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Most Valuable Casino In Vegas Sold – 2019 Largest Real Estate Single Asset Transaction

MGM Resorts International  is putting the Bellagio into a joint venture controlled by a Blackstone Group Inc real-estate investment trust. MGM is to hold a 5% stake in the venture and $4.2 billion cash and will continue to operate the hotel and casino, which it will rent from the venture for $245 million a year. The transaction values Bellagio at $4.25 billion, the company said. [WSJ]

MGM said it is separately selling another Strip casino, Circus Circus, to an associate of Phil Ruffin, who owns Treasure Island in Las Vegas, for $825 million.

Capital needed for expansion in Japan

Japan’s move last year to legalize gambling opened the way for global casino operators to pursue licenses there.

MGM Resorts has adopted what it calls its “Osaka-first” strategy, pouring its efforts into securing a license in that city.

Asset light

MGM could also look to wring some value from its 50 percent interest in mixed-use complex CityCenter, as well its 68 percent stake in MGM Growth Properties (NYSE:MGP). [casino.org]

The company stated its intention to reduce domestic net debt/EBITDA (on a restricted group basis) to about 1.0x – Moody’s

Who Owns Tech/Venture Capital Medias

Crunchbase News

Crunchbase News, first published on March 13, 2017, is part of Crunchbase.

Verizon retains an ownership stake in the company. [Crunchbase News – About]

  • (Before AOL was part of Oath, a Verizon subsidiary, AOL owned Crunchbase. Later, after Verizon bought AOL, but before it combined the Internet brand with Yahoo to form Oath, Crunchbase was spun out as its own entity.)
  • Update: Oath will be rebranded as the “Verizon Media Group” starting January 1, 2019. Also, Verizon hates it.
  • (Further disclosure: Verizon is the former employer of our editor in chief, who worked for TechCrunch, then owned by AOL, before and after Verizon bought the smaller firm.)

Investors in Crunchbase also include:

  • Emergence Capital Partners
  • Salesforce Ventures
  • Mayfield Fund
  • etc.

The company raised $18 million of Series B venture funding from lead investor Mayfield on April 6, 2017, putting the company’s pre-money valuation at $52 million.

PitchBook

Acquired by Morningstar (NASDAQ: MORN) for $225 million on December 1, 2016. Deal announced in October.

Morningstar was an early investor in PitchBook and owned approximately 20 percent of the company before acquisition.

At that time, PitchBook had $31.1 million in revenue for the trailing 12 months ended June 30, 2016. The company has more than 300 employees located in Seattle, New York, and London.

CB Insights

Raised $10 million of Series A venture funding from Pilot Growth Equity on November 9, 2015, putting the company’s pre-money valuation at $40 million.

China’s Long-term Apartment Rentals Startups

After WeWork’s unsuccessful IPO, several long-term apartment rentals startups in China are preparing to list on Nasdaq. Q&K (青客公寓) will likely be the first, planning to raise $100 million, according to the SEC filing.

Firms like Q&K will lease apartments from individual landlords, renovate the space with uniform styles, and then sublease fully-furnished rooms to tenants, who are mainly young urbanites looking for affordable housing. Q&K reported a net revenue of USD 129.6 million in the fiscal year 2018, up 70.3% year-on-year. Net losses however doubled to USD 72.8 million in the same period. [kr-asia]

I do believe they are similar to WeWork in many aspects.

Q&K is more like a test for investors’ current appetite (especially needed after WeWork), with two other bigger players waiting in line. Not surprisingly, those are backed by Alibaba and Tencent respectively.

Ant Financial-backed Danke (蛋壳公寓) and Tencent-backed Ziroom (自如) both are also looking for an IPO to raise $500 million – $1 billion.

Danke raised $500 million in February 2019.

Ziroom raised $500 million in June 2019.

 

Corporate Acquisitions in Cybersecurity Space

Cyber-security has been a hot space for investments and acquisitions. With Thoma Bravo buying Sophos Group for $3.8 billion this week, here is a roundup of selected corporate M&As happened since 2018.

Corporate acquisitions

cloud services infrastructure protection – Palo Alto Networks to acquire Evident for $300 million (2018.3)

Endpoint Detection and Response (EDR) – Palo Alto Networks to Acquire Secdo for $100 million (2018.4)

unified access security and multi-factor authentication – Cisco to acquire Duo System for $2.35 billion (2018.8)

Cloud Security – Check Point to Acquire Dome9 for $175 million (2018.10)

Operational Technology (OT) network security – Forescout to acquire SecurityMatters for $113 million (2018.11)

AI based endpoint cybersecurity – Blackberry to acquire Cylance for $1.4 billion (2018.11)

network and endpoints protections – Carbonite to acquire Webroot for $618.5 million (2019.2)

security orchestration, automation and response (SOAR) – Palo Alto Networks to acquire Demisto for $560 million (2019.2)

enterprise security –  Broadcom to acquire Symantec’s enterprise business for $10.7 billion (2019.8)

「What’s News In China」

Paypal (NASDAQ: PYPL) is becoming the first foreign payment platform to provide online payment services in China. The license is obtained by acquiring 70% of GoPay (国付宝). The transaction is approved by the People’s Bank of China (PBOC) on September 30. // Crunchbase ｜ GoPay PR

Baidu (NASDAQ: BIDU) launched self-driving service Apollo Robotaxi for the general public in Changsha China on September 27. The initial fleet has 45 autonomous cars. // cnet | SCMP

Source: SCMP

Shake Shack (NYSE: SHAK) opened its 2nd store at Kerry Center (嘉里中心) in Shanghai on September 26. Its first store in mainland China launched in January 2019 in Shanghai Xintiandi (新天地). // PR Newswire Asia | Jiemian

Source: prnasia

Xiaomi (HKSE: 1810) is entering the smart fridge segment (pricing starts at RMB 999) and completing its major appliance offerings comprised of TV, A/C, washing machines and fridges. Users can modify the temperature and mode of the cabin via voice control. Xiaomi has been trying to diversify from its smart phone business with smart home/IoT products. // gizmochina | 36kr

 

The Companies To Watch After WeWork

Following WeWork’s unsuccessful IPO (so far), people became more concerned with valuations similar companies – as Morgan Stanley says WeWork’s failed IPO marks the end of an era for unprofitable unicorns and its struggles share eerie similarities to three other market tops throughout history.

Source: Nasdaq

In public, the chairman of Softbank, Masayoshi Son commented that WeWork and Uber may be losing money now, but they will be substantially profitable in 10 years’ time.

Meanwhile, there are a bunch of other similar companies of watch and we can see what other investors are thinking.

City Storage Systems (CSS)

formerly called CloudKitchens, or “WeWork for Food”, led by Uber ex-CEO Travis Kalanick, with $150 million funding announced in March 2018.

Travis announced that he would be starting a new fund with his windfall from Uber shares sold in its most recent major secondary round. At the time, Kalanick said the new fund — called 10100, or “ten one hundred” — would be geared toward “large-scale job creation,” with investments in real estate, ecommerce, and “emerging innovation in India and China.” CSS has two businesses, CloudKitchens and CloudRetail (controlled with one entity I assume), which focus on redevelopment of distressed assets in those two areas. [Crunchbase]

And in Feb 2019, Travis Kalanick said to plot China comeback with ‘shared kitchen’ business – CloudKitchens in China, partnering with Zhang Yanqi, former COO of ofo.

OYO

also backed by SoftBank, started from assembling hotel rooms under its brand and management system in India.

Source: oyorooms

OYO CEO purchased $2 billion shares of its company this summer at a valuation of $10 billion. After the deal, Mr. Agarwal’s stake in Oyo will rise to 30% from around 10%. Of the $2bn, Mr Agarwal spent $1.3bn on a secondary purchase that saw US backers Lightspeed Venture Partners and Sequoia Capital partly cash out.

And this week, OYO raised another $1.5 billion. The remaining $700m from the previous $2 billion is included in this round.

It also recently announced a $300m investment in the US, where it has 50 hotels.

Besides it core business, OYO expanded into businesses like cloud kitchen (through acquisition of  FreshMenu for about $60 million) and co-working as well (through acquisition of  Innov8 for $30 million)

The Office Group (“TOG”)

acquired by Blackstone, the traditional and one of the largest real estate players in the work, back in June 2017 for approximately £500m.

Source: The Office Group

But with a different type of investor, TOG might be on the path of growing profits.

Its financial results for 2015 reported its EBITDA up 33% to £15.4m (2014: £11.6m), and revenues up 62% to £54.3m (2014: £33.6m). TOG is London’s largest privately-owned occupier of office space (at least by that time). [leadersleague]

Airbnb

In September, Airbnb announces it will go public in 2020, after WeWork’ delayed IPO.

It reported “substantially” more than $1 billion in revenue in Q3 2018.

Earlier this year, Airbnb sold common shares at a price that values the home-rental startup at roughly $35 billion. The company priced its equity at about $120 per share when it purchased the last-minute room provider HotelTonight for $450 million. [recode]

And in August, Airbnb announced the acquisition of Urbandoor, a platform that offers extended stays to corporate clients.

In June, it launched Airbnb Luxe, another tier besides Airbnb Plus introduced in February 2018.

Source: Airbnb