CA - Plural Investing - TerraVest: Creating Value By Acquiring And Restructuring Companies

2024-05-12 08:00:00 ET

Summary

• TerraVest is an acquirer and operator of steel-based storage tank and equipment businesses, delivering strong shareholder returns.
• The company follows a strategy of acquiring, restructuring, and operating mom & pop businesses in various industries.
• TerraVest increases profits by focusing on FCF, using scale to procure materials at a lower cost, and sharing resources across businesses.

The following segment was excerpted from this fund letter.

TerraVest ( TRRVF, TVK:CA)

TerraVest is an acquirer and operator of steel-based storage tank and equipment businesses that has delivered shareholder returns of ~30% p.a. for the last decade. The company generates a 25% post-tax incremental return on tangible capital and has an excellent and aligned management team who own 35% of the business. We first bought shares in TerraVest late last year around C$40, the stock trades at C$70 today, and we think management will continue to compound capital at strong returns for many years to come....

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