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October Round Up

Positive sector vibes...

Stuart Blackhurst's avatar
Stuart Blackhurst
Oct 31, 2024

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October items of interest that are on the periphery or were’t quite big enough to write a single post about (yet) in include:

Good news for the sector with CTDI investing in a new UK facility1. Only 20miles north from their Milton Keynes base, the Wellingborough superhub logistics facility will support carriers and OEMs with advanced logistics capabilities. Importantly, it will create 300 new jobs. Good stuff.

At the beginning of this month I covered Asurion’s latest account filing and struggled to find any hint of growth. So, it was good to read they have announced a new UK partnership with Google (store) for the “Preferred Care” offering on the Pixel range of devices (Phones, Tablets, Watches). The insurance product looks pretty standard at first glance with the usual accidental damage or accidental damage with loss & theft options. The payment option is single premium only, although financing is available on the whole basket at checkout via Klarna. Asurion administer the programme and it’s underwritten by WDP Insurance (Asurion) in Gibraltar. Google’s store entity (Ireland) account filings provide no revenue analysis, so it’s hard to suggest programme size. Nevertheless, this is a positive step.

Ingram Micro’s IPO raised $409.2m valuing the business at around $5.12bn a few billion less than the rumour mill reported a few weeks ago2. Only about 8% of the outstanding shares were listed for sale with Platinum Equity retaining the majority. Based on the FY2023 earnings of approx $353m the valuation gives an EV/EBITDA ratio of 7.2 and a P/E ratio of 14.7, a bit above TD Synnex, which, despite the IPO proceeds not making much of a dent in the long-term debt, all feels a bit reasonable. Strong early trading sent the market cap in excess of $6bn but it has subsequently fallen back to $5.7bn.

Platinum Equity's Ingram Micro valued at $6 bln as shares jump 15% in NYSE  debut | Reuters

The Genstar Capital - Likewize transaction I mentioned last month, seems to have been finalised. If you didn’t see S&P’s July note3, existing Likewize debt is to be restructured with a new package consisting of a $550m first-lien loan, a $50m delayed draw term loan which is ear-marked to fund part of Genstar’s purchase of the additional 35% equity stake and a new $125m revolving credit facility. The equity purchase transaction increases Genstar’s ownership to 80% with management and Brightstar Capital Partners retaining 20%. There’s almost enough information here to estimate a valuation, but we don’t know Genstar’s cash contribution, so at a complete guess given S&P’s previous notes: Total Debt (above) = $725m. EBITDA/Debt leverage ratio = 5.3x as of 20234, EBITDA = $137m. Typical PE multiples around 8-12x EBITDA, lets say 10, suggests an Enterprise Value around £1.4bn. Big guess.

Literally two hours after I posted another section (Part 6: Competition) of the UK Mobile Device Insurance market study, indicating that SquareTrade had no real (native) trade-in capability, Allstate announce they’ve acquired Kingfisher5. Classic. Congrats to Peter, Georgiann and the rest of the Kingfisher team. That’s a good fit and indicates Allstate’s continued commitment to the sector.

Alchemy Mobile Solutions announced a chunky 41% increase in processed devices and an even chunkier 60% increase in revenues over 20236. It will be another few months until the accounts are filed, so I’ll wait for those before I dig around a bit. Management look pretty happy (see picture in news release) and Macquarie (45% ownership) might be starting to figure out if there’s a way of wrapping up Alchemy, Raylo and Loop Mobile into something of public or private value. Any SME specialist insurance companies might be wondering if they can play too?

Recommerce has issued 28,000 carbon credits linked to refurbishing activities7. Until now I’ve been sceptical this was even possible. In the lifecycle of a device, carbon is only emitted. My novice understanding was that there are two points of potential carbon savings, or “avoided carbon”. Who made that shit up? The first is when a consumer opts to buy a refurbished device but, the net saving would depend on the CO2e of the new device they didn’t buy. How the fcuk you measure that I have no idea. The other is if the manufacturer uses reclaimed parts / materials over acquiring new raw materials, but again, how is that measurable? Yep, I need to educate myself and this is probably worth a future post. I’ve emailed Recommerce for more info on the certification process.

Peace

sb.

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1

https://www.linkedin.com/posts/ctdieurope_ctdi-uk-wellingborough-activity-7256589001317396480-v42Q/

2

https://www.bloomberg.com/news/articles/2024-09-30/platinum-equity-backed-tech-firm-ingram-micro-files-for-ipo

3

https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3215041

4

https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/sourceId/13083289

5

https://www.businesswire.com/news/home/20241014219868/en/Allstate-Protection-Plans-Enhances-Its-Portfolio-of-Offerings-for-the-Mobile-Industry-with-Kingfisher-Acquisition

6

https://www.wearealchemy.com/news/alchemy-achieves-record-revenue-fueling-circular-economy-growth/

7

https://www.linkedin.com/posts/recommercegroup_recommerce-carbon-credits-activity-7249719136430231553-kNqM


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By Stuart Blackhurst · Launched 10 months ago
In-depth market intelligence and company analysis in the consumer electronics lifecycle and protection sector. Delivering data-driven insights for executives and investors across the circular economy.

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