Quick Updates: DCC (Intertek) & Wise 

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DCC/Intertek

As expected in my post from a month ago, KKR now came back with a better offer after DCC’s board rejected the initial of 58 GBP per share.

This time, KKR offered 65,25 GBP in cash per share, plus a dividend of ~1,47 GBP per share to be received in July.

This is a 12,5% increase (ex dividend) from the initial offer. Less than I expected but it seems the board off DCC is already happy with this:

Having carefully evaluated the Revised Proposal together with its advisers, the Board of DCC considers that the financial terms of the Revised Proposal are at a level which the Board of DCC would be minded to recommend to DCC shareholders should a firm intention to make an offer pursuant to Rule 2.7 of the Irish Takeover Rules be announced by the Consortium on the same financial terms, and subject to the satisfactory agreement of the full terms and conditions of any offer and satisfactory agreement and execution of definitive transaction documentation. 

Just to be clear here as a reader asked why the price did not directly jump to the offer price.: KKR hasn’t made a formal offer yet. This is so to say the “pre-discussion”.

Looking at DCC’s long term share price, the offer price equates roughly the share price DCC had 10 years ago:

Looking at the historical P/E, we can also see that 2026 was the period in time when people thought that DCC is a 24x NTM P/E business:

As DCC’s board seems to have already accepted the bid, the only further upside would be now a counterbid from another PE fund or a strategic buyer.

I am not sure how probable that is, but maybe not 0% either.

Intertek

As I had mentioned Intertek earlier, it’s spread to the (potential) 60 GBP plus dividend offer from EQT has tightened a little, because there was a rumour that Swiss based testing company SGS would be contemplating a competing offer.

Such rumours are actually not rare in these situations. Sometimes they are launched by hedge funds who might not want to wait until the offer is executed but get out close to the offer price long before that. In other cases, the rumour actually becomes true.

Wise Plc – What is the potential impact of the AML issue

A few days ago, Wise Plc shocked its investors, after it was revealed that authorities in Belgium are investigating Wise with regard to Anti Money Laundering regulations in an amount of 500 mn EUR.

The FT interestingly reported about a similar incident in Belgium in 2024, following the Russian invasion in Ukraine.

I think what is important to know is that the subsidiary in Belgium is not a tiny little subsidiary but basically handling all Euro transactions for WISE. I guess this has regulatory reasons.Unfortunately, Wise doesn’t report what percentage of its volumes have one leg in EUR, but it is clearly a very significant currency.

The size of a potential fine

The question that I had and tried to solve with AI is the following: Suppose Wise is “guilty”, what would be the fine they would have to pay and what or the other consequences ?

In reality, without making this to sound harmless, these kind of AML issues are not that rare, so there are precedents.

Here is what Gemini is saying:

  1. the maximum charge from a criminal perspective (if guilty) in Belgium is “only” 1,6 mn EUR
  2. the maximum penalty from an administrative side could be up to 10% of sales or in Wise’s case around 190 mn EUR
  3. In practice, the fines often seem to be a level of 1% of the volume. So overall, Gemini estimates the fine to be in the range 5-10 mn EUR. Which would be not so much.

Indirect costs: More compliance

The more critical part could be cost increases through additionally required Compliance functions. Gemini estimated that total compliance costs (which the estimate at 260 mn GBP at Wise) could increase by 30%, which would be around 80 mn GBP/100 mn EUR per year, which would be quite significant.

I think that is maybe an over-estimation, as so far, this only concerns the European operations. but still, 10-30 mn EUR per year could be realistic.

Additionally, we have now of course US shareholder litigation and potentially some reputational issues.

A further risk is that more compliance also maybe means less customer satisfaction and slower growth.

If we take May 29th as a reference, where the share price was at 9,35 GBP, as of the time of writing, the share price is down ~1,15 GBP or -12%. In monetary terms, Wise lost more than 1 bn GBP in market cap.

Payment in general has a difficult time in 2026

Another aspect is that payments in general are not doing that well in 2026. I have collected a small peer group here where Wise is still one of the better performers:

So where does that leave us with Wise:

For me, it is currently too early to say if and how this could impact Wise in the future. The share price drop clearly prices some pain and AML is always a risk for money transfer businesses, but I am not 100% sure if now is the time to increase the position. So I personally will wait for the next 2 or 3 quarters to see if growth keeps up and maybe add then.

If the share price falls significantly from here, I would rather sell and watch.

Rocket Internet Post Mortem, SpaceX (again) and the strange Google capital increase

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Rocket Internet Post Mortem

Last week I mentioned in the comments on the blog and on Twix that I got some “bad vibes” and decided to liquidate my Rocket Internet position even before the planned SpaceX IPO next week.

There were overall 3 things that kind of spooked me and let me to take the profit (+30%) instead of waiting the one more week. Here are the 3 items:

  1. I mentioned initially, although it was not part of my investment thesis, that there might be a chance of a special dividend. Now it has become clear that there will be no special dividend. However, it also became clear that Rocket Internet intends to limit information flow to shareholders even more in the future which is clearly not positive
  2. SpaceX: Another news item that spooked me was that SpaceX is aggressively pitching via German brokers for German retail investors. German investors had never access to  US IPOs before. Some might find this positive, I find that rather “surprising” and potentially a hint that demand is not high enough for Elon’s appetite.
  3. Another surprising event was the “surprise Capital increase” from Alphabet/Google. Interestingly, this represented the largest capital increase of all time at 85 bn USD but there was only very limited coverage about it in the financial news and mostly about Berkshire’s participation. But more on this later

Overall, I decided that the “easy money” was now made with Rocket internet and I was able to sell at around 25,80 EUR per share, netting a profit of 30% within 5 months, which is clearly one of my better “Special situations” investments.

I am not 100% sure that the share price increase was driven by SpaceX, maybe the rapid increase in the value of the Kalshi stake helped as well. I am not sure if there are a lot of other “plays” to benefit from KalshI’s incredible growth.

One could argue that I left some upside on the table here but the success of this investment is almost 100% depending for some time on someone else paying me more for the shares that I paid for, which is something I don’t feel too comfortable for a special situation investment.

Overall, I was clearly lucky with the timing on this one.

2. More SpaceX thoughts: Hyperliquid Perps and Damodaran

Since I wrote my update on Rocket Internet and SpaceX a few days ago, quite some things happened.

As mentioned above, we now know that Elon loves Germany so much that at the time of writing, German retail investors can now access this IPO via 8 or 10 different retail brokers.

Interestingly, SpaceX kind of already trades in a synthetic for as a “perpetual future” on a crypto exchange called Hyperliquid:

According to some sources, in order to compare apples to apples, one would need to discount the price by 10% to make it comparable to the actual SpaceX shares. That means on this “grey market”, a synthetic SpaceX share only trades at ~153 USD, above the 135 USD “sticker price” but inside the 135-162 USD bookbuilding range.

Although no one knows for sure if this has any relevance, it is at least a reference point and it seems to be traded quite liquid.

Another interesting source is the attempt of a valuation by Prof. Damodaran. What I like about Damodaran is that he at leasts tries to put values on these kind of situations and is very transparent with his assumptions. I know most tech bros laugh about these attempts but I think avery serious investor should read what Damodaran writes because there is always a lot to learn.

In a nutshell, Damodaran values SpaceX at about 100 USD per share. The ain changes to his initial, pre prospectus valuation is that he increased the margins for the Space and Starlink business, but significantly decreased the expected margins for the AI business.

“My biggest shift is in my estimated target margin is for the AI business, where the dynamics that are pushing gross margins down, i.e., increased competition and high costs of delivering AI services, will persist; my estimated operating margin drops from 45% to 25%. “

Damodaran is also smart enough to mention that in the first days after the IPO, valuation clearly doesn’t matter at all. But within the first 12 months or so, even for SpaceX, reality will need to be met somehow.

For me however the main take  away is the significantly reduced margins for the AI business which leads me to the:

Surprising 85 bn USD Capital increase of Alphabet

Being a Corporate Finance/Treasury guy by training, the news that Alphabet is raising 85 bn USD via a capital increase really surprised me.

The “package” itself is quite complex. After announcing initially 80 bn USD in total proceeds, Alphabet ended up with ~85 bn.

According to the FT, this is the largest capital increase in the history of capital markets, the second largest was Petrobras in 2010 at around 70bn.

The financial press focused mainly on the 10 bn stake that Berkshire Hathaway took as part of the package. To be honest, this is a very small amount of money for Berkshire’s current size. It is also hard to really judge how good of an investor Greg Abel actually is.

The interesting thing about this capital increase is that so far, at least in the ~40 years that I follow stock markets, capital increases in size only occurred in the following situations:

  1. Primary share portion in an IPO
  2. Emergency capital raising in a crisis ( e.g. Banks in the GFC)
  3. Major M&A transaction where the acquiring company pays with new shares (Paramount)

In Google’s case, clearly none of the three situations applies. According to TIKR, Alphabet still has net cash despite ~100 bn in bonds outstanding. So in theory they could issue a lot more debt. 

I heard the argument that Equity is “cheaper” than debt as the interest rate on a debt offering would be 5% whereas the “earnings yield” at the current 30x P/E is “only” 3,3%. However this does not reflect the tax shield from interest and especially not the fact that Alphabet’s earnings will most likely increase for the foreseeable future and that very soon that “earnings yield” for the issued shares will be much higher than the current 3,3%.

This is the main “justification” of Alphabet for the capital raise besides a 30 bn additional tax bill:

If you read this carefully, it is clear that they could still fund the 2026 Capex more or less with operating cashflow, but already in 2027, they plan to spend much more than that. 

The really interesting thing is clearly: What are their plans beyond 2027 ? My best guess is that they plan with even larger investments that are not offset by operating cash flow. 

But even so, why not wait until 2027 or so when they have a clearer point of view ? And I think here comes something into play which in my old Corporate Finance days was the golden rule of financing: “Raise when you can, not when you must”.

I think the Alphabet guys might have seen SpaceX’s announcement, they know that OpenAI filed for an IPO and that Anthropic will come to the capital markets as well.

As large as the listed capital markets are, there is only so much appetite for capital increases. Maybe they even fear a significant market correction which would require them to issue a much larger number of shares for the same amount of money.

Funnily enough, there were rumours that even Meta seems to think about raising large amounts of capital to fund their AI Capex programs.

One other factor that might also play a role here is that both, Private Credit and Private Equity which have been offering significant amounts of capital so far fight with redemptions themselves and are potentially overallocated to data centres already. 

To me it is pretty unclear where all this is going. However one thing now is clearer to me: 

The capital required to scale up this technology is larger than even the latest and best funded players like Google expected.

In my opinion, this means that it is very unlikely that we see 5 companies scaling this in parallel on their own (Alphabet, Meta, OpenAi, Anthropic & SpaceX). 1,2 or even 3 of those players might fold at some point in time or would need to collaborate really closely with someone like Microsoft or Apple to stay in the race. Or get help from the Orange guy in some sort.

Scrutinizing Data Centre Infrastructure orderbooks

For ordinary investors this might also mean to better scrutinize order books of companies that are supposed to profit from a further AI build out and trade at high multiples themselves.

At the moment, it is enough if a company releases “AI data centre” contracts to justify sky high multiples. I guess going forward, maybe even sooner than later, one really needs to understand from which counterparts those contracts are. Because not all of them might be actually turn out to be valuable.

In any case, as someone who loves capital markets, this is a great time to be alive and witness what is going on at the moment.

Updates: EVS Broadcast, Jensen Group, Wise & Installux

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EVS Broadcast

Let’s start with the most disappointing update first: EVS Broadcast got slammed down after their Q1 trading statement:

I think three items spooked investors, including myself:

First, after confirming the guidance, both in the CEO and CFO statement, the press release suddenly contains this sentence in the Outlook section:

“In particular, the current situation in the Middle East may affect full-year revenue performance and could lead EVS toward the lower end of the guidance range. At the same time, given the strength of the pipeline and the opportunities currently identified, we believe there remains potential to offset this impact through execution in other areas of the business. “

Second, once again they mention that the 2026 year will be “back loaded”, i.e. investors will have little visibility how things will develop until the end of Q4.

And finally, the departure of the CFO lady without a direct replacement is also not optimal. I guess there has been some tension in the board.

Longer time EVS shareholders know that they always guide cautiously, but 2026 as an “event year” should have been a very good year and now it looks that it will not be materially better than the year before.

Anyway, at the moment I am clearly not increasing my position in EVS, rather the opposite. It was one of my larger positions and I think unless something changes (like maybe a big share buyback program), I will remain rather cautious.

Jensen Group

Luckily enough, my second Belgian stock, Jensen Group, is the exact opposite of EVS. Once again they started with a great quarter into the year and are “firing on all cylinders”.

The numbers look fantastic, the only question is why net income only rose by +10%, but maybe there was a tax effect:

They keep buying back shares ( a new 10% buyback program has been approved), book-to-bill is >1 and despite a new all time high, the stock is still cheap as earnings grow as fast as the stock price goes up. 

There is currently Absolutely nothing to complain with this company besides the fact that investors think that 11xP/E is the right valuation for such an outstanding company.

Wise Plc

Wise Plc finally listed on the Nasdaq and as a consequence, I do now have a Nasdaq listed share in my portfolio. The share price went up before the listing and actually reached its peak on the day of the listing on May 11th, only to drop significantly in the aftermath:

The listing for me was not the ultimate reason to invest, but of course it is interesting to see how much the stock dropped directly after the listing.

One factor might have been that JP Morgan seems to have reduced its price target by more than 10% following the listing.

Although not exactly so, this resembles a little bit wehn Ferguson (Wolsely) moved its primary listing to the US in March 2022. As we can see in the historical chart, the stock outperformed significantly before that move but then underperformed for some time thereafter:

Sunbelt rentals (the former Ashtead) also so a drop in relative performance a few days after its listing in the beginning of MArch 2026, but that is most likely due to the start of the Iran war:

Anyway, from a fundamental side, there hasn’t been any change with regard to Wise’s prospects, so no action there.

Installux

Finally, some of my readers might remember that I owned the French Micro Cap Installux for some time (bought in 2012 during the EUR crisis) but sold in 2021 with a decent return despite the stock being still cheap.

Yesterday, out of nowhere, Installux suddenly published that they bought out the largest minority shareholder, French Value Asset Manager Amiral at a share price of 500 EUR per share vs. 290 EUR which was the last trade before that announcement.

Interestingly, the Canty family now has ~88% of the shares and is extending the offer to all other shareholders. Interestingly the 500 EUR are almost the all time high from 2021:

Installux is an interesting case study insofar as the family clearly had very little incentive to show to the outside how good the business actually is. Their long term mission was clearly to get full control of the company. Amiral really had a lot of patience here.

At the end of the day it shows that if you invest into shares like Installux, timing and patience is really everything. You either have to get in when they are extremely cheap or be lucky to be there when the family finally wants to gain full control.

On the positive side, the Canty family never did anything fishy and the final offer seems kind of fair.

“Space is the place” – SpaceX IPO, OHB SE and a Rocket Internet update

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DISCLAIMER: This is not Investment advice. PLEASE DO YOUR OWN RESEARCH !!!!

A lot has happened since I published my Rocket Internet write-up from the end of January. Just as a refresher: I found Rocket Internet interesting, despite some Governance issues as the “sum of the part” value was significantly higher than the share price back then and that it offered some relevant &  discounted exposure to Elon’s SpaceX IPO.

But before we start, I would recommend to click on the following link and get David Bowie’s Space Oddity as a nice background sound for reading this post:

David Bowie – Space Oddity (Official Video)

As I write, SpaceX has just released its S-1 filing and plans to go public on June 10th. This is what I wrote back then:

My time horizon for this would be either the (Rocket) AGM or the actual SpaceX IPO. On Polymarket, the odds are 60% for an IPO before end of Q3 2026

Compared with two other “SpaceX Proxies” that I mentioned, EchoStar & Alphabet, Rocket actually did quite OK if we look at the chart:

The real Space Superstar: OHB SE

However, the real “Performance Rocket” would have been another German stock called OHB:

OHB, a German/Bremen based Satellite manufacturer went parabolic despite having a really small free float after KKR acquired a significant portion of the minority free float at 44 EUR in 2023. Initially they wanted to delist but then kept the listing.

The main reason for this increase seems to be that OHB is included in a very popular ETF called Tema Space Innovators ETF with the great Ticker NASA.

This ETF is one of the fastest growing ETFs ever and currently has a 5% allocation in OHB. At around 1,4 bn AUM, that’s around 60 mn EUR in OHB. As most of the OHB shares are held by the founding Fuchs family and KKR (together ~94%) and some specialized “Squeeze out” players, there seems to be a pretty hard squeeze on the few remaining shares.

I also guess that you cannot short OHB shares. Operationally, OHB has been doing okayish, but nothing that would justify a 130x P/E.

In any case, this is a monster deal for KKR who (obviously) plan to exit while its “hot”. I am pretty sure that after that exit, OHB will be one of those “Christmas Tree” charts that we know from the Covid times.

Back to SpaceX

Elon seems to target a valuation of 1,75 tn USD, that would be the upper range of what I assumed in my January sum-of-the part valuation. However, “old” SpaceX shareholders from the beginning of the year have been diluted by ~20% after the “merger” of SpaceX with XAi, so we have to take this into account.

I am sure that Matt Levine will write and say much smarter things than I do about the SpaceX IPO, so here are just some observations:

  1. The S1 prospectus contains some really nice pictures of rockets
  2. There are already a lot of write-ups & observations about several aspects of SpaceX. A pretty good thread can be found for instance on Bluesky.
  3. Overall, SpaceX is clearly much more resembling a giant “Elon Venture Fund” than a normal company. I think I read this in one of Matt Levine’s newsletters about Tesla. Elon has assembled a relatively loosely connected group of companies (XA, Twitter, SpaceX, Starlink, maybe Cursor) with which he can more or less credibly jump on any new hype that will come his way.

    Like the VC giants Sequoia or A16Z, he has two talents: To raise funding and to attract (a certain type) of tech people with which he can at least create the appearance of riding the next big thing.

    If Ai hits a brick wall, Elon finds something else like maybe Quantum computing or he will merge Neuralink into SpaceX or become the Number 1 in obesity pills.

    His hardcore fans are not looking for earnings but to ride the next hype
  4. A lot has been already said about the “total Addressable Market” figures from the deck which equal the US GDP.

    The great thing about both, the socalled “Space economy” and also AI is, that both at the moment seem to have indefinite TAMs. Mathematically, even a small slice of something indefinite is worth an indefinite amount of money.

    So that’s clearly much better than something like earth bound EVs where there is a clear ceiling or humanoid robots that just don’t work and where the Chinese are obviously much better.

    I am pretty sure, Cathy Wood or someone similar will come up with an “analysis” that SpaceX is worth 100X from wherever it is trading.
  5. A nice contrarian take can be found at the “Wertegang” Substack with the nice title : SpaceX is a Zero. Here, my friend Dirk argues that the SciFi bestseller “The three body problem” clearly shows that reaching to the stars is pretty risky from a cosmic perspective (Dark Forrest theory). But I am pretty sure that if needed, Elon will also promise to manufacture Pocket Universes in one of his Gigafactories.
  6. What I am really curious about is, if Elon manages to really hype two companies, Tesla and SpaceX at the same time. Also, how will the typical “Elon retail hardcore supporter” react ? If he/she is a real Elon fan, he/she will have all of their money already in Tesla (plus maybe some more). But of course, they want to have SpaceX exposure, too. So will they sell their Tesla shares to get a 50/50 allocation ? I think this will be interesting to observe.

Anyway, the SpaceX IPO is great financial entertainment and might only be topped by an OpenAI IPO in autumn.

Rocket Internet Update

In the meantime, Rocket Internet has “published” its 2025 annual report. Interestingly they did revaulue their participations upwards to a certain extent. After a loss of -550 mn EUR in 2024, they now show a profit of 750 mn EUR. It seems that the letter from Scherzer AG to the auditors did have some effects.

If I would be in the Microcap Stock promotion game, I would maybe post something like: “Hidden Perfromance Rocket trading below NAV at 3x P/E ratio”, but economically the shown profit is pretty meaningless.

On the negative side, there will be no large cash distribution and Rocket seems to intend to make the company even less transparent going forward.

In any case, I updated my valuation sheet, including some “bug fixes”. Again, this is a quick and dirty exercise and definitely not investment advice !!!

Here is the new sheet:

The main changes that I made were some haircuts on Software companies andTraveloka and adjusting Kalshi and SpaceX for the most recent values. For SpaceX I incorporatedthe 20% dilution from XAi and a new range of 1750 to 2000 mn USD as valuation. For Kalshi I used the 22 bn valuation and implying a further dilution of 10% from the YE 2025 number.

This is a quick comparison between my old and the new exercise:

We can see that the Upside NAV is more or less the same at 53 EUR per share vs. 54,5EUR despite the “haircuts” applied to Software, but the downside valuation is singinifcantly higher, mainly because of the expected valuation of SpaceX at theIPO and the recent Kalshi round which was only a rumour in January.

The upside to the NAV is of course lower, as the shares gained ~+30% since the write-up.

As mentioned in the beginning, I will keep the shares until the IPO hoping for some more irrational exuberance around the SpaceX IPO. Unless I’ll change my mind earlier 😉

DCC Plc Update – Starting the “Intertek Dance” ?

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DISCLAIMER: This is not investment advice. PLEASE DO YOUR OWN RESEARCH

Two weeks ago, I posted a short note on my portfolio company DCC which received a bid from KKR and a partner at 58 GBP per share, which I considered as too low.

Yesterday, not too surprisingly, Bloomberg and Reuters published a short note that KKR and its partner are considering a sweetened offer for DCC.

Interestingly, a similar “dance” between target and acquirer ended just a few days earlier bewteen Intertek Plc, the UK testing and certification company, which is supposed to finally accept a sweetened bid from Swedish PE company EQT.

A little bit similar to DCC, EQT tried at first a low ball offer, but had to increase that offer 3 times within a time frame of ~ 4 Weeks.

This is how the bids developed per share

1st April 10th: 51,50
2nd: 54,00
3rd: 58,00
4th May 13th: 60,00 plus 1.07 final dividend accepted

So from the first to the final bid, the bid price increased by almost 20%. Interestingly enough, after rejecting the third bid, EQT threatened to walk away but obviously didn’t.

What I find quite interesting is, how volatile the share price behaved after each rejection, it traded down significantly below the bid price after each round.

Another interesting point to mention is that at the time of writing, the Intertek share price trades more than 10% below the bid price. A certain discount is normal, but this looks quite wide as I do think that the deal is relatively certain to close.

So Intertek might itself be an interesting “Merger Arbitrage” situation.

So what does this mean for DCC ?

Looking at how things worked at Intertek, one should expect some volatility around further bids from KKR and maybe several rounds of rejection and threats to walk away.

I would expect that, as with Intertek, an overall 20% uplift on the initial bid would do the trick which would be an offer of ~70 GBP/share. For anything below that, most shareholders would just point at Intertek. But as in the Intertek case, one should not expect that DCC will then directly trade up to the bid price.

If the DCC price overshoots my 70 GBP target in between, I would maybe sell a part of the position.

Updates: STEF SA & Gerard Perrier SA

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DISCLAIMER: This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!

Summary

In this update post, I look at two of my French stock positions, STEF SA and Gerard Perrier. For STEF, I reduced my position by 1% of the portfolio because of problems with the integration of newly acquired companies. In contrast, I increased my Gerard Perrier position by 1,5% of the Portfolio as business is accelerating and they seem to have made some very good acquisitions in the Defense/Aerospace and Digital space.

STEF SA

Stef is a company that I analyzed and wrote about 2 years ago. In essence, I considered it a cheap but reliable infrastructure-like cold-storage company with a great track record that is consolidating several European markets. For such a “compounder”, the price looked very cheap at around 8xP/E.

However, things turned out a little differently than I thought. While 2024 was a little bit weaker than 2024, 2025 saw a significant decline in EPS to a level of less than 50% of the 2023 earnings.

According to the 2025 investor presentation, this was a combination of one-time effects (Tax France, VAT Italy) and slower than expected integration success in its recent acquisitions.

To my own discredit, I failed to follow up on the 6M sales release from STEF which still looked good. I should have looked at the full half year report instead.

This is how the explain the declin:

Also, net debt increased by 200 mn.

The dividend was cut to 2,70 EUR from 4,15 EUR the year before (and 5,10 EUR in 2023). This is understandable from a company perspective but somewhat unfortunate for investors.

Analyst estimates seem to expect a recovery in 2026 and the following years according to TIKR:

Share price wise, the stock is almost exactly where it was when I wrote up STEF. Interestingly the US peers did much worse:

A quick look into Americold’s 2025 press release shows decliningorganic sales and mention of “speculative developments” in the cold storage industry.

Also Lineage reported declining sales in 2025.

Both US peers are extremely highly leveraged (8x EV/EBITDA) and therefore very vulnerable to negative economic developments. However, also STEF’s net debt to EBITDA ratio increased from 2,5x in 2023 to 3,5x in 2025. Still manageable but if interest rates increase, this will represent another headwind for them.

My conclusion at this stage is that Stef clearly has over-extended itself with its acquisitions in the neighbouring countries and has not been able to integrate them successfully so far.

Management mentions that things should “normalize” in 2026 and Q1 revenue looked ok, but experience shows that the full integration of the newly acquired company can take much more time.

Although I am not ready to throw in the towel yet, I do think that my initial 5% allocation (currently 4,5%)  was too high and reduced the position by 1% of the portfolio to ~3,5%.

The positive aspect of this story is clearly that I bought cheap enough which protected me against a significant loss of invested capital.

Gerard Perrier

On the surface, Gerard Perrier is a little bit similar to Stef insofar as 2025 was a year when earnings went down slightly:

Despite still growing sales, EPS was -8% lower than in 2024. 2024 again was more or less unchanged from 2023.

In Gerard Perrier’s case however, the explanation is not that they didn’t integrate new acquisition but a temporal weakness in their Energy segment which comprises mostly the servicing of the French nuclear fleet.

This is the translation (from Gemini) from G. Perriers report:

“The activity of the Energy division (ARDATEM, TECHNISONIC), which includes services for the nuclear sector, saw its production decrease by 8.2%, falling from €89.8 million to €82.4 million. This slowdown is mainly explained by the transitional effect of the reduction in reactor outages and maintenance activities at power plants this year, as well as by a rationalization policy of nuclear operations in France, although the sector remains on a positive dynamic in the medium term.” 

In addition, even without much growth in the Energy segment so far, G. Perrier had a great start into 2026 with sales up by +10% yoy:

As we can see, especially the “Installation Maintenance” and the Aerospace/Defense segments are doing well.

What I found interesting is that there was almost no reaction to this news in the share price:

What I do like is that their recent acquisitions look very interesting. With N-Cyp they acquired a small specialist company for industrial cyber defense, with OFATEC they get access to the Data Center market and with the acquisition of the three companies AQLE, SOMALEC et SOMALEC SUPPLY they strengthened their defense/aerospace segment, including components for the Ariane Space missile program.

Another data point that I found interesting is that G. Perrier has still around 230 open positions as per their web site:

Most of the jobs are open at Ardatem (137), the Nuclear service company, which seems to imply that they expect a lot more work going forward.
Overall, I do think that Gerard Perrier offers a very attractive return/risk profile especially on the basis of the currently accelerating business numbers, therefore I increased my position from a previous 3,5% weight to 5% of the portfolio. The additional 1,5% were bought at an average price of around 83 EUR per share.

Some links 15/2026

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Ben Evans argues that OpenAI/ChatGPT has not developed a great business model (yet)

A good rule of thumb to avoid AI slob: “Old” blogs/substacks usually don’t use AI to write, new blogs most likely do

Some interesting stats on the K-shaped economy in the US

Interesting research note from Panmure on a potential “AI Downside” scenario

A good reminder from Flyover stocks, that “stock duration” is an important aspect that one should understand

Interesting deep dive into Tomra by Quartr

Geothermal start-up Fermo managed to achieve a 10 bn valuation at IPO but has almost no revenues per S-1

Some links 14/2026

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The Sector Stories Substack with the final post on Flavors & Fragrances including a lot of useful KPIs. 

According to this report from the recent Beijing Auto Show, the rest of the Carmaking World should be really worried

A nice post on why aiming lower in your portfolio CAGR might be a good thing to do.

Novo Nordisk’s new GLP-1 pill is doing exceptionally well

A great deep dive into how Oil refineries actually work

Interesting post from Wolfgang Klement on the Alpha of “unpredictable” stocks

The Heavy Moat Substack thinks that Nintendo is now interesting

Notes & impressions from Omaha 2026

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This year, after a 7 year break, I once again went to the US to attend the Berkshire AGM. Just for clarification: I don’t own Berkshire shares and unfortunately never did because I always thought that they were too expensive.

Attendance:
As mentioned elsewhere, attendance was clearly lower than in the past. The arena was only half full, the overflow rooms almost empty. On the positive side, with less people it was much more relaxed. On the negative side, prices in Omaha during the weekend are still sky high. Hotel rooms have been very expensive and Steaks in the city steakhouses cost around 60-70 USD (plus sides, taxes and obligatory tip). Most restaurants were only half full. It also seems that hotel prices for the weekend were much lower just before the weekend.

Paying 21 USD for a pretty miserable “Lunch box” during the AGM was not big fun either.

I wonder if Omaha hotels and restaurants will still be able to charge those sky high prices next year.

AGM Content:

Greg Abel is clearly not Warren Buffett. He is much more a “normal”, more operative CEO than Buffett. He also  gave more air time to the other Berkshire business CEOs.

What I liked is that they clearly said that BNSF and Geico still have a lot of work to do, in order to become as good as their competitors. Another plus was that the Q&A session was not too long.

On the other side, Greg Abel clearly did not offer any philosophical insights on capital markets. This was different when Warren and Charlie were running the show and attracted the masses.  And I think it is a good thing that he didn’t even try to do it.

Buffett himself appeared twice, once in a video and then in a half time break interview with Betty Quick. This interview was actually a little bit “cringe” especially when he mentioned that Greg Abel, a Canadian would become American soon and how special an American Passport is. As a Canadian Berkshire investor, I would be pretty pissed off by those comments as it kind of implies that being a Canadian is not good enough to run Berkshire. In any case, I found it super hard to actually understand what Buffett was saying during the interview. 

From an “actionable idea” point of view, the only inspiration I took away from the AGM is the  Tokio Marine Insurance investment. This was clearly Ajit’s idea and despite showing his age, this guy knows what he is doing in insurance. It was also interesting that this was mentioned very prominently despite being a rather small position for Berkshire.

Overall it will be interesting to see how this will develop over the next few years. Will Omoha still remain a meeting point for investors from around the world or will there be another kind of Omaha elsewhere ? We’ll find out eventually.

Berkshire Stock

For Berkshire, I do think the biggest risk is that the company will be seen as a “normal” HoldCo or a normal Insurance company. Normal Holdco’s often trade at steep discounts to their “sum-of-the-part” value. Berkshire so far could always count on the “Buffett factor”, but it will be interesting if and for how long this lasts, especially as it is not easy to really understand who owns what (Insurance, Non-insurance) at Berkshire.

Another aspect is that Berkshire in the past was also seen as a good proxy for the overall US economy due to its significant diversification. These days, this is no longer the case as the portfolio lacks exposure mainly to Big Tech/Cloud/KI and Defense which have been the strongest performers over the previous years.

Maybe that will be an advantage going forward but Berkshire is clearly not a good proxy for the overall US economy anymore.

As I mentioned, I was never a shareholder, but at the moment I would be really cautious with the stock. The market seems to think in similar ways:

The most interesting question is clearly, what Greg Abel will do with the cash pile at Berkshire. The AGM provided very little insight into this unfortunately. 

General observations:

As in the past, for me the reason to go there is mostly the network of investors and the pre-AGM events. I was again able to attend a two day meeting of German Speaking investors in Omaha and before that did some company visits in Dallas with a group of German “investor friends”. As in the past, the actual Berkshire AGM was always only the cherry on the top.

I actually contemplated for some time if I should go to the US at all because of all the political noise and scary stories about the immigration. However, in my case, immigration was super easy and even kind of friendly (Dallas airport).

As in the past, in all private encounters, Americans are always super friendly. We were often asked by random people in the Supermarket or elsewhere where we come from and when we said “Germany” everyone was super friendly and mentioned relatives or previous visits. So on a personal level, at least the Americans that I met, were as friendly as they always were.

However, in most business settings it was clear that Americans are obviously avoiding to say anything negative about the current US Administration. We never pressed the topic but it is really interesting that no one seems to be willing to say anything critical at all.

In Dallas, one could see quite a lot of Waymos driving around plus some of the autonomous Ubers.

Price levels in general are clearly higher than in Europe. Restaurants, apart from basic Fast food places, are at least 50% more expensive than even in my very expensive hometown Munich, especially if you include taxes and the more or less obligatory 20% tip. It is also interesting how aggressively tipping is demanded even for basic non-service offerings like in airports or coffee shops. Unfortunately this is now much more common in Germany, too.

Another cost factor is that there is very little in the form of public transportation. You either need a rental car or pay for an Uber. Over can be sometimes quite expensive. In Denver, where I had a forced overnight stop-over, I paid almost 60 USD for a 15 minute ride, with Uber charging almost 50% of the total fee at 11 pm.

A final observation is that flying domestically in the US is also a pretty miserable experience. If you don’t pay extra, you will need to wait longer at Security and will board last. Boarding is always a “high stress” event as many Americans travel with the maximum allowed onboard luggage, so compartments fill up very quickly.

My personal highlight was the visit to a real Rodeo outside of Omaha. I have never been to such an event but it was great fun and even good “value for money”.

Will I go there again ?

Currently I am not sure. Overall, it is quite an expensive trip and the main attraction is to meet people that in theory, I could meet much easier in Europe than in far away Omaha. In addition, I had a pretty exhausting trip back.

From a pure financial perspective, going to Omaha is clearly not “great value”. However, on a personal level it was clearly a net positive. experience.

DCC – Interesting “Special Situation” following KKR potential buyout offer at 58 GBP ?

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Disclaimer: This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!!!

DCC is an investment I made back in December 2022. The investment thesis back then was that it was a successful compounder/serial acquirer that had the opportunity to grow further through its 3 platforms (Energy, Healthcare, Technology).

In the meantime, a lot of unexpected things happened. After issues in the non-Energy segments, DCC is currently transforming itself back into the original Energy distributor and sold already a significant part of its non.Energy businesses. The transformation has progressed well including a share buy back tender but is not finished yet.

Looking at the share price, we can see that not much happened over the last 5 years but that the timing for buying into DCC in Dec 2022 retrospect was quite lucky:

After the recent jump to 58 GBP, I am up 42% in total (in EUR, including dividends) which is not spectacular and rather at the lower end of my expected outcome. However, given the “Pivot” it is still a decent result and mostly attributable to the low entry point and the relevant dividends.

Now fast forward to last week: 

Private Equity behemoth KKR and another energy focused PE called Energy Capital Partners approached DCC and seem to have informally offered to take over DCC at 58 GPB per share which only represents a 15% premium over the average share price for the last few months.

DCC immediately declined the offer as “too low”.

Energy Capital Partners is a pretty large Energy focused US PE/Infrastructure investor that owns a lot of “Energy Transition” businesses. AuM seems to be north of 40 bn USD.

Although KKR did not disclose which fund is bidding, it looks that both KKR and ECP see this as an infrastructure play which makes a lot of sense.

58 GBP per share is clearly a low ball offer and no formal offer has yet been made. Under the applicable Irish laws, KKR has time until June 10th to either submit a formal offer or walk away.

From a shareholder perspective, I assume that maybe a lot of investors have been frustrated that the stock only went sideways for the last 5 years or so and are maybe happy to exit at that level.

The “asset heavy” Infrastructure PE playbook

DCC so far has operated as a relatively capital light distributor, but I think it is relatively easy to pivot them into an Infrastructure like business that usually enjoys significantly lower cost of capital.

In contrast to “normal” Private Equity, Infrastructure Private Equity still enjoys a pretty good time. Many players have raised large funds and are eager to deploy money. Infrastructure is often considered “AI safe” these days.

So I guess there might be a chance that some other players might look very closely at this situation. DCC is a very obvious target and the timing is quite nice from a PE perspective. The refocusising on Energy at DCC is still underway and the results don’t look so “clean” at the moment,

DCCs business model, especially the LPG distribution business has a lot of potential to get easy access to many SME companies and sell them solutions.

Especially the current volatility in fossil energy prices opens up a unique selling opportunity for solutions that offer less exposure like rooftop solar etc. 

According to TIKR, DCC’s Net debt to EBITDA ratio is only around 1,2x. The company is valued at around 7xEV/EBITDA. The typical infrastructure playbook would be to make the company more “asset heavy”. Due to the low gearing, this could be financed by more leverage. A typical “asset owning” infrastructure company with longer term contracts can be easily levered 4-5x Net debt/EBITDA, 

In DCC’s case, with around 900 mn in EBITDA, increasing the leverage ratio to 4x would allow them to issue almost 3 bn in debt which could finance a lot of assets. Those assets then will automatically increase EBITDA,

A stabilized infrastructure like company can then be sold at much higher multiples, usually at 12-15x EV/EBITDA. So the value creation potential for a good Infrastructure PE shop is significant. 

Just for fun I did a high level calculation how that exercise would look from this perspective (I just took the current numbers from TIKR, before further disposals):

A potential IRR of above 20% p.a. is highly attractive for an Infrastructure fund and as I have written before, PE’s have some more levers to “juice up” the IRR and earn even higher performance fees.

Is DCC now an interesting special situation play ?

There is clearly the risk that DCC might reject even higher offers, but I do think the 58 GBP low ball offer provides a decent “floor” for the stock (“Anchoring effect”).

For one, DCC should expect some positive operational tailwinds. Volatile and high energy prices in the past have been good for DCC’s energy business. As we can see every day “at the pump”, distributors like normal Petrol stations immediately increase prices although they often have inventories for some weeks/months and often drop prices much slower.

Looking back to the last energy price shock in 2022, we can see that this was DCC’s best year, especially for the energy business:

Although there is no guarantee that the same will apply to 2026, there is a high likelihood that 2026 will look good for DCC from an operational perspective.

In addition, I do expect that the transformation will be more or less completed in the 2026 calendar year. 

So all in all, 2026 seems to look pretty good for DCC. I think this also explains the timing of KKR and ECP, as they don’t want to wait until this improvement shows in the results of DCC.

Even in case, DCC gets sold relatively quickly at 58 GBP per share, one would still get the Dividend that will be recorded end of may.

Quick handicapping exercise:

Overall, I would see the probabilities as follows until the end of the year::

25% probability of no deal with 55 GBP as the outcome (plus dividend, currently estimated at 2,10 GBP/share)

15% of a deal at 58 GBP (plus dividend)

60% probability of a better deal. My guess here would be 70 GBP plus Dividend

This is the quick and dirty calculation:

So based on my assumptions, my probability weighted expected return is around 16% until year end. This looks attractive to me, as in my opinion, the downside is very limited.

Of course, all the assumptions can be challenged and changed.

Summary:

So in total I see the following situation here:

  • The bid of 58 GBP is clearly too low
  • DCC’s short term operational results are supported by increasing energy prices
  • in addition, the full effect of the transformation “back to energy” will materialize in the following quarter
  • Other Infrastructure funds might also be interested in DCC

So even if the bid from KKR would not be successful, I do think that the share price has much more upside than downside potential at the moment.

From that perspective, I decided not to sell any DCC shares but rather increase my position by ~1,5 % of total portfolio value at around 57,50 GBP per share.

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