Long | VMS SaaS Co | 15-20% Growth, 15x EBITDA, and A Likely Sale Process Could Fetch 50%+ Premium

Attractive Long-Term VMS Investment with a Potential Short-Term Catalyst

“Software contracts are better than first lien debt.”

Robert Smith, Vista Equity

Hello OpTrackers,

Today I am covering an interesting potential investment on the long-side. Here’s a quick snapshot of the setup:

• Best-in-class VMS software business with durable 15-20% growth story

• Trades for ~15x NTM EBITDA despite monopoly-like position in core market and significant pricing power

• Weaker competitor in the same end-market was sold for 20x EBITDA to strategic acquirer in a competitive auction

• Insiders would be well compensated in a change of control transaction and large shareholders have catalyzed change of control transactions at past and current holdings

• Corporate actions indicate the company is positioning itself for a sale

• Path to multi-year 20%+ CAGR as a standalone independent company or a near-term 50%+ return catalyzed by a sale of the business

Business Overview