Maxar's $6.4B buyout; Goldman Sachs layoffs: The National Observer Dec. 19, 2022

Good morning, readers.

A publicly owned space technology company has secured access to a stream of funding as a private-equity firm steps in to buy it for billions of dollars. Meanwhile, Goldman Sachs is planning significant layoffs, and analysts forecast a slowdown in major sectors of the commercial real estate market in 2023.

Westminster, Colorado-based Maxar Technologies Inc. (NYSE: MAXR) plans to exit public markets via a $6.4 billion buyout from a private-equity firm, reports Greg Avery of the Denver Business Journal.

Maxar, which builds satellites and spacecraft and sells Earth-observation data, has agreed to a deal with Boston-based Advent International Corp. at a price point that more than doubles its pre-deal stock price. Maxar will look to use the deal to access more resources and capacity for investment, letting it acquire new technologies and chase growth.

'Advent came to speak to us because they're excited about the growth and trajectory of the company,' Dan Jablonsky, Maxar's CEO and president, told Avery.

Maxar has already acquired a string of small businesses in recent years to add technology capabilities, most recently buying Wovenware, a Puerto Rican company with 150 employees working in artificial intelligence and machine learning.

Other aerospace news: Lockheed Martin Corp. hired nearly 500 workers at its Orlando, Florida Missiles & Fire Control campus in 2022 — and it has even bigger growth plans for 2023, when it plans to hire another 600 at the site. Like many other companies, one of the biggest hurdles Lockheed faces right now is talent acquisition and retention, said Lockheed Missiles & Fire Control Executive Vice President Tim Cahill.

Goldman Sachs Group Inc. (NYSE: GS) plans to lay off up to 4,000 employees, or about 8% of its workforce, reports I-Chun Chen of the New York Business Journal.

The New York-based investment bank also plans to cut, and in some cases eliminate, the annual bonuses of underperforming employees, according to The Wall Street Journal.

The layoffs come as Wall Street experiences a slow down in mergers and share offerings. Last week, New York-based Morgan Stanley (NYSE: MS) cut about 2% of its workforce, or about 1,600 jobs, less than two months after it reported a 29% drop in third-quarter profits and 12% decline in revenue.

In October, Goldman said it planned to realign its businesses in the wake of "the backdrop of uncertainty and volatility in the market.' CEO David Solomon said Goldman planned to combine its investment banking and trading businesses into one division, while combining its asset and wealth management into another unit.

Commercial real estate faces slowdown in 2023

Higher interest rates and the threat of a recession are expected to considerably slow commercial real estate leasing and investment activity across the board in 2023, reports Ashley Fahey of The Business Journals.

Dallas-based CBRE Group Inc. predicts construction slowdowns and declines in asset value, investment volume and leasing activity.

It's not unreasonable to expect a 15% to 20% drop in values next year, said Indraneel Karlekar, global head of research and strategy at Principal Real Estate Investors. And buildings in gateway cities could see 30% to 40% declines in value next year, he said.

The office market in particular is facing consolidation of demand as renters look to cut space in an attempt to limit strain on their balance sheets. That's been especially true in tech, but even cities with diversified economies are starting to see sublease space on the market rise. Colliers International Group Inc.'s most recent investor survey found 55% expect losses for the office sector in 2023, the most negative outlook among property types surveyed.

Incarceration is undoubtedly one of the most trying periods of a person's life. But at the point many are working to transition back to society after release, the barriers they face to education and employment can, in some ways, be more insidious, reports Hannah Denham of the Washington Business Journal.

'We sentence them not only to prison, but if we don't give them education and trade skills prior to them getting ready to come home and prepare them, they end up in this, what I call, invisible correctional facility,' said Tony Lowden, vice president of reintegration and community engagement at Falls Church-based ViaPath Technologies and the former reentry czar for the White House. 'They are locked out of being able to get an education or get a trade.'

Employers and educators have access to resources — nonprofits, case managers, human resources personnel trainers, and federal and state incentives and aid — that should help them employ or enroll returning citizens, but most formerly incarcerated people still have trouble securing such opportunities. These institutions are leaving an untapped talent pool, paving a quicker path to recidivism and resulting in more than $78 billion in estimated economic losses in a year.

Money flowing to these NFL stadiums

Two National Football League stadiums are at the center of high-dollar projects.

First, the Tennessee Titans in Nashville have secured financing for a new $2.1 billion stadium. It will get $200 million in loans and grants as part of the NFL's G4 Stadium Program, $500 million in one-time bonds from the state and $840 million from the Titans, NFL and personal seat license sales. The remaining $760 million would be funded by debt issued through Nashville's Metro Sports Authority.

Meanwhile, Denver's Empower Field at Mile High will get a $100 million upgrade in 2023, including a new video board, renovated suites, new concession stands and a larger team store. Denver's Metropolitan Football Stadium District approved $12 million in funding for the project, and the remainder will be assumed by the Denver Broncos with G4 financing, the team said.

How to determine which employees are local

As companies continue to reckon with the post-pandemic workplace, many are facing a problem identifying which of their employees count as local, reports Lucia Maffei of the Boston Business Journal.

The answer was once straightforward, but the proliferation of work-from-home arrangements has complicated the question. In Massachusetts, for example, employers have come up with disparate answers in the absence of government guidance or regulation. Some employers even apply different criteria depending on who's asking the question, and have produced different answers when, for instance, providing notification of layoffs to the state as required by law, versus applying for economic incentives.

Definitions include employees who live in the state, employees working remotely who report to managers in the state, and employees who live in the state and work at least two days a week in the office (used by the council that oversees Massachusetts' Economic Development Incentive Program).

These definitions matter not just for economic incentive and regulatory purposes, but also for the companies themselves. Managers need to know which employees are where, and when they're working there.

'Where you are matters,' said Kelley Conte, senior vice president for human resources at Northborough, Massachusetts-based Aspen Aerogels Inc. "If I am in a physical building, and there's an emergency, I need to know who to notify.'

Get more how-to and workplace trend stories with The Playbook.

Also in the headlines

The CFO of Houston-based food-distribution giant Sysco Corp. (NYSE: SYY), Aaron Alt, will leave his position effective Jan. 6. Neil Russell, senior vice president of corporate affairs and chief communications officer, has been appointed interim CFO of the company.
Boston-based Taurus Investment Holdings and Boston-based Congress Group have reconsidered development plans in Miami's Health District, becoming the latest to change what was originally meant to be offices into a multifamily residential project.
SonderMind, a Denver-based mental health startup that was catapulted into unicorn status last year, has laid off 15% of employees at the company, totaling 50 people.

Third-generation chocolate business sees growth

Randy Young was a child who helped to bag candy for the Aglamesis Bros Easter holiday. At age 11, Randy learned how to watch the women behind the chocolate and then he was drawn to the production side due to the creativity.

Many of the original processes are still used today at the confectionary and ice cream parlor. Young is now the company's CEO, and the third-generation owner. Liz Engel, of the Cincinnati Business Courier reports that Young will lead the business through its first major expansion since opening a store in Montgomery, Ohio in 1970.

The company plans to renovate its Cincinnati flagship store and open new neighborhoods. The company also plans to open a new manufacturing plant. The opening of the new facility will enable Aglamesis significantly increase its chocolate production. This is a significant inflection point.

'It's been painful to try to supply the stores in the space we have now,' Young said. 'There's a fine line between homey and ridiculous, and we've stepped over it. It's time.'

Young shared that Jim Aglamesis (Young's stepfather, and second-generation store owner), spent 60 years at the helm, without ever thinking about expansion. He missed the interaction with customers which he was passionate about. He didn't want anything to compromise Aglamesis' quality commitment or name.

But the company's legacy footprint is now unable to meet demand for its products. It's time, finally, to grow.

'It's a gift the community has given us, saying, ‘Please, can you make more?'' Young said.