Namaste, Sat Sri Akaal, and Salaam. 🫡

Hope you guys had a smashing Monday. Compliment a random stranger today. 🤗

Today we’re diving into -
- the Adobe-Figma deal fallout,
- Adani’s billion dollar push to go green,
- and Ebix’s khatam-ed career. 🙈

Our read time is 4 minutes and 55 seconds - faster than Elon came into the ‘Melodi’ picture… 

Let's dive in. 👇

Market Vibe Check

Europe ruins the Adobe-Figma wedding. 🫣

TLDR -
- Adobe and Figma have called off their mammoth $20bn merger.
- Regulators in the UK, US, and EU (primarily EU) have made it hell for both parties to agree on an amicable deal.
- Figma will get paid a $1bn reverse deal termination fee. Not bad.

Adobe hit front pages across the globe last year when they announced that they’d be buying out Figma for $20 billion.

That deal has been in limbo ever since because European regulators feel that the merged company will have too much market power.

They’ve been opposing this merger and both Adobe and Figma have had enough - they decided to call off the deal.

In addition, regulators from the UK and US both mentioned that a company controlling a chunk of the design market this large could “harm innovation.”

It’s not great to see things like this -
- lots of time, money and energy lost by both parties
- tons of “value” that goes missing for Figma’s early VCs who were looking for an exit
- no liquidity for the hundreds of Figma employees who were handed ESOPs

There are only two silver linings here

1 - In the terms of the deal was that Adobe would pay Figma $1 billion in case the deal didn’t go through for any reason, so they get a neat little billion dollar check.

2 - the lawyers, bankers, and consultants on either side must be having a white-collared field day.

Adani gets ready to go green and go hard. 🍏

TLDR -
- Adani-owned Ambuja Cement is spending $750m on renewable energy projects to hit a 1000MW mark.
- This is good news, since Adani’s Green arms are usually the worst in terms of debt/growth/profits.
- Brilliant consolidation and turnaround in the general business…

Greta Thunberg might like this one…

Adani-owned and controlled Ambuja Cement is gonna be splashing $750mn on a bunch of renewable energy projects to generate 1000MW of power and hit their internal net-zero goals.

This is reassuring, since Adani’s own ‘Green’ arm has always been the standout amongst all group companies for the sheer amount of debt on it’s balance sheet.

Adani Green clocked an 87% rise in energy sales and is pushing forward with a plan to build the world’s largest renewable energy cluster in Khavda, Gujarat.

Renewable energy has a very high capital expense (startup costs) but negligible operating expense (running costs) when compared to “dirty” fuels.

Profits are likely to go toward wooing investors into giving them $1.5 billion, half of which will go toward debt repayment.

Gobi hai toh pumpkin hai…

$3 billion giant Ebix takes it’s last breath. 🤔

TLDR -
- Digital infrastructure (former) king Ebix just filed for bankruptcy in a Texas court.
- At it’s peak, the company’s value was around $2.7-3bn.
- They took on TONS of debt to finance growth and acquisitions, which blew up in their face.

There’s a solid chance that you’ve never heard of the company Ebix.

They’re a very interesting business, run by a very interesting guy. Ebix started as a tech consulting company, and slowly evolved into a software giant. Their founder Robin Raina made billions by positioning them as a market leader in the business of e-commerce + healthcare + finance infrastructure.

Ebix’s journey was insane - their stock price would have given you a very handsome return of 25,000% from 2003 to 2018, if you had the guts to hold it.

And somewhere around then, the troubles started.

Ebix’s growth strategy was largely inorganic. They raised multiple hundreds of millions from big banks and used this money to buy out distressed yet fundamentally sound technology companies.

But they moved a little too fast for their own good. By March of this year, they had accumulated $671mn in debt against a mere $94mn of their own cash.

Complex financial maneuvers could to little to save them as their Net debt/EBITDA ratio rocketed. This is normally a measure of how much time a company will pay their debt back in from earnings. A good tech company has a Net debt/EBITDA of 1-2.5, but Ebix’s was 3.7.

This slowly ate into the profits, and operating income plunged while revenues tanked due to slow growth.

Cut to today, and they just filed bankruptcy in a Texas court. Might just be a solid lesson in hubris.

In other news… ☕

Morgan Stanley tries moving $350mn of Saudi debt off it’s books (BBG)

US corporate bankruptcies rise by 30% (FT)

Media monitoring startup gets a $65mn check (TC)

Elon and Twitter get hit by their first European probe (CNBC)

French AI startup Mistral soars past a $2bn valuation (NYT)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team CC