Business Roundup: Bankruptcy, Acquisitions, and Strategic Shifts

Business News: Plenty’s Bankruptcy and Other Industry Updates

Plenty, a vertical farming company backed by billionaire Jeff Bezos, is facing bankruptcy. The Bay Area startup, once seen as a leader in the field, joins the growing list of vertical farming companies struggling financially, including Bowery, AeroFarms, and AppHarvest. While SoftBank was expected to take charge of Plenty’s future, it has instead provided a $20.7 million DIP financing lifeline to keep operations running, according to the Wall Street Journal.

Restaurants and Retail File for Bankruptcy

Bar Louie, a Texas-based restaurant chain, filed for Chapter 11 bankruptcy protection. The company, which operates 48 locations across the United States, lists assets between $1 million and $10 million, with liabilities ranging from $50 million to $100 million, as reported by Nation’s Restaurant News. Bar Louie cited rising food and labor costs as primary factors contributing to its financial troubles. The chain plans to restructure its debt while keeping some restaurants open for business.

Bar Louie’s bankruptcy is the latest in a trend of restaurant chains experiencing financial difficulties. Other notable examples include TGI Friday’s, Red Lobster, Red Robin, and On the Border. Hooters, which is also facing challenges, is attempting to rebrand itself, moving away from decisions made by its private equity backers. In 2021, Hooters of America faced criticism for having waitresses wear underwear-like uniforms and participate in “bikini” nights. “That’s depressing to us,” Neil Kiefer, chief executive officer of HMC Hospitality Group, told Bloomberg. “We want to change that.”

Strategic Moves and Potential Acquisitions

AT&T is reportedly pursuing Lumen Technologies’ consumer fiber business in a deal valued at over $5.5 billion, according to Bloomberg. This follows AT&T’s recent sale-leaseback deal for 74 of its properties, which generated $850 million in cash.

Searchlight Capital Partners has hired investment bank Houlihan Lokey Inc. to conduct an auction for Survitec’s aerospace and defense business. The sale process, which began after Searchlight acquired Survitec in 2019, highlights the increasing demand for defense assets. As noted by PwC, there has been a “marked increase in portfolio reshaping” as aerospace and defense companies focus on their core competencies.

Blackstone Inc. is reportedly exploring the sale of its ISN Software segment, a Dallas-based compliance software firm valued at over $6 billion. Although a bank has yet to be hired, according to Bloomberg, potential buyers have already expressed interest.

Private equity firm I Squared Capital is seeking to sell Irish power producer Energia Group, with an estimated value of approximately 2 billion euros ($2.2 billion). Reports from Bloomberg suggest that the sale could attract interest from other energy firms seeking to expand within the European market.

Morgan Stanley plans to sell its 50.1% stake in PNE, a company based in Cuxhaven, Germany, specializing in developing wind and solar energy projects. Reuters notes that the sale of this stake could allow the firm to focus on other renewable energy ventures across Europe. PNE has a market cap exceeding 1 billion euros.

Deal Updates

Cintas has called off its proposed acquisition of work uniform provider UniFirst . The deal, which would have offered $275 per share in cash, representing a 46% premium over UniFirst’s 90-day average closing price as of January 6, fell through after weeks of discussion. On the bright side, Cintas announced upbeat earnings.

William Blair is advising CentralReach LLC, a portfolio company of Insight Partners, on its pending acquisition by Roper Technologies, Inc. for $1.85 billion.

India is seeking to acquire a stake in Chilean mining leader SQM’s projects in Australia. This move would offer India, a major lithium importer, access to vital battery minerals needed to support its growing market. The Indian consortium, led by Khanij Bidesh India Ltd (KABIL), is pursuing stakes in SQM’s Mount Holland and Andover lithium projects in Western Australia. Initial estimates suggest that a 20% stake in these projects would be valued at around $600 million.

Napster’s New Chapter

Napster, a pioneering force in digital music, has been sold to tech startup Infinite Reality for $207 million. This acquisition indicates Napster’s evolution from its nostalgic roots into the world of AI and immersive technologies. Jon Vlassopulos, Napster’s CEO and former global head of music at Roblox, will remain at the helm, as well as take on a global role at Infinite Reality. This development comes after iR’s recent $3 billion funding round, which boosted the company’s valuation to $12.25 billion. Infinite Reality’s backers include Steve Aoki, Imagine Dragons, Rudy Gobert, and Taylor Fritz.