Private Equity Deals
Outlook Investment Group added to their investment in GrayMeta, a start‐up whose software uses cognitive software tools (speech to text, facial recognition, object recognition, nudity, etc.) to help customers efficiently manage all their data, whether audio, video, pictures or text. This results in unprecedented and intuitive ways to access an organization’s vast digitized archives, with filenames no longer being the insight into content.
Bloomberg named GrayMeta one of the 50 most promising startups in the World of 50,000 companies evaluated.
Outlook has partnered with Syndicate Chain and has officially closed on a $10,400,000 million investment in the Grab Series H Preferred round. A number of new investors participated in the round, led by the $1.0 billion from Toyota, with meaningful allocations from Macquarie, Mirae, Oppenheimer, Lightspeed and Ping An. Press from the WSJ and Bloomberg provide relevant insight from Grab President Ming Maa on the financing. Investors may find the recent Harvard Business Review article and Recode interview with Co-Founder Hooi Ling Ten to be insightful on go-forward strategy.
In January 2017, Outlook added to their investment in PAX Labs as part of a $55 million insider follow‐on round. PAX Labs is a vaporization technology company who is reinventing the smoking experience with innovative, premium vaporizers. PAX exceeded revenue goals across all three product lines (PAX 3 – the #1 high‐end vaporizer, JUUL – the #1 independently owned e‐cigarette, and Pax ERA – newly introduced oil vaporizer with Pax manufactured oil pods) in the first quarter. PAX realized $40 million in 1Q 2017 revenue compared to $60 million for all of 2016. Ecigarette consumption increased 34% year over year and JUUL’s market share increased from 2% to 15% in the past year.
This much‐improved revenue growth allowed the company to realize $7 million in EBITDA 1Q 2017 (instead of realizing $10 million in projected 1Q losses).
Outlook has sold two investments in the company with returns ranging from 7x to 20x. Outlook still maintains an investment in the company and JUUL now has over 60% of market share.
Outlook Investment Group joined Outlook Development Group in March of 2017 in adding to their investment in Earnest, an online student loan refinancing, personal loan and home mortgage lender. Earnest is partnering with Intuit (Turbo Tax) to source new customers (this provides Earnest direct access to potential customer’s income, student loans and mortgages). Earnest closed their most successful securitization to date in May ($175 million, 3x oversubscribed, rated AA (high) by DBRS, senior bonds priced at L+100bps (Earnest’s previous deal priced at L+145bps)).
In June, the WSJ listed Earnest as one of the top 25 tech companies to watch (Earnest is #17). Companies included in the list are less than 6 years old with a valuation between $50 million to $500 million.
Outlook Investment Group joined in adding to the ODG investment in Industrious Office, the second‐biggest U.S. co‐working firm by number of locations (behind WeWork). Industrious raised an additional $25 million at a $142 million pre‐money valuation in 2017 in order to continue expansions efforts nationally. Industrious recently completed their Series C raise in 1Q 2018 at a $275 million pre‐money valuation.
Malibu Vision Company
Outlook Investment Group joined ODG in investing $2 million alongside Peak Ridge Capital Group (www.peakridgecap.com), to acquire a large stake in the largest vision insurance company in California. Management plans to use the insurance companies network of insured lives and doctors to form the foundation of owning and operating a high margin, vertically integrated retail network. Management retained Key Management from one of the largest eyeglass and sunglass companies in the World to implement this business plan. Malibu will build a network of practices, manage the supply chain and create a 21st century retail solution across owned or contracted stores.
This business plan is well timed due to recent changes in California Law which previously prevented optical companies to sub‐lease space to opticians (i.e. an optometrist could not be located next to a retail store).
Project Pharma (Optio Rx, LLC)
Outlook Investment Group made a Private Equity investment alongside Outlook Development Group into Optio Rx. The opportunity led to the acquisition of a Specialty Pharmaceutical Company specializing in the Fertility space. In addition, subsequent acquisitions of additional specialty pharmacies (pain medicine, Hemophilia, life-style, etc.) as bolt on acquisitions have and will continue to take place. The first two acquisitions closed in May 2018. We have invested in a side car via Outlook Development Group in tandem with Cold Bore Capitals PE Fund. As a group, we have invested over $2MM into this opportunity and then have the majority rights to participate in future fundings of bolt on or roll up acquisitions as we grow this business both organically and through acquisition.
Real Estate Deals
The Preserve at Longbeach Village: invested in a single‐family home redevelopment called The Preserve at Longbeach Village, located in Longboat Key, FL. The Preserve sits on 2.33‐acres that will be subdivided into 12 single‐family home parcels. Construction commences this year with model homes scheduled to be delivered in Summer 2018. Purchased the land for $1.85 million (recently appraised As Is for$2.85 million). Anticipate 3‐year sell‐out with Outlook’s investors realizing 80%+ return over 3 years or 26% annually.
Example of Boca style model home:
Nashville Townhomes: invested in two townhome developments consisting of 91 townhomes across 5.75 acres. Both projects are on the Western side of the City, approximately 3 miles west of downtown Nashville in The Nations and Charlotte Park submarkets. Anticipate three to four‐year sell‐out with Outlook’s investors realizing 73% return on equity over 3+ years or ~20% annually.
Plymouth-Livonia NNN Portfolio
Outlook Investment Group partnered with Outlook Development Group (“ODG”) and ICAP Development (Inland Companies Development Arm) to acquire a stabilized industrial portfolio in Plymouth and Livonia submarkets in metro-Detroit. The portfolio consists of four (4) single-tenant net lease buildings, ranging from 31,000 sf to 42,000 sf with 150,950 sf in total. The property is 100% occupied by NNN leases with the following tenants: one building is leased to Cintas ($4 Billion in annual Revenue), another to Trane (wholly owned subsidiary of Ingersoll Rand with $14.8 Billion in annual Revenue), another to Johnson Electric ($2 Billion in annual Revenue) and the last to Shiloh Industries ($1 Billion in annual Revenue). Project level equity multiple is 2.99x over 10 years or 29% annualized. Outlook's investors receive a preferred return of 10% (paid quarterly). Outlook's investors equity multiple is 2.2x over 10 years or 22% annualized.
710 West Grand Ave, Chicago (www.seven10westapartments.com)
710 W Grand: construction is well underway of this ground‐up, Class A, 105‐unit multi‐family project with 5,400 sf of ground floor retail located in Chicago’s River West/Fulton River submarket. Outlook broke ground Summer 2016 with opening scheduled for 1Q 2018.
Latest News: The apartments have reached over 97% occupancy as of early June 2018.