Portfolio Update January 2024
Supreme plc closes new acquisition, CSI tender for Crealogix successful
Nothing on here is investment advice. Do your own due dilligence.
Supreme plc strengthens wellness/sports nutrition segment
My second largest holding, Supreme plc (AIM: SUP), has acquired the protein production assets of FoodIQ UK Holdings for a consideration of £175k. According to the press release, the manufacturing facility is highly automized, only opened 18 months ago and cost almost £1.2m to build. Supreme expects that this facility will increase its production capacity in the wellness/sports nutrition segment by around 40%. At first sight, this looks like another great, dirt-cheap acquisition by Sandy Chadha.
Crealogix takeover by Constellation Software
End of last year, Vencora, a subsidiary of Volaris/Constellation Software, acquired ~51% of the shares of Swiss banking and wealth management software provider Crealogix from the founders. Subsequently, they put out a tender offer for the remainder of the outstanding shares. The tender was conditional on Vencora being tendered enough shares to reach a 2/3 majority, which is what they need in order to be able to delist the company in Switzerland.
The offer Vencora made was at CHF 60 per share, which is close to the all time low. Their valuation translates to LTM multiples of MC/Rev of ~1x, EV/Rev of ~1.4x and EV/EBITDA of ~11.3x (based on TIKR data). Since Vencora only needed another ~15% of the shares for the delisting and many investor do not want to be invested in a delisted company, I thought they might just reach enough to delist Crealogix but never enough to squeeze out minority investors.
Since there is a huge community of people following CSI that are familiar with its playbook on operational improvement, I thought many investors would jump at the opportunity to co-invest alongside CSI and buy up as many shares as they can in Crealogix (which was even trading at a small discount to the tender price). Even more so after Sygnity, another publicly listed company where CSI/Topicus is the majority owner, has done so phenomenally well.
Turns out I was wrong. Crealogix put out a press release last week stating that >96% of shareholders had tendered their shares. Consequently, Vencora will likely be able to squeeze out the remaining <4% as well. It is still a bit of mystery to me why so many people tendered their shares at this price. Had they done any research, they would have known what CSI is able to achieve with the companies they acquire. Sad to see this potentially very interesting investment opportunity go.
Dividends
Datalab Tehnologije, Supreme, Onlineformapro
Current portfolio overview (by size of position):
Sygnity SA
Supreme plc
SUTL Enterprise
Bravura Solutions
itim Group plc
Datalab Tehnologije
Cab Payments
Onlineformapro SA
Thanks. I would love to read your thoughts on onlineforma pro in a future post if you can.
I am french and even with this I dont really understand the company.