May 2020

Access to some materials included in this newsletter may be limited to Red Forest Capital funds.

INDUSTRY IDEAS

• Employee Productivity Software, with an emphasis on working from home (WFH)

• Food Inspection, Meatpacking plants to remain open using the Defense Production Act

• On demand healthcare and meal delivery for the elderly; DispatchHealth and Tivity Health

• Fire safety, which is growing rapidly and, according to an investment manager I talked to last week, highly fragmented

INDUSTRY UPDATES

• Much of US economy still plugging along despite coronavirus pain from Reuters

• The price of a deal still matters. In the era of the coronavirus, though, risk mitigation might be the most important thing for dealmakers negotiating corporate takeovers from Bloomberg

• How to stay on top of market trends in a dynamic environment by Google

• Changing views on mental and substance use disorders from McKinsey

• Cybersecruity budgets will increase but 40% of responding CEOs globally say their organizations lack a clear strategy to deal with the financial and reputational impact of an attack or data breach

• The Rebuild Program, a project to help small businesses reopen amid a pandemic from Fortune Magazine

• The travel industry is going local from the Economist

• Coronavirus puts youth sports on pause by Axios

• Salesforce CEO Marc Benioff describes what office life will be like after COVID-19 from Fortune Magazine

• Gaming During the Pandemic from Konvoy Ventures, a gaming-specific VC fund. Gaming is experiencing a surge and a 9+% CAGR for the past 12 years and since the last recession. This 9 is twice the growth of other entertainment sectors like gambling, film, or music. US, video game sales in March were up 35% YoY with less than 50% to “stick around” after COVID

• 5 trends shaping the auto industry’s approach to a new normal by Google· The Evolving Healthcare Industry Landscape from the Secured Finance Network

M&A, PRIVATE EQUITY & SEARCH FUNDS

• North American M&A activity reached $400.8 billion and 3,169 transactions in Q12020, a YoY decline of 25% and a gain of 2.6%, respectively. Median multiple is 8.2x EBITDA, down from 9.8x

• Large European hosting provider One.com acquires smaller Netherlands-based competitor Hostnet, terms undisclosed

• Provider of digital care solutions for chronic conditions One Drop acquires health sensing tech provider Sano Intelligence, terms undisclosed

• Artemis Capital Partners acquires automated ultra-low volume fluid dispensing system manufacturer BioDot, terms undisclosed

• Cisco acquires wireless backhaul system provider Fluidmesh Networks, terms undisclosed

• Franklin Templeton acquires digital wealth leader AdvisorEngine, terms undisclosed

• VertexOne acquires WaterSmart to expand in the utility market, terms undisclosed

• Zoom acquires encryption startup Keybase to help make video calls more secure

• J. Crew and Neiman Marcus file for bankruptcy protection and debtor-in-possession agreements (DIP), letting creditors take control

• John Varvatos files for bankruptcy protection from CPP Luxury

• Apttus, a workflow-management software company backed by Thoma Bravo, has agreed to buy a majority stake in rival Conga for $715 million

• BluSky Restoration Contractors, backed by Dominus Capital, has merged with Signal Hill, California-based HARBRO Emergency and Restoration Inc, a mitigation, restoration and reconstruction provider for commercial properties damaged by water, fire, flood and other disasters

• Clayton Dubilier & Rice buys Radio Systems Corp., a Knoxville-based maker of electric fences and other pet products

• GTCR formed Dreamscape, a Salt Lake City-based acquisition platform focused on marketing tech companies

• Hull Street Energy acquired Gauley River Power Partners, operator of a hydroelectric-generating facility in West Virginia

• Carlyle agreed to acquire up to 74% of SeQuent Scientific Limited, an Indian animal healthcare company, for about $210 million

• Spectrum Equity invested $144 million in DispatchTrack, a San Jose-based company dealing with last-mile logistics

• Right Networks acquired Rootworks a platform for accounting firms and small businesses

INTERESTING & FUN

• For anyone who would like a deeper understanding cash flow, consider Invesco Chair and Professor of Accounting, Charles Mulford’s article on cash flow analysis and/or his book

• The Santangel’s Investor Forum Newsletter from Steven Friedman, CFA, former Analyst at Great Oaks Capital Management with degrees from the University of Pennsylvania

• Google Meet premium video meetings—free for everyone

• Manna Tree Partners raised $141.5M for its first fund to invest in companies focused on human health and wellbeing

• 10 ways coronavirus could forever change the future of travel from the Points Guy

• How to Combat Zoom Fatigue by Harvard Business Review

• What’s the Story Behind EBIT/TEV? from Alpha Architect

• Restructuring Options for Troubled Middle Market Companies from Accord Financial