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THRY - Thryv Holdings Inc


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This isn't my original ideal. I took it from Jeff but it does look like a very interesting opportunity to convert SMBs in the yellow page space to a CRM / SAAS based product.

 

Listen to the conference calls and investment conferences. These guys have experience executing on plan and in today's marketplace, they are pivoting the business very well.

 

SAAS!!!

 

HERE IS THE KICKER... Thryv also has a Saas business, called “Thryv.” Interestingly, they used their dying platform from the Yellow Pages, to get users on the white label SaaS business. To me, THAT is really interesting and shows a VERY creative way to use and monetize assets of an old business, and keeping development costs down. In the instance of other companies, such as Sears or virtually every local newspaper out there, there was never enough execution. But Thryv has a legit customer base of approximately 45,000 users, who are paying well over $200/month for services. Per management, this business is already profitable. Through diligent selling of their workforce, the company literally got 10% of the Yellow Page customers (and are still trying to get more, look on their webpage), on to the Thryv platform. Walsh refers to this strategy of “hunting in the zoo” for customers. If you have yet to check out the software- it is absolutely fantastic. Actually, it is PERFECT for the home services sector. The program is SUPER simple, and quite effective. It won’t scare anyone away with too many options, settings, or frills that no one needs, or wants- which is key. SaaS platforms such as Service Titan and CoConstruct (which I use, and love) are both great, but for a lot of smaller shops, they are just waaaaayyyy to complicated for what they need. And that is how you get past a lot of resistance for small businesses that don't have the time to learn a complicated system. Simple is the key, and Thryv is simple.

 

http://ragnarisapirate.blogspot.com/2021/01/thryv-thry.html

 

If you are in the SMB space, you know there is a growing demand for their product. Particularly in the base of customers that are still advertising with the yellow pages.

 

They are "hunting in a zoo."

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That's also a great DRMish writeup.

 

Should be promoted to the YOLO crowd on Reddit.

 

edit: My bad, just noticed no options trading and no shorts  :-\  a no go for the YOLO crowd?

Does look interesting from a longish perspective though.

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My only reflexive instinct is the major cash generator is a dying business and they slapped a good bit of leverage on there. My take was its an interesting long because of the SaaS growth business hidden in there, vs. other legacy media businesses that lack similar catalysts. I can see a bumpy ride here as the leverage and declining business combination could obscure improving SaaS results for years.

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Not sure how much of this business is in runoff or if it will even happen.

 

www.globenewswire.com/news-release/2021/01/06/2154110/0/en/Thryv-Inc-to-expand-international-footprint-with-intent-to-acquire-Australia-s-Sensis-Holdings.html

 

www.sensis.com.au/sensis-data-solutions

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Not sure how much of this business is in runoff or if it will even happen.

 

www.globenewswire.com/news-release/2021/01/06/2154110/0/en/Thryv-Inc-to-expand-international-footprint-with-intent-to-acquire-Australia-s-Sensis-Holdings.html

 

www.sensis.com.au/sensis-data-solutions

 

It is in run off mode. But what is cool here, is that a PE firm owned it, and had it for like... 7 or 8 years. So, they were looking to sell, hence the good price. Not a lot of people lining up to buy... AND THRY can harvest profitability from these sorts of businesses, and grow their SaaS business because of the interesting setup they had at YP. I think that there will be more of these deals coming.

 

I also wouldn't be surprised if they refinanced ALL their debt and got a better rate as part of this deal. Seems to me like it would be easier to underwrite debt for the WHOLE company than have do deal with all the amendments and such that the current debt holders would have to do. PLUS... the current debt holders also hold the lion's share of the equity. So, one would think that they would make more money from their stock appreciating from the company cash flowing more, than they would by getting a few more points in interest on their debt the hold.

 

Seems pretty interesting. I think.

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It looks like they are looking to refinance their debt. It will be interesting to see what their bond rates come in at given the demand for junk debt right now.  We will see where it prices out for this upcoming transaction but an opportunity to potential lower interest expense along with improve cash flow. Granted debt will increase with purchase.

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Not sure how much of this business is in runoff or if it will even happen.

 

www.globenewswire.com/news-release/2021/01/06/2154110/0/en/Thryv-Inc-to-expand-international-footprint-with-intent-to-acquire-Australia-s-Sensis-Holdings.html

 

www.sensis.com.au/sensis-data-solutions

 

It is in run off mode. But what is cool here, is that a PE firm owned it, and had it for like... 7 or 8 years. So, they were looking to sell, hence the good price. Not a lot of people lining up to buy... AND THRY can harvest profitability from these sorts of businesses, and grow their SaaS business because of the interesting setup they had at YP. I think that there will be more of these deals coming.

 

I also wouldn't be surprised if they refinanced ALL their debt and got a better rate as part of this deal. Seems to me like it would be easier to underwrite debt for the WHOLE company than have do deal with all the amendments and such that the current debt holders would have to do. PLUS... the current debt holders also hold the lion's share of the equity. So, one would think that they would make more money from their stock appreciating from the company cash flowing more, than they would by getting a few more points in interest on their debt the hold.

 

Seems pretty interesting. I think.

 

Or...debt holders could manipulate the situation to their advantage and acquire the entire enterprise on the cheap through Chapter 11 if the aggressive acquisition strategy fails. It very well could be heads, everyone wins, tails, I win and equity holders loses everything.

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Horsehead Holdings and Garrett Motion should serve as dark reminders that managements are not always as aligned with their “owners” as we’d like them to be. The major holders of their stock and debt can be somewhat conflicted depending on the circumstances that arise.

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They had their debt call yesterday. It seems like there will be appetite for this, and that the debt is going to be structured safely. Plus, the soon to be former debt holders now own the majority of the equity. So, it seems like the incentives will be decent.

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  • 2 weeks later...

I sold out this past Tuesday on the big jump up. Hell of a ride in two months from $11 to current prices. Still looks like value could be here but when you make that much, that quick. Prudent to step back and reassess outlook. Hope others jumped in for the ride.

 

Still positive on outlook and will be monitoring. 

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  • 1 month later...

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