We add Vitec Software to the Partnership Investing portfolio. This serial acquirer reminds us of a smaller Constellation Software with lots of room to grow.
Excellent write up. Any idea why they issued equity in late 2022?
Vitec spends around 10% of their revenue on maintain capex, which could be good to know.
i think it might be hard to keep the growth rate over time since its just a number of these busnisses that will be up for sale each year. 1-5 historically as you mention. Maybe need to go into Europe to increase aquicition frequency?
Another similar company is CSAM Health in Norway, they specialice in e-health though and are at an even earlier stage ~350mNOK in rev. Higher organic growth and margins though, and also cheaper. Maybe thats the way you disrups CSU and Vitec, by consentrating on one nische to become the prefered buyer?
Could also recommend looking into Protector Forsikring, like Geico they grow from being the most efficient insurer with huge cost benefits over peers. Long runway and great leaders. Last but not least, a bargin due to some bad luck last years and damage inflation that they underestimated at first but have sorted out now with huge price increases.
Any idea what was not that good? Why did it tank today after report?
Thank you for the good write-up! Do you know what multiples they typically pay pre-synergies and where the biggest synergies/value creation is realized? E.g. do they typically raise prices of targets?