Spyglass Portfolio -- Megatrends

0 New Position: API Group Corp. (APG) API APi Group Meets Spyglass's Seven Core Investment Criteria • ⚫ Leadership position in secular growth industry · · • • GROUP Extremely Resilient: Customers buy APG services because of government regulation and safety concerns → US Fire Safety Industry worth more than $17 billion and growing due to increased regulatory standards → Global, market-leading business services provider of life safety, security and specialty services with a substantial recurring revenue base Results-oriented, entrepreneurial management team with long-term focus and proven track record → Russ Becker joined APG in 1995 and became CEO in 2004, he has successfully navigated the business through multiple market cycles and 90 M&A acquisitions → Chairman Martin Franklin has a proven track record of exceptional returns as CEO and Chairman of Jarden → 15-year 32% IRR, over 5,000% TSR at previous company → Invested $200 million of his own wealth into API Group as permanent capital Sustainable competitive advantage Scaled player in Fragmented industry: API Group is significantly larger than its closest competitor → Inspection sales force enables continued share gains Above-average long-term revenue growth → 7% organic revenue growth since 2011 Above-average long-term earnings growth → Visibility to consistently increasing margins with inspection-led sales team ⚫ Financially sound • → Ability to redeploy billions in capital via M&A and buybacks over the next 3-5 years Attractive valuation Visibility to over 20% FCF yield over our investment timeframe → Initial purchase price of less than 10x forward EBITDA vs. peers trading 15-20x EBITDA → Spyglass Base Case model suggests the potential for a 30% or greater annual return over the next five years 24

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