APi Group Corporation (APG): A Bull Case Theory

We came crossed a bullish thesis connected APi Group Corporation connected Speedwell Memos’s Substack by Speedwell Research. In this article, we volition summarize the bulls’ thesis connected APG. APi Group Corporation's stock was trading astatine $39.56 arsenic of November 28th. APG’s trailing and guardant P/E were 109.89 and 24.27 respectively according to Yahoo Finance.

Copyright: Kurhan / 123RF Stock Photo

APi Group’s improvement from a tiny 1926 plumbing store into a planetary information and specialty services level reflects astir a period of expansion, enactment continuity, and strategical reinvention. After decades of diversification into construction-related services and a planetary footprint, the institution entered a caller signifier erstwhile longtime relation Russell Becker became CEO successful 2002 and aboriginal partnered with Martin Franklin’s SPAC, J2, which acquired APi for $2.9 cardinal successful 2019.

Franklin’s way grounds of acquiring and operationally improving businesses—from Jarden to Restaurant Brands International and Nomad Foods—set capitalist expectations that APi could likewise unlock important worth done disciplined M&A and borderline expansion.

At acquisition, APi operated 40+ businesses crossed indispensable services including occurrence protection, HVAC, utilities, and information systems. Although COVID initially pressured revenues, Becker accelerated a strategical displacement toward recurring, higher-margin work work, peculiarly inspections that make predictable follow-on attraction revenue. This modulation improved lawsuit stickiness, reduced reliance connected low-margin declaration bidding, and positioned APi to consolidate a fragmented marketplace wherever smaller operators pursuit ample contracts portion APi efficiently captures smaller, recurring jobs.

The institution complemented this integrated strategy with disciplined acquisitions, typically astatine mid-single-digit EBITDA multiples, culminating successful the transformative 2021 acquisition of Chubb for $3.1 billion. Chubb doubled APi’s scale, expanded its planetary reach, and pushed work gross supra 50%, supporting APi’s semipermanent 13% EBITDA margin, 60% services mix, and 80% currency conversion targets. With implicit $7 cardinal successful 2024 revenue, much than 100 acquisitions completed nether Becker, and a exemplary built connected recurring compliance-driven services, APi appears aboriginal successful its runway to further borderline expansion, consolidation, and semipermanent worth creation.

Previously we covered a bullish thesis connected APi Group Corporation (APG) by Kairos Research successful November 2024, which highlighted the company’s inspection-led recurring exemplary and disciplined safety-focused acquisitions. The company’s banal terms has appreciated astir by 7.03% since our coverage. This is due to the fact that the thesis played retired done dependable borderline expansion. The thesis inactive stands arsenic APG’s work premix remains resilient. Speedwell Research shares a akin presumption but emphasizes APG’s semipermanent evolution.