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More firms choosing buyouts over IPOs (Wall Street Journal)
An increasing number of firms are choosing to exit with a buyout instead of an IPO.
Firms are “deciding the safer way to cash out is to find an acquirer,” the Wall Street Journal reports.
“US companies are dropping IPOs and selling themselves at the highest rate in three years, underscoring the gap between volatile financial markets and a booming merger business,” The Journal says.
The shift towards acquisition has occurred as the dollar volume of US IPOs has dropped by 63% from its 2014 total.
“More than $2.3 trillion worth of merger and acquisition deals have been announced this year, a record pace that is up 46% from the total volume of 2014,” according to The Journal.
Tech unicorn CFOs: Winter is coming (Business Insider)
At the recent MIT Sloan CFO summit, the CFOs of four tech unicorns — Kabbage, Actifio, SimpliVity, and Thumbtack — explained that venture capitalists and other investors are starting to lend with an increasing amount of caution. Unicorns are private companies valued at $1 billion or more.
Tightening market conditions are forcing companies to focus more on execution and driving value to the market, SimpliVity CFO Tom Beaudoin said.
The CFOs urged startups to avoid making guarantees to investors that ensure those investors earn back their initial investment before others. For example, a venture capitalist may demand that their investment is paid back at a rate of $2 for every $1 invested before other investors receive money following a successful exit.
They also warned that this kind of funding structure can dilute value for shareholders and cause other frustrations during an IPO, acquisition, or additional rounds of funding.
Here’s why Pabst Brewing isn’t afraid of the craft beer movement (Business Insider)
Pabst Brewing Company CFO Cordell Sweeney welcomes the American drinker’s shift to craft brews.
Business Insider spoke to Sweeney about the craft beer movement and what his company is doing to secure business from a growing population of craft beer drinkers.
“Our strategy is to bring back the craft style recipes in our existing portfolio of 80 iconic brands, partnering with existing craft brewers and investing with craft brewers where appropriate,” Sweeney said.
The company has also started offering a new take on an old classic. In 2015, the company partnered with Small Town Brewery and debuted Not Your Father’s Root Beer, a craft brew that tastes like regular non-alcoholic root beer.
Pabst relies on state-of-the-art analytics to target local customers. “The beer business is a relationship-building business, where you are selling one beer at a time,” Sweeney said.
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