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Cannae (CNNE) 8 Aug 24 2024 Q2 Earnings call transcript

AInvestFriday, Aug 9, 2024 7:01 pm ET
1min read

Cannae Holdings Inc.'s second quarter earnings call presented a comprehensive overview of its strategic initiatives, portfolio performance, and financial status. The call, led by President Ryan Caswell and CFO Bryan Coy, highlighted the company's strategic focus on driving net asset value (NAV) growth and narrowing the discount between its stock price and NAV.

Performance of Portfolio Companies The call underscored the importance of the company's strategic levers, including the performance and valuation of its portfolio companies. Notable accomplishments included the sale of Alight's Payroll and Professional Services business for $1.2 billion, a transaction that brought down Alight's net leverage to 2.8x. D&B reported a 4.3% year-over-year organic growth in revenue, with a 5.7% increase in adjusted EBITDA. Dun & Bradstreet is currently in discussions with potential buyers, reflecting the company's market appeal.

Investment Strategies and Partnerships Cannae also emphasized its focus on making new investments, primarily in private businesses. The strategic partnership with JANA Partners has opened up potential acquisition opportunities, with Cannae acting as a capital solution provider and potentially acquiring stakes in undervalued public companies. This partnership underscores the company's strategic approach to unlocking value and creating shareholder returns.

Financial Performance and Shareholder Value The call also touched upon Cannae's financial health, with a focus on returning capital to shareholders. The company has paid out a cash dividend of $0.12 per share and bought back 300,000 shares, amounting to a total of $235 million in capital returns. These actions underscore Cannae's commitment to maximizing shareholder value while also investing in its portfolio to drive NAV growth.

Challenges and Opportunities However, the call also acknowledged challenges, such as the impairment of Sightline's investment due to lack of market adoption and development challenges. Despite this setback, Cannae remains optimistic about the future and is working closely with management teams to optimize operations and drive growth.

Looking Ahead Going forward, Cannae is focused on executing its strategic plan, which includes improving portfolio company performance, making new investments, and returning capital to shareholders. With its strategic partnership with JANA Partners, Cannae is well-positioned to identify undervalued opportunities and create shareholder value. The company's financial health, coupled with its strategic focus, positions it well for continued growth and value creation.

In conclusion, Cannae Holdings Inc.'s second quarter earnings call provided a comprehensive overview of its strategic initiatives, financial performance, and portfolio dynamics. The company's focus on NAV growth and shareholder value, coupled with its strategic partnerships and investments, position it well for continued success in the evolving market landscape.

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