YB new stock pitches (Fri, Aug 29)

BlackLine (BL), a $3 billion enterprise software company providing cloud-based financial close and accounting solutions with ~$700 million annual revenue, has appointed David Henshall as Lead Independent Director, who has an exceptional track record of guiding companies through billion-dollar exits including Citrix ($16.5B), HashiCorp ($6.4B), New Relic ($6.5B), Everbridge ($1.8B), LogMeIn ($4.3B), Aspen Technology ($2.7B), and Rational Software ($2.1B). The company recently announced that founder Therese Tucker (7.2% owner) will step back from her Co-CEO role effective October 1, 2025, while remaining on the board, leaving Owen Ryan as sole CEO and Chairman. BlackLine delivered 7% revenue growth this quarter with a 22% non-GAAP operating margin, raised full-year guidance, and is actively repurchasing stock ($89 million YTD), with their $1 million customer count rising 24% year-over-year to 84 customers, while maintaining a balance sheet of $857 million cash and $894 million debt. Trading at approximately $48, the stock is viewed as a likely private equity acquisition target by firms such as Thoma Bravo, Francisco Partners, Evergreen Coast Capital, Clearlake, or TPG, given Henshall's role as an 'exit specialist' and the company's apparent preparation for a potential sale.

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Enwell Energy (ENW.L), a Ukrainian gas producer, is trading at a £64 million market cap while holding $99.4 million in liquid assets with no debt, creating a situation where the stock trades below cash value. The company's gas production operations in Ukraine have been completely suspended since late 2024 due to regulatory sanctions imposed by Ukrainian authorities against individuals deemed 'ultimate beneficial owners' of Enwell's subsidiaries, despite the company restructuring its ownership to comply with local requirements. Enwell has filed an ICSID arbitration case against Ukraine seeking damages for over $450 million in invested capital plus $360 million in planned development costs, with potential total claims reaching $750 million to $1 billion when including future production damages. Energy arbitration cases historically favor investors 72% of the time with average awards exceeding $600 million, though the process typically takes 2-3 years minimum. The investment offers multiple catalysts including downside protection from the cash position, potential operational recovery if Ukrainian operations resume (historically generating ~$40 million annual EBITDA), and massive arbitration upside potential. Key risks include Ukraine's war-torn status, hostile regulatory environment, zero current production, ongoing cash burn for operations and legal proceedings, and the lengthy arbitration timeline, though the company's $100 million cash position provides significant runway to pursue legal remedies.

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Acuren Corporation (TIC), the #2 North American non-destructive testing and rope-access inspection provider, trades at ~10x EBITDA despite 17% EBITDA margins, 5% FCF yield, and 43% recurring revenue from essential safety and compliance services across oil & gas, chemicals, power generation, and aerospace sectors. The company is merging with NV5 Global in 2H25 for $1.7 billion, creating a $2+ billion revenue TIC leader with an estimated $350 million pro forma EBITDA including $20 million in cost synergies, though the deal will increase leverage to 4.6x from 3.3x through $850 million in new debt. Key catalysts include the NV5 merger closing, rapid deleveraging from $150+ million pro forma FCF, ongoing mix shift toward higher-margin services (110 bps margin improvement in 2024 from exiting low-margin contracts), and potential re-rating as the larger combined entity gains analyst coverage and institutional interest. The stock trades at a discount to TIC peers like SGS and Bureau Veritas (12-15x EBITDA) despite similar recurring revenue characteristics, with management targeting $16 per share (12x multiple) as integration proceeds and leverage normalizes. Primary risks include 50% oil & gas exposure creating cyclical vulnerability, integration challenges with NV5, elevated post-merger leverage in a rising rate environment, and potential client concentration issues, with downside scenarios ranging from $9-10 if execution is merely adequate to $4.25 in a severe recession with failed synergies.

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