Mega Merger Monday

Tuesday, June 11, 2019 by Robinhood Snacks | Disclosures

Merger season

Dow Jones
26,063 (+0.30%)
S&P 500
2,887 (+0.47%)
Nasdaq
7,823 (+1.05%)
Bitcoin
$7,989 (+4.49%)
10-Yr US Treasury
2.146%

Hey Snackers,

Just in time for your summer wedding circuit.

Four companies found life-long love — The Dow snagged its 6th straight daily win after two big deals boosted stocks to start the week.

Merger #1
1. Salesforce acquires Tableau because everybody wants to be a data-star

It literally acquired DATA... Salesforce has become a software legend through acquisitions (it snagged 12 in one year), but this one's the biggest — The software-as-a-service pioneer dropped $15.7B to buy Tableau (ticker "symbol DATA") in an all-stock deal. DATA shares rose 34% because Salesforce is paying plenty to add to its menu of clouds:

  • "Sales Cloud": Salesforce's OG customer relationship management (CRM) platform lets you (the salesperson) obsessively track everyone. Every. Single. Lead. And your company keeps all that data even if you leave.
  • "Marketing Cloud": It's all about emails. Your company's "15% off flip flops" subject line got an open, but not a click? Marketing Cloud suggests a better option.
  • A bunch of other clouds: Health Cloud, Service Cloud, Commerce Cloud... Salesforce is the sales dashboard for everything.

Your worst nightmare... You get an email from Debbie (head of sales) asking to "break down adoption trends in the southwest region over Q3." Instead of bribing the engineer in your office for help, Tableau converts your raw data spreadsheet into visual charts, graphs, and data maps that make sense. From numbers to art.

THE TAKEAWAY

Data is the currency... Every CEO tells her employees "we're a tech company now." AKA "we need to take data seriously or we'll get disrupted by an engineer somewhere." To capitalize on that demand for data analytics, Salesforce snagged Tableau, while Google bought Looker last week for $2.6B. "Data-driven decision making" — Add it to your resumé.

Merger #2

Those kid-sized army toys... Raytheon and United Technologies make real sized ones for real armies. The New England-based defense companies announced a merger Monday — The US government hasn't approved it yet, but the PR teams seem confident it will (they just launched FutureOfAerospaceDefense.com to promote the deal). It'll be called "Raytheon Technologies," and build for the front lines and the homefront:

  • Raytheon (defense): Its Tomahawk cruise missiles are launched straight off US Navy ships.
  • United Technologies (aerospace): Its engines power the stealthy F-35 fighter jets.
  • Inventions that eventually get into your kitchen & car: It turns out United invented the microwave, and Raytheon sent the first ever photo via satellite.

There's 1 customer here... The government. Over 80% of Raytheon's revenues came from contracts with US and foreign governments — Its Patriot missile system is used by 9 nations. Raytheon and United hope teaming up will help it win more of the $398B governments dropped on weapons in 2017 (a 3rd straight annual increase).

THE TAKEAWAY

We're looking at you, Boeing... The leader of the aerospace industry has $101B in annual revenue. This Raytheon-United merger will result in $74B in combined sales, making it #2 behind Boeing (Lockheed Martin would be distant #3). This could be the big rival Boeing needed to keep it honest and competitive in bids for things like the $900M Growler Jet order it won last year. No typo — this merger could boost competition.

Re-use

Leave no trace... Starbucks is testing out a reusable cups system at Gatwick Airport in London (and taking its Boy Scout commandment very seriously). Here's how it works:

  • The pickup: For one month, a Starbucks will charge 5 pence for a paper cup, or you can drink from a reusable cup for free.
  • The dropoff: There are 5 tubs around the terminal where you can drop your empty chalice. The press release makes it seem like there's no punishment if you forget to drop off (or steal) the cup (besides shame).
  • The cleaning: The airport waste staff collects and tosses them in the dishwasher.
  • The reason for it all: Starbucks uses 7M cups at that terminal each year. It says it can save 2K paper cups per month. Reminder: Paper cups are made of trees. It will take its learnings from here to scale beyond one single airport terminal.

One cafe latte with room for responsibility... Starbucks is killing-off plastic straws, has increased pay for employees, and put its employees through discrimination sensitivity training within the last two years. It's all to convince you to pay $4 for a Starbucks even if you think "coffee is coffee" (marketers can't stand those types).

THE TAKEAWAY

Wanted: sustainable packaging for your dim sum... The combo of ecommerce and food delivery (@UberEats, @Doordash) means more packaging. So your curry dinner's six styrofoam tubs are popular, too. Delivery diets have become a packaging problem that we hope becomes an entrepreneur's opportunity. Some ways to do it:

  • Recyclable packaging: Good start, but what happens when it's covered in chili paste?
  • Package taxes: Since adding 10-cents to your plastic bag isn't loved, companies tend to avoid them (unless a law requires it). FYI, Maine and New York City just banned styrofoam.
  • Compostable and reusable packaging: Even "luxe" packaging startups are getting into this.
What else we’re Snackin’
  • Un-Done: Barnes & Noble's acquisition by a hedge fund? Now there may be a big counter-offer
  • Finale: AT&T's HBO cancels its "Vice News Tonight" after the show failed to get a large following
  • Smoked: Tilray's pot stock pops 11% even though a big investor (that's backed by billionaire Peter Thiel) is selling its stake
  • Sweet: Krispy Kreme is launching a 4.5K-square-foot store with the world's largest "hot light" to heat donuts (shocker, it's in Times Square)
  • Recall: Tyson Foods recalls 5,814 cases of chicken because they may include some plastic
  • eRecall: Audi issues a voluntary recall of its eTron electric SUV on worries the batteries catch fire
Snacks Daily Podcast

Today's 15-minute Snacks Daily pod:

  • "Trend of the Day": Work from home — video-conference icon Zoom's 1st earnings report since its IPO shows how it's profiting off emeetings
Tuesday
  • Earnings from Dave & Buster's
  • Team USA plays Thailand in the Women's World Cup

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