Spyglass Portfolio -- Megatrends

10 New Position: API Group Corp. (APG) API Business Overview GROUP . API Group (APG) is the leading business service provider of safety and specialty services worldwide Founded in 1926, APG operates the largest fire safety business in the world . APG estimates US Fire Safety Industry expected to reach $18 billion in 2025, while growing at a 9% CAGR Customers buy APG's services because of government regulation and safety concerns Attractive Industry Characteristics → Recession resistant Demand is largely inelastic with pricing Recurring mandatory inspections and contractual obligations with a transparent view of backlog Limited CapEx enables an aggressive M&A strategy → APG has completed over 90 acquisitions since 2005 with an average EBITDA multiple of 4-7x → Inspection sales team enables significant margin expansion post-acquisition Organic growth is driven by increased regulatory standards and pricing power Go-to-market strategy: Sell inspection first which brings $3-4 in service revenue for every $1 of inspection revenue, creating a stickier client relationship with recurring revenue and higher margins 10-year track record of high single digit organic growth led by inspection volume growth and pricing power "Being in businesses that are mandatorily required services, it's a great place to be" - API Group Chairman, Martin Franklin 21

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