TheChek News Flow

Nobel Prize in Physics Awarded to Duo for Machine Learning

Prize awarded for inventions that enable machine learning with artificial neural networks

John J. Hopfield of Princeton University and Geoffrey E. Hinton of the University of Toronto were awarded the Nobel Prize in physics for their work with machine learning.

GLP Capital deal will add $44bn in assets to private investment group’s business

Ares Management has agreed to pay up to $5.2bn to buy the international arm of real estate investment manager GLP Capital Partners, in one of the largest combinations in the private investment industry in recent years.

The deal will add $44bn in assets to Ares’s business — taking it towards its goal of managing more than $750bn by 2028 — and extend it beyond its core credit franchise. It also puts Ares much closer in size to its larger peers, including Blackstone, Apollo Global Management and KKR.

The takeover of GLP Capital’s international business, which excludes its funds in Greater China, will nearly double Ares’s investment business in the property sector, giving it large real estate holdings in Japan and Europe.

Ares chief executive Michael Arougheti told the Financial Times the deal would make it one of the three largest investors in industrial real estate, putting it behind Blackstone and Prologis. The Los Angeles-based group managed just under $450bn at the end of June.

Top executives at Ares, led by billionaire Arougheti — who is also a co-owner of the Baltimore Orioles baseball team — have turned to takeovers to expand the private investment business, which has more than doubled in size since the end of 2020.

In 2021 it bought secondaries investor Landmark Partners for $1.1bn, which was followed closely by the buyout of US real estate investment firm Black Creek. Then in 2023 it purchased Asia-focused private equity group Crescent Point Capital.

Ares will pay $1.8bn in cash for the business known as GCP and fund the remainder of the $3.7bn purchase price with its own shares. It has also agreed to a long-term incentive plan with GCP’s top leaders, which could lift the payouts they receive by a further $1.5bn through 2027. Ares may choose to pay the majority of that with stock.

Arougheti said Ares was drawn to the deal as the Federal Reserve was cutting interest rates and demand for data centres continued to explode.

“We are able to come into the deal having underwritten property values in a higher interest rate environment,” Arougheti said. “As interest rates come down . . . you should see an improvement in economics. We’re buying in at the right time.”

The groundswell in the data centre business has unleashed a race by some of the largest money managers. Ares’s investment comes a day after rival credit investment shop Blue Owl announced it had agreed to buy IPI Partners, an investor in data centre infrastructure with $10.5bn under management, for $1bn. Last month BlackRock partnered with Microsoft on a $30bn artificial intelligence investment fund to help finance data centres.

“This market is so massive in terms of the data centre demand,” Arougheti said. “There is still a significant undersupply of capital to meet that demand.”

The Turf War Between Tennis and Pickleball Is Escalating

The U.S. Tennis Association says that 10% of courts in America have been taken over or repainted since the pickleball boom began

Throughout the spectacular rise of pickleball in the U.S., American tennis has always insisted that there was no war between the two sports. More people picking up rackets of any kind, the U.S. Tennis Association argued, could only be a good thing.

But on at least one front, there is no longer any denying that tennis and pickleball are in direct conflict. The battle for court space has arrived—and tennis is losing ground fast. Today, the USTA says, at least 10% of tennis courts in America have been taken over and repurposed for pickleball.

“There are not enough courts to support tennis growth,” says USTA chief executive Lew Sherr. “And court infrastructure being compromised with people playing pickleball on those courts or courts being repainted.”

The land grab should come as no surprise considering pickleball is the fastest-growing sport in America, according to the Sports and Fitness Industry Association. In February, the SFIA reported a 223.5% increase in participation since the pickleball boom began three years ago, with more than 10 million people picking up a pickleball racket over the past 12 months. And all of those new players are now spread across 65,000 courts at some 15,500 facilities nationwide, according to USA Pickleball.

“If I was in tennis’s shoes, I know that that wouldn’t be something I would appreciate either,” USA Pickleball CEO Mike Nealy said. “The market will find its way.”

Players play pickleball in a park in Florida. Photo: Dirk Shadd/Zuma Press

The problem is all the more urgent for tennis as the sport experiences its own revival. The USTA expects to surpass 24.5 million players this year and has set itself a goal of having 35 million players by 2035. Sherr chalks up the growth of his sport, in part, to the pandemic—people were handed more flexibility in their work schedules and tennis was a socially distanced activity.

“But at a time that tennis is growing and experiencing really unprecedented growth, it does create stress,” Sherr says. “We’re trying, as best we can, to support tennis infrastructure.”

For private clubs, pickleball makes plenty of commercial sense. The same court that accommodates up to four paying customers for a doubles tennis match can be carved up into four separate pickleball courts, meaning that clubs can charge up to 16 players to rent the same real estate. All it takes to convert a court from tennis to pickleball is a few licks of paint.

“The fact that it’s just so much cheaper to paint than build new is a problem for us at a time that tennis has experienced growth we’ve not we’ve not seen in generations,” Sherr says.

Even top tennis players have been calling attention to the issue. At Wimbledon this summer, 24-time major winner Novak Djokovic said that he believed the economics of sports such as pickleball and its European counterpart padel meant that “tennis is in danger.”

“If we don’t do something about it,” Djokovic added, “we’re going to see more tennis courts converting to padel and pickleball because it’s cheaper.”

The USTA is ramping up efforts to fund more construction. But on the court, it’s also mounting a counterattack with its own chatty, tennis-adjacent game of minimal running. They call it Red Ball Tennis and, like pickleball, the USTA brands it as a “FUN adult social experience designed to bring new players to your courts,” according to the organization website.

Novak Djokovic playing a paddle tennis game in Spain in 2017. Photo: world padel tour/emilio cobos ha/European Pressphoto Agency

“If we were not growing or tennis players were defecting it would be very different,” Sherr says. “Participation is not zero sum, but the court space is.”

The catch: You share a van with strangers and can only leave from specific locations

Uber UBER 0.42%increase; green up pointing triangle can take you to New York’s LaGuardia Airport for $18, starting Tuesday.

The catch? The rides are in 14-passenger vans, and they only pick up and drop off at three spots in Manhattan. One Uber Shuttle route will go between Port Authority, Grand Central Terminal and the airport, while the second runs between Penn Station and the airport.

The trips to and from the airport cost $18 each. Uber is offering discounted $9 rides for the first month of service.

A regular Uber to LaGuardia can cost upward of $100, depending on the time of day. Shuttle services have long existed as an alternative, but they can take longer than a car and booking isn’t as familiar to people as firing up the Uber app.

Trips to Newark Liberty International Airport in New Jersey or John F. Kennedy International Airport can be even more expensive. Uber didn’t say when it might have service to those other major New York area airports.

Uber announced the new shuttles Tuesday as part of a climate event in London.

Gridlock and growth

New York and other cities around the world have struggled to deal with traffic congestion and vehicle emissions. In June, New York Gov. Kathy Hochul indefinitely paused plans to charge a $15 congestion toll on vehicles entering the core of Manhattan. The city had the worst gridlock in the world in 2023, according to transportation-research firm Inrix. And now more people than ever are flying in and out of U.S. airports.

Uber introduced Uber Shuttle in 2019 in Egypt and has expanded it to Brazil, India and Mexico. New York is its first airport location. The company plans to expand its shuttles to other airports, as well as events and other uses.

ETS, Uber’s shuttle fleet partner providing the LaGuardia rides, also has permits for Newark and JFK airports. Uber says it plans to work with other existing providers at other airports.

“I am on a mission to bring this affordable shuttle service to, honestly, as many airports as we can,” says Camiel Irving, Uber head of rides operations for the U.S. and Canada. “If I get my way, you’ll be hearing a flurry of regular announcements over the next couple of years.”

Last year, 15% of Uber’s ride bookings came from airport trips.

How to book

You can book an Uber Shuttle in the regular Uber app as soon as five minutes before your trip or as far out as seven days. You can reserve up to four seats, and each person can take one personal item and a 50-pound bag. Trips leave roughly every 30 minutes, but the app updates timing based on the real-time ETA.

You’ll get a QR code and unique PIN your driver must validate before you can board the bus. While operated by ETS, the shuttles have Uber branding.

There’s no surge pricing, but riders can tip and rate shuttle drivers in the app.

If you plan to take an Uber Shuttle from the airport, it’s best to book after you land. You can only get a full refund for the ride if you cancel 25 minutes before your booked departure time.

Shuttles begin Tuesday and will operate from 5 a.m. ET to 10:45 p.m. ET, seven days a week.

Move is part of CEO’s plan to simplify the business around three core segments

The details

The business could be worth more than $10 billion as a separately traded public company, some of the people said. The tax-free separation could be announced Tuesday.

The rationale

The move would support Honeywell Chief Executive Vimal Kapur’s plan to simplify the company’s business around its three core segments of aviation, automation and the energy transition.

Charlotte, N.C.-based Honeywell has a market value of more than $130 billion, with its shares down about 3% so far this year. That compares with the S&P 500’s rise of 19% over the same period.

The materials business is on track to notch revenue in 2024 of roughly $3.8 billion, or about 10% of Honeywell’s overall revenue.

It makes everything from polymers to performance fluids to additives used in industrial paints, plastics and asphalt, and includes its well-known Solstice brand, according to the company’s website.

The context

The separation comes as the industrials conglomerate has been on an acquisition spree in recent months, announcing many smaller, so-called bolt-on deals that build on a fresh strategy laid out by management roughly one year ago.

Kapur, a longtime Honeywell executive, took over the CEO role from Darius Adamczyk in June 2023.

Last December, Honeywell struck a roughly $5 billion deal to buy Carrier Global’s security business. That was followed by a $2 billion deal for aerospace-and-defense technology company CAES Systems, and a $1.8 billion acquisition of the liquefied natural-gas process technology and equipment business from Air Products.

By separating its advanced materials arm, Honeywell hopes that both it and the remaining company will have greater financial flexibility for dealmaking and other opportunities, the people familiar with the matter said.

Companies across industries have been streamlining their operations as investors demand clearly defined businesses that make stocks easier to value. Storied conglomerates including DowDuPont and General Electric have completed spinoffs or breakups in recent years.

ENQUETE - Selon nos informations le fabricant de systèmes audio est en procédure de conciliation pour rééchelonner sa dette et lever des fonds. Peinant à renouer avec le succès des débuts, il cherche des relais de croissance à l’étranger.

Un monument de la French Tech menace de s’écrouler. Devialet avait pourtant attiré à son tour de table la fine fleur du capitalisme français : Xavier Niel (fondateur de Free), Jacques-Antoine Granjon (de Veepee) et Marc Simoncini (de Meetic), ou encore Bernard Arnault, le PDG de LVMH (actionnaire de Challenges). Tous ont craqué pour cette start-up fondée en 2007, conceptrice d’un système audio hi-fi révolutionnaire. L’été dernier, dans la plus grande discrétion, l’entreprise a demandé, selon nos informations, l’ouverture d’une procédure de conciliation auprès du tribunal de commerce de Paris. « En général, l’objectif est de dénouer une situation qui peut être problématique, commente un avocat spécialisé. C’est un moyen de pression face aux créanciers et un signal d’alarme pour l’entreprise. »

La procédure peut durer quatre à cinq mois maximum. Objectif de la direction : rééchelonner la dette. Surtout, cela doit permettre de trouver un accord entre les actionnaires afin de procéder à une levée de fonds, dans l’urgence. « C’est la pire période pour chercher de l’argent, constate l’un d’eux. Le marché de la hi-fi est mauvais, les taux d’intérêt sont encore élevés et il y a un besoin d’argent rapide. Tout le monde s’est regardé avant de remettre au pot car les actionnaires actuels risquent de perdre leur mise. »

Si l’exercice décalé, clos en 2023, était positif, le dernier a creusé les pertes d’une quinzaine de millions d’euros. Le chiffre d’affaires, d’une centaine de millions d’euros, est en baisse de 20 %. L’entreprise conteste ces chiffres. « La conciliation permet de faire les choses correctement et de gagner un peu de temps », observe un bon connaisseur du dossier. Devialet devrait sortir de cette procédure d’ici à fin octobre, s’offrant un répit bienvenu après plus d’une année de soubresauts.

Deux dirigeants écartés

A l’automne 2023, en quelques mois, Devialet s’est débarrassé de deux personnalités clés de son management. Exit Franck Lebouchard, directeur général respecté de l’entreprise depuis plus de cinq ans. Pierre-Emmanuel Calmel, le dernier des fondateurs à avoir un rôle de direction, a aussi pris la porte. La fin d’une ère pour l’entreprise créée par l’entrepreneur Quentin Sannié, le chercheur Pierre-Emmanuel Calmel, le designer Emmanuel Nardin et l’ingénieur Mathias Moronvalle. Ces dernières années, le constructeur a multiplié les sorties pour surfer sur le succès initial de son amplificateur D-Premier utilisant une technologie hybride analogique et numérique. Si le lancement de son enceinte Phantom, en 2014, a été une réussite, la barre de son Dione, les enceintes Mania ou les écouteurs Gemini II n’ont pas renoué avec la hype des débuts.

« La société a cramé beaucoup d’argent dans du marketing, se désole un investisseur. Sans résultat positif au niveau des ventes. » Alors, pour gagner du temps, l’entreprise tâtonne. En 2018, Xavier Niel pensait probablement lier l’utile à l’agréable en lançant la Freebox Devialet à 480 euros. Un moyen de faire rentrer du cash pour le fabricant, tout en donnant les moyens à l’opérateur télécoms low cost de réaliser un coup dans l’univers haut de gamme. La vente du produit sera arrêtée cinq ans plus tard.

Entre-temps, Devialet continue de chercher des relais de croissance. Le constructeur a signé des partenariats avec Huawei pour commercialiser des enceintes sous sa marque sur le marché chinois, ou pour l’utilisation de ses algorithmes de traitement du son. Ce qui a généré de la trésorerie rapidement, mais a abîmé l’image premium du fabricant français. Au printemps 2023, Devialet a conclu un accord pour embarquer ses produits dans les véhicules électriques du constructeur de Shenzhen BYD.

Mesures d’économies

« Durant les cinq années de direction de Lebouchard, le plan était moins sexy que celui des fondateurs, estime un investisseur. Mais la gestion des stocks et la création des gammes de produits étaient efficaces. » Comme tout le secteur de l’électronique grand public, l’entreprise a profité de la période Covid, mais elle a aussi souffert du fort repli depuis la guerre en Ukraine. « La trajectoire de Devialet était belle car elle a permis de dépoussiérer toute l’industrie, reconnaît un concurrent. Mais elle n’a pas pu dégager d’économies d’échelle fortes pour jouer dans la catégorie des Sony, Apple ou Sonos. Sans réseau de distribution compétitif, vous vous faites laminer. »

Face à ce constat, Jacques Demont, le directeur général depuis février dernier, a enclenché le plan de la dernière chance. Des économies d’abord. L’entreprise compte 350 salariés, soit une cinquantaine de moins qu’à son apogée. Ensuite, elle prévoit de quitter son siège de six étages dans le VIIIe arrondissement de la capitale. Enfin, le nouveau patron veut améliorer le rythme de sortie de nouveaux produits. « On ne peut pas avoir un Phantom tous les dix ans, concède cet ex-manager de Tesla. Nous ne sommes pas là où nous devrions être. »

Lire aussiLa pépite du son Devialet exporte son succès à l’international

Pour augmenter les recettes, Devialet compte accélérer à l’international. En Chine, où l’entreprise ouvrira deux magasins avec un partenaire à Shanghai et à Pékin d’ici à la fin d’année. Aux Etats-Unis, où elle compte sur le rappeur Jay-Z, actionnaire via son fonds Roc Nation. Devialet espère aussi beaucoup du Moyen-Orient, où Jacques Demont veut ouvrir dix boutiques d’ici à 2027. Le nouveau plan prévoit de diversifier le chiffre d’affaires en ciblant les entreprises, notamment hôtelières. « Nous discutons avec Accor et Fairmont, explique le patron, qui s’inspire de l’expérience de Nespresso. J’ai fait la même chose dans le passé en installant des machines à café dans les chambres. »

Alpine dans le viseur

Côté partenariats, l’épisode avec Huawei devrait faire long feu. Dans les voitures, Devialet lorgne Alpine pour prolonger le partenariat conclu avec la marque pour équiper le modèle A290. Car ce plan de relance ne lui permettra peut-être pas de sortir la tête de l’eau à temps. Pour un investisseur de la première heure, « la boîte est dans une situation critique, ce n’est pas certain qu’elle survive ». Un comble, alors qu’elle a déjà levé en tout près de 200 millions. Comme un signe, Devialet prévoit de sortir un nouveau produit cet automne. Nom de code : Phoenix. Sa mission : lui permettre de renaître de ses cendres.