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Becoming a public company comes with its downsides: Yes, you have great access to capital, but you’re also on a hamster wheel constantly chasing quarterly profits and financial metrics.
So it’s interesting to read this story about McDonald’s, which is now in the midst of a turnaround that is not primarily driven by the numbers, but by a need for a cultural reset. The Golden Arches ousted former CEO Steve Easterbrook in 2019 for sexting with an employee, and says it later found evidence of him engaging in sexual relationships with other workers.
It is a sign of the times that a company that had its start some 66 years ago is no longer quietly allowing the scandal to fade into grey. Fortune senior editor Beth Kowitt takes on the story for our most recent magazine issue. Here’s an excerpt:
“In November 2019, the board announced that it had fired Easterbrook for sexting with an employee. Since then it has taken the unusual step of suing its former CEO to claw back his compensation. In its complaint McDonald’s alleges that in addition to the inappropriate text messages, it has since found evidence that Easterbrook had sexual relationships with three employees in the year before his departure. Industry observers were shocked by the company’s move. No one expected to see an institution like McDonald’s, as old-school as it gets, break with the norms of corporate America, which would have prescribed sweeping the whole mess under the rug. Instead, the company is opting to air its dirty laundry in an attempt to distance itself from its former CEO. It’s a counterintuitive strategy: reveal the R-rated details to protect the brand’s family-friendly image.” Read more.
IN CASE YOU MISSED IT: Dominion Voting, the seller of electronic voting machines and software backed by private equity firm Staple Street Capital, may not be an enormous Fortune 500 company. But its defamation lawsuits against those who it claims spread election fraud conspiracy theories could have effects across the private sector.
My former colleague, the already sorely missed 😢 Jen Wiezcner, dove into the topic for her final Fortune magazine story before she fully assumed her job as features writer at New York Magazine. In its lawsuit against Fox, Dominion has requested some $600 million in lost profits and claims a lost enterprise value of at least $1 billion on top of hundreds of thousands of dollars spent on security and “combatting the disinformation campaign.” An incident of human error in Antrim County, Michigan during the 2020 presidential elections was the drop that began a flood of baseless voter fraud and rigging claims.
Wieczner writes: “The cases are also potentially groundbreaking in a more significant way, one whose ramifications are impossible to predict: They’re an effort by private companies to make other parties literally pay for abusing political discourse—including a media giant that has had a huge influence on 21st-century public life. Fox argues that the voting-machine allegations were inherently newsworthy, and that the airtime it gave them is protected under the First Amendment’s guarantee of freedom of the press. The plaintiffs argue that the falsity of the allegations, and the apparent endorsement of them by some Fox hosts, strips those protections away.”
Read the full feature here.
Now scroll below for what is the slowest day in dealmaking since I took over this newsletter at the start of the pandemic.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Meesho, an India-based reselling app, raised $300 million in Series E funding. SoftBank Vision Fund 2 led the round valuing it at $2.1 billion. Read more.
- dLocal, a Uruguay-based cross-border payments fintech, raised $150 million in a round valuing it at $5 billion. Alkeon Capital led the round and was joined by investors including BOND, D1 Capital Partners, and Tiger Global.
- Fetch Rewards, a Madison, Wis.-based consumer-loyalty app, raised about $210 million in Series D funding. SoftBank Vision Fund 2 led the round and was joined by investors including ICONIQ, DST, Greycroft, and e.ventures.
- Getir, a Turkey-based grocery delivery company, raised $300 million in Series C funding. Sequoia Capital led the round and was joined by investors including Tiger Global.
- Sweet Flower, a Los Angeles, Calif.-based cannabis retailer, raised $15 million in in Series A funding. AFI Capital Partners led the round.
- ConductorOne, a Portland, Ore.-based platform for granting access and managing permission, raised $5 million in seed funding. Accel led the round and was joined by investors including Fuel Capital, Fathom Capital, and Active Capital.
- HearHere, a Santa Barbara, Calif.-based audio entertainment startup, raised $1.2 million in pre-seed funding. Investors included Marcus Lemonis (The Profit on CNBC), Camping World, Kevin Costner, and Cooley.
PRIVATE EQUITY
- Centerbridge Partners, Warburg Pincus, and Dundon Capital Partners will fund Hertz Global Holdings, a Park Ridge, N.J.-based car rental company, in its exit from Chapter 11 bankruptcy. Under the deal, unsecured funded debt claims against the company can be exchanged for about 48.2% of equity in the reorganized company, with the right to acquire another $1.6 billion of equity. Read more.
- Brynwood Partners acquired De Wafelbakkers, a North Little Rock, Ar.-based manufacturer of branded and private label frozen pancakes, waffles and French toast, from the The Oklahoma Publishing Company. Financial terms weren't disclosed.
- Lightview Capital invested in MotionPoint, a Coconut Creek, Fla.-based provider of translation solutions. Financial terms weren't disclosed.
- Options Technology, backed by Abry Partners, acquired Fixnetix, a London-based provider of trading services to investment banks, hedge funds, proprietary trading firms, and exchanges. Financial terms weren't disclosed.
- Work World, backed by Gart Capital, acquired Whistle Workwear and Willy’s Discount Workwear, two Washington state-based workwear clothing providers. Financial terms weren't disclosed.
- PSG invested in Singlewire Software, a Madison, Wis.-based provider of mass notification software for safety, emergency and workflow communications. Financial terms weren't disclosed.
EXIT
- Byju’s acquired Aakash Educational Services, an India-based chain of of physical coaching centers, for about $1 billion, per TechCrunch. Read more.
- Advocate Aurora Enterprises acquired Senior Helpers, a Baltimore, Md.-based provider of personal care workers backed by Altaris Capital Partners. Financial terms weren't disclosed. Financial terms weren't disclosed.
- Platinum Equity agreed to acquire The Cabinetworks Group, a manufacturer and distributor of kitchen and bath cabinets, from investors including American Industrial Partners and GIC. Financial terms weren't disclosed.
OTHERS
- Pinterest (NYSE: PINS), a San Francisco-based social media company, has been in talks to acquire Visual Supply, an Oakland, Calif.-based company also known for its VSCO photo-editing app, per the New York Times. Read more.
- Tribune Publishing (Nasdaq: TPCO), the Chicago-based newspaper publisher is in talks with a group that has offered to acquire the business for $680.8 million, above the $634.8 million takeover offer from Alden Global Capital. The offer comes from a group including Choice Hotels International Chairman Stewart Bainum Jr. and Swiss billionaire Hansjoerg Wyss.
- Big Hit Entertainment, also known as HYBE, is investing 1.07 trillion won ($950 million) into its U.S. unit to acquire Ithaca Holdings, the music managing company backed by Scooter Braun and Carlyle. Big Hit is expected to pay a total of about $1.1 billion. Read more.
IPO
- Argo AI, a Pittsburgh, Pa.-based self-driving startup, is weighing plans to go public this year, per Bloomberg. Ford and Volkswagen back the firm. Read more.
- Swan Daojia, a Beijing-based maid and home-maintenance services provider formerly known as 58 Home, revived plans for a U.S. IPO that could value it at $3 billion, per Bloomberg. Investors include Sequoia Capital China and 58.com. Read more.
- Bright Health Group, a Minneapolis-based digital health company, is planning for an IPO that could raise $1 billion later this year, per Bloomberg. Investors include Bessemer Venture Partners and Greenspring Associates. Read more.
SPAC
- Golub Capital’s attempted court order to temporarily bar Dyal Capital Partners, its part-owner from merging with Owl Rock Capital Partners via a SPAC deal that would value the duo at $12 billion. Read more.