TARGET HOSPITALITY CORP THWWW
August 16, 2023 - 9:05pm EST by
member
| 2023 | 2024 | ||||||
| Price: | 14.10 | EPS | 0 | 0 | |||
| Shares Out. (in M): | 102 | P/E | 0 | 0 | |||
| Market Cap (in $M): | 1,436 | P/FCF | 0 | 0 | |||
| Net Debt (in $M): | 160 | EBIT | 0 | 0 | |||
| TEV (in $M): | 1,600 | TEV/EBIT | 0 | 0 | |||
Description
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| 32 | |
From today's Reuters article: "Advent International and Apollo Global Management are among the buyout firms exploring a potential acquisition of uniform supplier Vestis, according to people familiar with the matter... Private equity firm Clayton Dubilier... login to read the rest | |
| 31 | |
From today's VSTS earnings call: “Lastly, in response to preliminary proposals received for potential acquisitions of Vestas, we have retained Centerview Partners and Weill Gottschall. I want to emphasize that our management and board are focused... login to read the rest | |
| 30 | |
Thanks for your insight on taxes, etc. I agree 100% that CTAS is the best buyer and has the most synergies and can pay a huge premium. I think CTAS can buy it and divest... login to read the rest | |
| 29 | |
The best buyer, without a doubt, is CTAS. They have capacity constraints in their business, so need VSTS's capacity + can put through the most synergies into VSTS + have the lowest cost of capital.... login to read the rest | |
| 28 | |
my bad again. I hate exchange rates...$777 mm in USD is $707 mm in EUR. | |
| 27 | |
Thanks for your response.
Yes, I confirmed this as well. So PF EBITDA for IFRS on TTM basis would be $385 mm in US EBITDA + $392 mm (.14*$2800 in revs) = $777 mm in US... login to read the rest | |
| 26 | |
@repetek827, ELIS was talking about 14pts of margin (e.g., 1,400bps), not 14% higher EBITDA. So VSTS EBITDA under IFRS account be ~$800mm. I'm not sure that is meaningful for thinking about valuation (VSTS trades at... login to read the rest | |
| 25 | |
Yes. given the leverage and the ability/plan of Elis to leverage the deal even more, the margin matters a lot. I agree.
Watch/listen to this webcast from the other day. https://fr.elis.com/en/group/investors-relations/financial-calendar
I doubt many people have at all.
At... login to read the rest | |
| 24 | |
Your take is very interesting. But you lost me here: "Uniforms and textiles are capitalized as long lived assets at ELIS and not as Working capital as it is under GAAP. In that case, EBITDA is... login to read the rest | |
| 23 | |
Sorry, I had wrong details on Corvex. They own 17 mm shares (not 17%) and 12.94% of VSTS. | |
| 22 | |
I think the street is missing this and VSTS is worth a lot more than where it's trading. It's a unique asset that others will want and PE may take if they could.
Elis has no... login to read the rest | |
| 21 | |
Sept 5 (Reuters) - French workplace supplies provider Elis SA has approached Vestis the former uniform rentals business of Aramark with an acquisition offer, according to people familiar with the matter.
Elis first approached Vestis, which has a... login to read the rest | |
| 20 | |
I expect there is a very compelling PE buyout potential here where they take it over, fix operations, and flip it to CTAS once the FTC/takeover environment is better. I would think that is higher... login to read the rest | |
| 19 | |
Thanks.
I am pretty sure how this FTC would define the market! I might even say that Blake here is wearing an accessible luxury work uniform. Maybe that all changes in November.
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| 17 | |
This is what I wrote after FQ1: "The fear, until they explain it better, is they had a retention issue in FQ1 which is hurting revenue and keeping them from taking price". I should have... login to read the rest | |
| 16 | |
You mention VSTS being a possible acquisition target by Cintas or Unifirst. I agree that would make a lot of financial sense.
However...would an acquisition of VSTS by CTAS/UNF have any chance of not being blocked | |
| 15 | |
2H implied run-rate EPS is 50-60 cents of annualized earning
Low-4x leverage despite trailing net lvg is high-3x
Organic decline for next 2 quarters and likely for another 1-2 quarters after that (hard comp on 1H going... login to read the rest | |
| 14 | |
Trading roughly in-line with UNF. Hard to justify a premium after an earnings report like that. Will probably be deservedly in the penalty box for a while. The leverage is a killer for the equity. | |
| 13 | |
Stock trading like they just committed accounting fraud? I get why this is a huge shock of confidence but the free cash flow yield here now seems pretty compelling? | |
| 12 | |
Revenue shortfall is due to 1/ new sales ramping slower than expected to offset rollover losses (not up to expectation), and 2/ a decision to moderate pricing as company prioritizes customer retention for LT.
I can't... login to read the rest | |
| 11 | |
Pretty substantial reset in expectations. Maybe we will get more color on the call -- do you think they have just kitchen-sinked things after missing two quarters in a row or is this a case | |
| 10 | |
I think the two types of Direct Sale customer losses are poorly understood, and explains some of the deceleration in revenue. The company could have done a better job disclosing this. (1) Direct Sale customer... login to read the rest | |
| 9 | |
You generally nailed the ongoing narrative / fear -- the idea that people are afraid they are going to miss their FY revenue guidance by 50bps and be seen as a "can't beat and raise"... login to read the rest | |
| 8 | |
Chalkbaggery, I don't think it went well. They didn't explain why FQ1 decelerated or why they'll hit FY 2024 guidance. At least they finally admitted that FQ1 revenue missed their plan!
They've given us some of... login to read the rest | |
| 7 | |
Glory Warriors, what did you think of the Jefferies call this morning? | |
| 6 | |
Thanks for all the feedback --
In my view, the messaging was poor, the topline maybe marginally frustrating but seems ok, but the core of the story here is the margin performance. Hard to imagine this... login to read the rest | |
| 5 | |
On the COO leaving, we received the same color as Chalkbaggery. There was a personality conflict between Chris and Kim. I'm surprised the market took his departure so hard, he had only been there for... login to read the rest | |
| 4 | |
Not the author here. I agree with your general takes, second quarters in a row in outstanding underlying margin expansion delivery (which is higher than headline margin expansion, given public company expense), so should the... login to read the rest | |
| 3 | |
Stock reacted pretty extremely to an in line quarter -- which we thought was totally fine (they were above slightly on EBITDA). Some of this may be the run the stock head but most of... login to read the rest | |
| 2 | |
https://www.sec.gov/Archives/edgar/data/1967649/000120919123058991/xslF345X05/doc4.xml | |