Petco to meet the growing demand among its members for pet-related products. PupBox, established in 2014, offers boxes curated with toys, treats, grooming essentials, and accessories designed to cater to a dog's evolving requirements. More: - FabFitFun views the acquisition as a seamless expansion of its pet product line, enhancing the experience for both FabFitFun and PupBox subscribers.
- PupBox, which appeared on "Shark Tank" in 2016, enhances FabFitFun's mission of encouraging people to take care of themselves.
- As PupBox is integrated into FabFitFun's platform, the company intends to preserve its existing presence and offer it to FabFitFun members in the coming months.
- Founded in 2010, FabFitFun provides seasonal subscription boxes, exclusive brand offers, shopping experiences, and online content.
- The acquisition enables FabFitFun to enter the pet category and utilize its expertise to increase PupBox's subscriber base.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Shriram Jeevakumar | |
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