Corner of Berkshire & Fairfax Message Board

General Category => Fairfax Financial => Topic started by: Parsad on November 04, 2020, 04:42:04 PM

Title: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Parsad on November 04, 2020, 04:42:04 PM
I was listening to the 3rd Q conference call, and Prem made an interesting statement regarding monetizing assets within Fairfax, including taking public certain private businesses within Fairfax in 2021.  What businesses do you think he was referring to and what type of valuation do you expect? 

The closest three guesses...both company and valuation...will each win a gift basket prize next year.  The winners will be selected based on net value they expect from the transaction and getting correct which private business...myself and two other moderators will pick the winners.

Selection(s) need to be posted before December 31st, 2020, and the winners will be announced at the end of Q2 2021.

Cheers!
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: bizaro86 on November 04, 2020, 04:53:42 PM
My guess is no Fairfax sub will have gone public by Q2 2021.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Parsad on November 04, 2020, 05:07:16 PM
My guess is no Fairfax sub will have gone public by Q2 2021.

Hey, that's worth a prize too if you are right.   ;D  Cheers!
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: bizaro86 on November 04, 2020, 05:24:19 PM
My guess is no Fairfax sub will have gone public by Q2 2021.

Hey, that's worth a prize too if you are right.   ;D  Cheers!

I'm either going to be exactly right or 100% wrong, which is an excellent position to take for a contest! ;)

I think a late 2021 IPO of Anchorage, the Bangalore Airport holdco is likely, but that's FIH not FFH...
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: wondering on November 05, 2020, 08:19:05 AM
Maybe Farmers Edge
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: StubbleJumper on November 05, 2020, 08:53:34 AM
Maybe Farmers Edge


Given that Farmers Edge has been losing money, so it's a bit of a shit-cake I'd be a bit surprised if it were IPO'd on its own.  But in the Michael Lewis tradition, FFH could put some icing on the shit-cake by merging Farmers Edge and AGT into a single agri-food technology and marketing company, and then doing an IPO.


SJ
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: petec on November 05, 2020, 10:09:05 AM
Tech companies that lose money are a winning combo at the moment!

My guesses would be Farmer’s Edge, Quantum, and what I will call Retail Crapco, a Frankenstein entity with all their retail assets. Total market cap about $1bn. *Wild guess*
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: valueinvesting101 on November 06, 2020, 08:37:51 AM
Anchorage Infrastructure Investments Holdings seems very likely. Valuation around $1.2-1.4 billion.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Xerxes on November 06, 2020, 12:26:02 PM
The comment was made in his prepared remarks and not something blurted out during Q&A session by accident.
Therefore, he is either teasing his audience or there is something in the pipeline, and given the recent divestures probably the latter.

FFH doesn't have any entity on its own balance sheet (except for its insurance subs). (i.e. unlike Onex that has gluskin sheff)

If the intent is to "free up capital" at holding level, than the excerise is largely futile, given that today the money, for the purpose to invest in the hard market, is directionally going from hold-co to the insurance entities that own various bits of the far-flung portfolio. Unless perhaps the capital that is being freed at the portfolio is way more than their needs to investment in the subs + the cost of annual dividend at FFH-level, so that the rest can be dividend back from the subs to the hold-co. while still being able to re-invest in the subs (i.e. changing the direction of net fund flow to hold-co so that it could cover its $300 million dividend)

With that in mind, the target needs either (1) be something that he wants to get rid of at a good price. However, the world is not fair and there is no marketability for rubbish at a good price. Or (2) he needs to monetize something that he does't want to sell but get a good price instead. That should help narrow down the list.

If the monetization is from camp (1) with limited marketability, there would be a BV driven solution as oppose to a hard cash solution in camp (2). 
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: petec on November 06, 2020, 02:26:40 PM
They do have some assets at the holdco. And listed/liquid assets are better for capital purposes than
Private ones, so there’s that also.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Pedro on November 07, 2020, 12:52:51 PM
Lol retail crapco. Think they'll name it that?

In going out to left field - My vote goes to a minority interest in one of the larger insurers who have consistently done well YOY.  Similiar to what they did early in early 2000s with Lombard I believe. I could be off but I believe this was done years ago and then later bought back
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: petec on November 07, 2020, 01:43:26 PM
Lol retail crapco. Think they'll name it that?

In going out to left field - My vote goes to a minority interest in one of the larger insurers who have consistently done well YOY.  Similiar to what they did early in early 2000s with Lombard I believe. I could be off but I believe this was done years ago and then later bought back

It was done with Odyssey but under duress and I can’t think why they’d do it now. The point is to monetise investments.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Xerxes on November 07, 2020, 03:41:54 PM
Petec
What private asset on holding company B/S are you thinking of :

I am seeing cash + some receivables as shown on page 3 of Q3 results showing the consolidated B/S.
everything else rolls up under $39 billion as shown as “portfolio investments”
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Xerxes on November 12, 2020, 02:12:54 PM
In my opinion they will sell Vault Insurance.
Wild guess 
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Parsad on November 12, 2020, 02:43:04 PM
In my opinion they will sell Vault Insurance.
Wild guess

Yeah, your out of the contest!  If your post's timestamp were only 10 minutes earlier, you would have won.   ;D  Cheers!
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Pedro on November 12, 2020, 03:25:22 PM
No indication of the price ? Should we assume it's a small book that was sold?

Wasn't Scott the man Prem mentioned is leading the Fairfax worldwide initiative?  I asumed by the language in that press release that he is leaving FFH altogether.   He may have had a required time to stay after the  acquisition of allied so maybe his time was up but he seemed like someone they wanted to keep to run their global platform.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Cigarbutt on November 12, 2020, 06:17:44 PM
^Vault is quite small but potentially promising.

It's a niche reciprocal insurance entity formed in 1997 that is in a start-up mode. At end of 2018, it had earned premiums of 2.3m and capital surplus of 47.9m, funded by surplus notes (Allied World participating, majority 80% control). It looks like it was aiming to expand in the US.

This is inferred indirectly but Mr. Carmilani perhaps wanted a challenge to build from scratch. Talent leaving can be concerning but there may be valid personal reasons.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: petec on November 12, 2020, 10:58:00 PM
Wasn't Scott the man Prem mentioned is leading the Fairfax worldwide initiative?  I asumed by the language in that press release that he is leaving FFH altogether.   He may have had a required time to stay after the  acquisition of allied so maybe his time was up but he seemed like someone they wanted to keep to run their global platform.

I got the sense he was meant to be a Fairfax lifer and possibly Bernard’s heir apparent, so this is a blow.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: StubbleJumper on November 13, 2020, 05:58:34 AM
Wasn't Scott the man Prem mentioned is leading the Fairfax worldwide initiative?  I asumed by the language in that press release that he is leaving FFH altogether.   He may have had a required time to stay after the  acquisition of allied so maybe his time was up but he seemed like someone they wanted to keep to run their global platform.

I got the sense he was meant to be a Fairfax lifer and possibly Bernard’s heir apparent, so this is a blow.


I would not automatically assume that this is a blow or a loss.  Situations change within companies all of the time.  It is sometimes the case that rising stars lose their shine and become problem employees -- too good to fire outright, but not the right fit to promote.  In those cases, organizations struggle to push them out and move forward. 

This is the second instance in less than a year where senior people who were seemingly leadership material have left through the side-door, with a little assistance from FFH (Paul Rivett and now Scott Carmialani).  My curiosity is piqued about why they have both left through the side door.  What the hell is going on at FFH that the company is facilitating the departure of its executives?  In the end, if there is some irreconcilable conflict between the execs and Prem, then they absolutely need to go and their departure should not be viewed as a loss.  But, we should ask why this is occurring?  Is it just chance (fooled by randomness) or is there something else going on that is unhealthy within the outfit?


SJ
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Xerxes on November 13, 2020, 09:04:10 AM
Not unhealthy from the outside from where i am sitting, but in someways, i see Prem taking a big chunk of the stock in summer, as a validation that Fairfax is him, and he is Fairfax and he is going to right the ship and that it will be his strategy.

I don't see him buying the stock that big (no matter how under valued it was) if other 'rising star(s)' was slowly taking over the going forward corporate strategy.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Xerxes on November 15, 2020, 02:43:27 PM
https://www.insurancebusinessmag.com/ca/news/breaking-news/fairfax-financial-and-allied-world-to-offload-stake-in-vault-238990.aspx

"Following the transaction, Vault co-founder and former Allied World Assurance Company Holdings chairman & CEO Scott Carmilani will continue to serve as chairman of Vault’s board. Vault’s leadership team will continue to operate under the guidance of co-founder and CEO Charles Williamson.

"The market demand for premium personal insurance is growing rapidly," said Carmilani.

Carmilani commented that there are more than 12 million US households in Vault’s target market, up from 6.8 million in 2009. He also said that nearly 80% of those households do not currently utilize the services of a high net worth insurance specialist – this presents Vault with a large market, the co-founder noted.

“With the investment by Cornell Capital and HSCM, we see significant growth potential for Vault in the underserved high net worth insurance market,” Carmilani prefaced.

"I'm extremely confident in Vault's future and the balance-sheet flexibility this transaction provides," said Williamson.

"Our team brings significant experience partnering with and growing leading insurance companies, and we look forward to working closely with Scott, Charles, and the Vault team to execute on our shared vision for continued growth,” stated Cornell Capital founder and senior partner Henry Cornell.

"We were a founding investor in Vault, and our additional investment is a testament to our confidence in the Company's business model," added HSCM founder and managing partner Michael Millette.
"
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: bluedevil on November 17, 2020, 05:07:43 PM
Pethealth.
Bought for 100m; sells for around 240m.



Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Daphne on November 17, 2020, 07:24:11 PM
Not going public but monetizing assets

Canada’s biggest patent holder, BlackBerry Ltd., is looking to unload most of its intellectual property in a deal that could mark another turning point for the fallen former smartphone giant.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: StubbleJumper on November 17, 2020, 08:04:17 PM
Not going public but monetizing assets

Canada’s biggest patent holder, BlackBerry Ltd., is looking to unload most of its intellectual property in a deal that could mark another turning point for the fallen former smartphone giant.


Recuperating some capital from BB would be excellent news, indeed.  The capital has been tied up for what, 7 or 8 years now?

Interestingly, BB shares have been edging up since the vaccine announcement of last week.  The renegotiated debs are not yet in-the-money, but at least there is some prospect that they might head there during 2021.  Starting from today's price, a doubling of the BB share price would take some sting out of the equity investment and it would obtain a nice return on the debs.  A tripling of the share price would get the investment up to the status of mediocre.

It would be nice to have a favourable exit from this one during 2021...


SJ
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: petec on November 17, 2020, 11:00:22 PM
Pethealth.
Bought for 100m; sells for around 240m.

Is this a prediction or have you seen some news?
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Daphne on November 18, 2020, 05:15:32 AM
The Globe and Mail has confirmed a report last week by IP industry journal IAM that BB-T +2.06%increase
 recently began shopping the majority of its 38,000 patents to interested parties. Tech+IP Capital, LLC, a U.S. investment banking firm, is handling the sale for BlackBerry.

A source familiar with the situation told The Globe the company isn’t certain what price it will get, but it’s believed the portfolio could be worth more than US$450-million - a significant size for a deal in the global patent trade, but a fraction of the US$4.5-billion a consortium led by Apple Inc. Apple Inc. paid in 2011 for a trove of 6,000 Nortel Networks patents. The Globe is not identifying the source as they are not authorized to speak publicly on the matter.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Xerxes on November 18, 2020, 06:15:54 AM
If true this could mean that one of Blackberry revenue drivers will take a hit as they have been collecting royalties on some of them.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: bluedevil on November 18, 2020, 07:38:09 AM
Pethealth.
Bought for 100m; sells for around 240m.

Is this a prediction or have you seen some news?

No news -- a total guess.
In response to the call for predictions, I was just thinking about the one company they sold -- Davos -- and how that was a business that benefited from the pandemic, unlike most of their businesses.  I was trying to think of another business that was helped by the pandemic, rather than hurt, and Pethealth is -- sadly! -- the only one I could think of.  I am assuming it is done ok given the surge of interest in pets recently.  Just hard for me to see them selling off many of the other businesses - such as retail - given how they must have been impacted by the virus.


Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Xerxes on November 18, 2020, 08:59:52 AM
Bluedevil

I think that is an excellent guess and reasoning.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: ourkid8 on December 07, 2020, 08:28:26 PM
AGT Foods eyeing return to public markets: CEO

https://www.bnnbloomberg.ca/agt-foods-eyeing-return-to-public-markets-ceo-1.1533015
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Viking on December 08, 2020, 12:52:00 AM
AGT Foods eyeing return to public markets: CEO

https://www.bnnbloomberg.ca/agt-foods-eyeing-return-to-public-markets-ceo-1.1533015

Good interview. Seems like a pretty bright guy. Lots going on with this company. Thanks fo posting the 10 minute interview.
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Xerxes on December 08, 2020, 05:54:15 PM
A good interview with Al-Katib from the pre-Covid days.

https://www.youtube.com/watch?v=C7Eoznz-zVA
Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: wondering on January 16, 2021, 03:28:53 PM
Maybe Farmers Edge

Maybe there is for my vote for Farmers Edge.

https://www.theglobeandmail.com/business/technology/article-six-canadian-tech-companies-eyeing-ipos-amid-investor-craze-for/

"Frothy markets and a recent frenzy for software-focused businesses have convinced more Canadian technology companies to consider going public, setting the stage for a potential surge of initial public offerings that could eclipse last fall’s rush. At least six firms have recently lined up investment bankers to explore IPOs, potentially by the spring, The Globe and Mail has learned.

Farmers Edge Inc., a Winnipeg-based agricultural technology provider controlled by Fairfax Financial Holdings Ltd., is set to file a prospectus with regulators for a deal underwritten by National Bank Financial.....

....Farmers Edge, meanwhile, was an early Canadian agricultural-technology leader, using data science and AI-powered software to help farmers improve yields. It raised private capital in the mid-2010s from Silicon Valley-based Kleiner Perkins Caulfied & Byers and Toronto-based Osmington Inc., which is controlled by David Thomson. (Woodbridge Co. Ltd., the Thomson family holding company, owns The Globe and Mail.)

Fairfax bought Kleiner Perkins’s stake in 2016 and has since gained majority control of the company. Fairfax recently reported a loss of $21.8-million in the nine months ended Sept. 30 for its stake in Farmers Edge."

Title: Re: Contest: Which Fairfax Private Companies Are Going Public?
Post by: Daphne on January 17, 2021, 09:57:46 AM
What about Boatrocker? Media and entertainment sector is on fire and this company has been growing by leaps and bounds.