JJAQF

APi Group Corporation

Industrial/Transportation, SPAC


Presented:01/16/2020
Price:$10.50
Cap:$1.85B
Current Price:no data
Cap:no data

Presented

Date01/16/2020
Price$10.50
Market Cap$1.85B
Ent Value$0.08B
P/E Ratio169.05x
Book Value$10.02
Div Yield0%
Shares O/S169.90M
Ave Daily Vol503,080
Short IntN/A

Current

Priceno data
Market Capno data
J2 Acquisition Limited does not have significant operations. It intends to undertake an acquisition in the form of a merger, capital stock exchange, asset acquisition, stock purchase, scheme of arrangement, reorganization, or similar business combination of a target company or business. The company was incorporated in 2017 and is based in Road Town, British Virgin Islands.

Publicly traded companies mentioned herein: API Group Corp (JJAQF, JTWO LN), Aramark (ARMK), Cintas Corp (CTAS), EMCOR Group Inc (EME)

Highlights

The presenter is long shares of API Group Corp (JJAQF), a special purpose acquisition company (SPAC) that he expects to de-SPAC in Q1’20. JJAQF’s operating asset, which was acquired in September 2019 for $2.9B, is a Minnesota-based facility management group with a ~$3B revenue book. The business is made up of $3MM – $5MM contracts servicing mostly non-residential and infrastructure clients, ensuring fire extinguishers are up to code, gas meters are working properly, and water levels are correct. When the company de-SPACs, the presenter expects it to be covered by sell-side analysts that cover other “boring” businesses, such as EMCOR Group (which he considers its closest comp), Cintas, and Aramark, all of which trade at 15x+ forward earnings. Shares of JJAQF are currently priced at ~$10.50, or ~9x the presenter’s 2020 EPS estimate of >$1.20. He has a price target of ~$18 per share based on a P/E multiple of 15x his 2020 numbers, an estimate he expects to be corroborated as analysts initiate coverage. 

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