Ellis FP is undervalued private equity candy
The bull case argued for French uniform and linen services provider Ellis is that it represents a highly resilient, high-retention business trading at a massive discount compared to its US peers.
The argument
The guest compared Ellis to US peer Cintas, which trades at over 25 times earnings. Ellis trades at a cheap five times EBITDA with 400,000 customers, high contract retention, and is actively consolidating smaller players, making it an attractive target for private equity or a significant market re-rating.
The thesis, stress-tested
✓ What validates it
- ✓Continued automation improvements in quarterly reports
- ✓Accretive small-scale acquisitions in Europe
▸ Risks discussed
- ▸Slower integration of smaller acquisitions
- ▸General European economic drag affecting service contracts
Hear it yourself
"I mean, an example, Syntas, which does uniform cleaning and linen cleaning, and and it's a service business in The US. It's down $8,090,000,000,000 dollar market cap trading at 25 times or more earnings. It's the largest player of its kind in The US."
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