Buy-side business analyst | Focus on moats, micro caps and gold royalties, why not? | I never skip leg day.
Spain
Joined July 2017
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$CSU.TO $TOI.V
Here's how a disrupted legacy software business adds value to its customers:
- Yonder spent 4 months working side-by-side with public libraries in the 🇺🇸 and 🇨🇦 to identify their needs, which ultimately led to the development of an AI assistant within a month
- This AI assistant was probably built for bibliocommons.com/, a subsidiary of TSS
- CSI owns ~7 BUs in this vertical + 2 for TOI. These BUs can add the same features in a matter of hours
tss-yonder.com/insights/how-…
$CSU.TO
Volaris is acquiring Triona AB for ~$25M
- ~1x revenue multiple
- 200+ employees
- Growing revenue DD but unprofitable. Volaris will fix that quick
- Founded in 1991. Went public in 2022 in a weird secondary market (NGM Nordic SME, no access from IB)
Source: volarisgroup.com/offer-infor…
$CSU.TO
Total Service, a subsidiary of Jonas Software, switched its payments processor from OpenEdge ($GPN) to CSIPay in TWO hours
Talk about switching costs
Source: jonassoftware.com/constellat…
$BSP is getting a lot of love as of late
Hot new leveraged software roll-ups are cool, but most fail miserably
I give them a 50% chance of generating a positive return vs the NASDAQ over the next 5 years
The other 50% is the probability of blowing up badly
BREAKING: Inside Bending Spoons $BSP
Milan, Italy
@bendingspoons has completed 50+ acquisitions & never sold a single one
Buying up some of tech's most recognizable companies, including AOL, Airtable, Vimeo, Eventbrite, Evernote, WeTransfer, Tractive & Brightcove, with Miro now under agreement.
I went to Italy to sit down w/ 4 leaders behind one of tech’s most aggressive acquisition machines:
› Luca Ferrari (@luke10ferrari), Co-Founder & CEO
› Francesco Patarnello (@frapatarnello), Co-Founder & Head of M&A
› Matteo Danieli, Co-Founder & VP Product
› Valentina Jerusalmi, GM of AOL
The thesis: acquire great products, centralize the capabilities underneath them, & unlock value at a scale that would be difficult for each company to build independently.
We cover:
› 1,000 potential acquisition targets & 5–10 deals per year
› How Bending Spoons’ centralized platform creates value across acquisitions
› “Startup mode,” talent density & cutting headcount after acquisitions
› Why even founder roles & the CEO job are up for grabs
› Rebuilding AOL & what happens after Bending Spoons takes over
Head of M&A Francesco Patarnello on what they look for:
“We want to see our platform be able to unlock a lot of value if applied to that business. That can mean different things. Sometimes it's ability to attract talent, process data & get insights, [or] attract new users.”
Stats:
› 50+ acquisitions completed, & never sold a material business
› 500M+ monthly active users, 9M+ paying customers
› $2.64B of enterprise value across Airtable & Miro in 5 weeks
› $1.5B for AOL, $1.38B for Vimeo, $500M for Eventbrite
› Under 1% voluntary churn, with equity that carries no vesting
This is Part I of a II-Part Series
Full Sit-down Interview w/ CEO Luca Ferrari coming next..
𝐓𝐈𝐌𝐄𝐒𝐓𝐀𝐌𝐏𝐒
(00:00) Bending Spoons Co-Founders Luca Ferrari, Francesco, Matteo & GM of AOL Valentina
(01:11) The two traits that matter most
(03:16) The Biggest lesson from every acquisition (Airtable, AOL, Miro...)
(05:37) Why the CEO didn't ring the Nasdaq bell
(07:37) The Acquisition that got away
(15:21) What makes a company worth buying
(18:27) Why Founders choose Bending Spoons
(21:30) Why Employees can cash out early
(28:44) Choosing to step aside as CPO
(40:10) What "Startup mode" actually means
(49:31) Why most product ideas fail
(51:25) The emotional story behind the IPO speech
(57:39) Betting on Bending Spoons early on
(1:01:00) The Mindset behind the rapid growth
(1:05:22) What actually happens during an acquisition
(1:09:44) Why they never ship without testing
(1:16:17) What's coming next for AOL
Volaris acquired the global market leader in bird detection systems for onshore wind farms. Those systems require proprietary hardware that must comply with regulatory requirements🐦🐦🐦
I didn't even know such systems existed 🤣
Fun fact: Several employees are ornithologists 🦉
Vibe-code that!
globenewswire.com/news-relea… $CSU.TO #SaaSpocalypse
Banger!
(raia is a $CSU.TO company via the VMS Ventures fund)
$CSU.TO Here's how to milk a 🐄
Harris bought Altera for $670M . They financed this acquisition issuing $335M in debt, issued at the Altera level, so CSU really paid $335M in equity (50% debt / 50% equity)
Over the LTM, Altera generated $104M in FCFA2S, impliying a "ROE" of 31%. Not bad for a declining asset 👌
It's also remarkable to see the FCFA2S margin remaining fairly stable despite revenue declines YoY
Fun fact: Altera generated $400 million in FCFA2S since its acquisition, which closed in May 2022. This asset paid for itself 🤝
I almost got the revenue right, but I was waaay off on the multiple
Paul Treiber (RBC) estimates that $CSU.TO paid C$400 million for DerbySoft, implying a 4x revenue multiple, but CSI is expecting the usual IRR. This was likely financed as a "CSI-LBO" (50/50 mix of debt and equity)
I'm curious to see DerbySoft's growth and margins 👀
$CSU.TO Significant acquisition, published at the parent level 👀
DerbySoft offers online travel commerce solutions used by 260,000 hotels globally
The company has ~450 employees. Assuming $200k in revenue per employee, we got ~$90MM in annual revenue, so CSI might have acquired it for $108-135MM (assuming a 1.2-1.5x revenue multiple)
Keep it going!
$CSU.TO mothership earnings are out:
- Revenue +17% YoY
- Recurring revenue organic growth just 2% 😕 (CC) It would be 4% excluding Altera
- $1.7B in acquisitions 🤯($893M deployed + $818M in commitments, both including deferred payments)
- FCFA2S ex-IRGA ex-CWC +15%
Turns out that DAMION software is also used by all the 11 DAs in the state of Massachusetts
"The MDAA has been asking the state for money to replace DAMION for years"
Talk about switching costs
nasser.blog/dial-up-justice/ $CSU.TO
Amazing.
As of 2022 SEATTLE CITY ATTORNEY’S OFFICE was still using Constellation Justice Systems (renamed now) software from 1996
“And has been trying to replace it for 5 yrs”
Is VMS sticky or what! 💿 $CSU.TO
look at those icons haha.
More to come from the 90’s soon. 👀
Migrating DAMION software takes 3 to 10 years and costs a LOT of money
Initial estimates for the migration in Massachusetts are $7.5 million
Fun fact: Only four vendors meet the tender requirements in the US, and one of them is @equivantnews , a subsidiary of Volaris $CSU.TO
Q3 is being significantly better for acquisitions for $TOI.V
There has been an acceleration in acquisitions YTD. This is nice to see 👀
- Q1 total consideration: €23M
- Q2: €40M
- Q3 to date: €56M+
$TOI.V earnings are out
- Revenue +18% YoY
- Maintenance organic growth 6% 👌
- Margins flattish YoY (they might require some adjustments...)
- Not a great Q for acquisitions with $40M deployed
- FCFA2S metric for this Q is totally useless due to the extraordinary dividend received from $ACP.WA
This beauty is yours for ~27x EV/FCFA2S ex-CWC
cc $CSU.TO
$TOI.V earnings are out
- Revenue +18% YoY
- Maintenance organic growth 6% 👌
- Margins flattish YoY (they might require some adjustments...)
- Not a great Q for acquisitions with $40M deployed
- FCFA2S metric for this Q is totally useless due to the extraordinary dividend received from $ACP.WA
This beauty is yours for ~27x EV/FCFA2S ex-CWC
cc $CSU.TO
$CSU.TO
Volaris "accelerated" 150+ BUs throughout the year with AI workshops.
I'm guessing that they now have ~250 BUs under their umbrella. Perhaps 60%? of Volaris' BUs have benefited from the group's overall learning in AI.
SaaSpocalypse cancelled for $SAP
Backlog growth accelerates to +26% YoY, growing faster than revenue (+24%) 📈
Fun fact: a lot of customers that built custom agents came back to SAP due to the overwhelming complexity of managing agents 🤯
This DD grower is yours for a 15x P/E NTM, the lowest multiple of the last decade 🤷♂️
