Author Topic: SYTE - Enterprise Diversified  (Read 239945 times)

wachtwoord

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Re: SYTE - Sitestar
« Reply #250 on: November 17, 2016, 04:37:30 AM »
Roll ups of HVAC have been tried a number of times and nobody has cracked the code.  The problem is that they are largely mom and pops who's success is tied to an owner/manager who lives the business.  The customer relationships and employee loyalties are tied largely to that owner.  Once they sell out and move on, those relationships slowly dissipate and die - especially when employees are now reporting to an Area Manager and have to focus on budgeting and targets and other "corporate" metrics.  There are very few synergies with the exception of some systems and purchasing but those tend to take more effort to integrate than they achieve in savings.

Historically the play has been to buy the mom-and-pops at 3x EBITDA with a parent that trades at 5x EBITDA and get the value pop there.  But over time that EBITDA shrinks instead of growing and the whole thing dies slowly.

Based on my (fairly limited) experience dealing with commercial HVAC companies, I agree with this 100%. The best managed companies are run by owner-operators who have worked in the business for decades and have long term customers built on personal relationships and customer trust in the owner's personal expertise and operational skill. The moat is the owner and without him/her the business would likely wither and die. Although I could very well be wrong, I see a rollup here as an uphill battle.

So theoretically organizing it as BRK is organized stands a chance of succeeding (set of wholly owned businesses, with their original owner operators in-place, with mandate and with equity in the holding company). Excluding insurance of course.

Why would an owner work for somebody else after they sell out? I imagine they would no sell in the first place, unless there is an issue with the business or a special personal situation.

Because they hold equity in the holding? This will lower their variance (but of course also lower their reward from their own work). This is why owner operators stay on when BRK acquires them I imagine.
"Beware of he who would deny you access to information, for in his heart he dreams himself your master"


rkbabang

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Re: SYTE - Sitestar
« Reply #251 on: January 06, 2017, 05:32:03 AM »
FYI, I just noticed they have a corporate website.  I'm not sure how long this has existed, so maybe it is old news to some of you.

http://sitestarcorp.com/


fareastwarriors

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Re: SYTE - Sitestar
« Reply #252 on: January 06, 2017, 08:51:43 AM »
I didn't realize Packer was on the Board...

gfp

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Re: SYTE - Sitestar
« Reply #253 on: January 30, 2017, 06:49:56 AM »

ScottHall

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Re: SYTE - Sitestar
« Reply #254 on: January 30, 2017, 11:27:22 AM »
Real Estate Investment announced -
https://www.sec.gov/Archives/edgar/data/1096934/000072174817000049/0000721748-17-000049-index.htm

I've personally worked with three of the people at Huckleberry. We share some of the same social networks, so I'm pretty sure I know exactly which real estate project this is, and if so, IMO it's a pretty attractive opportunity.

InelegantInvestor

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Re: SYTE - Sitestar
« Reply #255 on: January 30, 2017, 11:36:43 AM »

I've personally worked with three of the people at Huckleberry. We share some of the same social networks, so I'm pretty sure I know exactly which real estate project this is, and if so, IMO it's a pretty attractive opportunity.
The contract specifically states 4  specific projects in the "Oak Street Properties" in Lakewood NJ with Platinum Developers as the developer:
https://www.sec.gov/Archives/edgar/data/1096934/000072174817000049/site_13.jpg

Were these the projects you were referring to? Lakewood is home to a fast growing Orthodox Jewish community of which the developer is a member. There is a huge amount of development of units for young couples and young families. I would guess that these properties are targeting that market.

ScottHall

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Re: SYTE - Sitestar
« Reply #256 on: January 30, 2017, 11:46:57 AM »

I've personally worked with three of the people at Huckleberry. We share some of the same social networks, so I'm pretty sure I know exactly which real estate project this is, and if so, IMO it's a pretty attractive opportunity.
The contract specifically states 4  specific projects in the "Oak Street Properties" in Lakewood NJ with Platinum Developers as the developer:
https://www.sec.gov/Archives/edgar/data/1096934/000072174817000049/site_13.jpg

Were these the projects you were referring to? Lakewood is home to a fast growing Orthodox Jewish community of which the developer is a member. There is a huge amount of development of units for young couples and young families. I would guess that these properties are targeting that market.

I don't feel comfortable saying more, except that the reason I found it interesting had nothing to do with location necessarily.

InelegantInvestor

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Re: SYTE - Sitestar
« Reply #257 on: January 30, 2017, 12:07:18 PM »

I don't feel comfortable saying more, except that the reason I found it interesting had nothing to do with location necessarily.

Cryptic.

ScottHall

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Re: SYTE - Sitestar
« Reply #258 on: January 30, 2017, 12:46:02 PM »

I don't feel comfortable saying more, except that the reason I found it interesting had nothing to do with location necessarily.

Cryptic.

Sorry, don't want to dish on other people's deals with potentially outdated info. Just thought people would benefit from some knowledge from someone who has met & briefly worked with Sean Sun, etc.

Sean Sun is a really bright guy. He's a good growth investor but also has a great value skill set. He doesn't (or didn't) shy away from esoteric things; he found the Walker's Manual quite fascinating, for instance. There are smart people on both sides of this deal and if I had to guess, it'll work out very well for all involved.

InelegantInvestor

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Re: SYTE - Sitestar
« Reply #259 on: January 30, 2017, 12:53:51 PM »

I don't feel comfortable saying more, except that the reason I found it interesting had nothing to do with location necessarily.

Cryptic.

Sorry, don't want to dish on other people's deals with potentially outdated info. Just thought people would benefit from some knowledge from someone who has met & briefly worked with Sean Sun, etc.

Sean Sun is a really bright guy. He's a good growth investor but also has a great value skill set. He doesn't (or didn't) shy away from esoteric things; he found the Walker's Manual quite fascinating, for instance. There are smart people on both sides of this deal and if I had to guess, it'll work out very well for all involved.
Understood.