CNNE - Earnings call transcript Q4 2020

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Operator

Good afternoon ladies and gentlemen and welcome to the Cannae Holdings Inc. Fourth Quarter and Full Year 2020 Earnings Conference Call.

During today’s presentation, all parties will be in listen-only mode.

Following the company's brief prepared remark, the conference will be open for questions with instructions to follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. turn Cannae over Holding. to Investor Shannon now for Relations wound the to conference Devine, I Please ahead. go

Shannon Devine

Thank you, year operator your call. participation and good morning our quarter everyone. fourth and full XXXX conference in earnings We appreciate

me Rick President, Bryan Officer, Coy. Joining Chief Financial and Massey; are Bill David Cannae’s Foley; today Executive Chief Ducommun; Officer, Chairman,

As a this of XX:XX replay a through March Time Eastern on call P.M. reminder, Xst, will XXXX. be available

that may involve to like number remind that contain would forward-looking uncertainties. I call statements statements about and not begin, we risks intentions, our Before are expectations, future the statements. historical a are regarding including this of you that hopes, conference Statements strategies forward-looking or facts,

available based as statements whether made We Forward-looking such actual result as undertake with no not as or statements our are from statements, based beliefs The which released new to the management’s of events, regarding differ statement a on not any fact, of factors, projected. this on other are and Form and risk to, future and forward-looking results detailed include, but results otherwise. are subject sections letter, and management. may of SEC. Cannae’s forward-looking future risks are limited which operating and as and to risks factors in materially update financial expectations the statements other statements quarterly and Because the information, filings shareholder are in uncertainties to morning information well currently to assumptions by obligation and those other was forward-looking information, XX-K

Bill. over Let me to now turn call the

Bill Foley

answer results the and would to quarter shareholder of Earlier and form to management Shannon. your today myself our letter. you, we question. Today, full year senior make available fourth XXXX in team Thank I our like the released

Our XXXX. to and and QX market efforts saw visible of early continued our -- the became companies quarter growth investment finally new in QX portfolio

to examples by businesses II dollar offer with through Holdings led and Acquisition and serve definitive target Foley trillion that Limited tremendous Corp. announce companies of mergers with Specifically, initiatives. Foley for are Paysafe Trasimene of Trasimene scale transformation which Corp. continued potential Both technology future growth Cannae I Solutions. industries, multi Acquisition Group Alight

We expect to market the and Corp. I intent in continue, the invest of recently Corp. Acquisition and of respectively each. as investments member Acquisition in $XX pace of and the SPAC in II group an anchor our most million participate $XXX million to Austerlitz Austerlitz sponsor evident

are focused Our high with companies models. on efforts profitable quality business defensible

our in like operator the sourcing now value-based the returns our approach, demonstrating confident cycle. market believe call over delivers Q&A. the turn ultimately to which to shareholders line approach discipline, transactions, to for to would we are I long-term We our over up to open superior

Operator

Instructions] from session. the begin now first Campbell go Stephens Inc. Please question John [Operator question-and-answer comes will We of the And ahead.

John Campbell

Hey, that's on off-late. you widen pecking to wanted that you to think your you might discounts; just I'm not it. off-late. insert you get actually see to kind order, John. guys guys. got I had, directly yes the kind the good CNNE scaling probably easier on kudos been I big you Hannibal, of It's at have close shareholder nice And Hannibal discounts thoughts to of risen will kind That's yourself into Alps But surprising NAV. had to think buyback, to little able that's be the he time speaking us closing of a guess, lost that's -- than if I of Hey, ways the if But guys an to touch. the the stock on sure latest investing up the of because if letter. afternoon. front whoever Afternoon, artwork a

Bill Foley

back had comment other deferred actually a some in some to the we've and Yes, we buy did question the that than we that's dip at been capital $XXs, point support in of to got made. time. when good the -- market We investments and stock the trying And stock making. the down two buybacks shares we just to we've John, good accumulate the been had you

other However, now the we're fairly public Bradstreet at the going Ceridian & that next having and to and are with both lockups our in company monetization we're Dun Alight to no that Paysafe the investment. and expired, lockups have six have shares, And investment, we have we stocks, occurring point be soon the on events some going months.

it continue I to our investments do thoughtfully repurchases. want of I make so or months am open not just so. actually over share to the that we're these found last some we've to that to going inhibit six So, very to ability great

John Campbell

that's great have And that, exciting. to color. kind It's lot related stack Okay, you of of guys a super activity.

guess just II, still for maybe I you You that Trasimene right were then logic the it remaining the both Trebia the there. what you closed that Foley got did appetite, obviously you got cash if got here, of And quarter, you you and Austerlitz of with was the monetization get pipe doing you've at, I'm wanted your the for the but I'm appetite kind guessing participate your in on core SPACs? hinting way; pending. I guys pipes, to But my math

help you're come maybe forward purchase million with how I can from next where of kind kind capacity. looks can out AUDXXX out it and us you of additional that, all of deck the maybe bridge with so the got the funds you agreement world shake over SPACs, seeing months? if But the couple three you've get think Austerlitz like about first or I

Bill Foley

there's really And although really growth that do upside like with growth products Bradstreet that be were of acquisition, to by anxious regions dispose Dun by services shares, in this showing XX has -- Bradstreet the over and feel at point. Bisnode Dun Bisnode a & of we any growth, particularly the real -- into not Bradstreet occurring, Well, lot going only over also to revenue begin I terms we of organic operates we will the products stock. I'm & the next additional company of that that do there's of the started the to believe can is revenue & sales What next in. in we believe not Dun Dun sale in months. but

So, we're -- I'm be resort that'd my anxious not of be last to Bradstreet dispose of shares. Dun sort to -- & would some

with that the shares stock million sold to And and was the months be that Ceridian shares again, Ceridian; to just we're of shares. be not and three sales management We $XX any of engaged longer of company the involved and continue not at want we have about XX timely company later guys or obviously, $XXX.

are of primary So, of really in. kind sources coming we have those the capital

Colt investments debt like is going smaller four to to so. been the that and But be going minor company that months disposed We looks have we a monetization within and be own for of many, in it many we couple event will next war six have they've couple next Colt a be are of monetized. in own years; the sometime of -- other one in months, investments or a five or

figured our got organized. So, well and well pretty out cash we've pretty flow

was at only transaction our Cannae participating it from In important the terms the we the the investment not by thought in And transactions to we is partnerships pipe pipe. short-term participation, of own National advantages support very portfolio, in have with and of primarily large one these partnership always rate money is ability, funds ROI its investment in market short-term on we but to have -- it's also which frankly, is increase the Fidelity invested bonds. very Financial, its trying its which, that and

companies provide I capital as demonstrate One thing So, to we our have various I -- can operations see like end large company. we're acquisitions and for that they spent is a complicated, they're we really that expect be lot I say wouldn't looking these investor, of that of to improving wouldn't an business the the again, could the pipes support would of taking time, idea up they pipes for concluding.

billion Alight was at to then raised So, pipe but $X.X just grind end get real much pipe easier, still was on a day. of $X the the the was billion on that Paysafe of and the pipe

So, And Trebia we a the acquisition. to would Trasimene SPAC to large $XXX negotiating in along even is it acquisition fashion. $XXX a trying or our million And fairly a that expect again, sometime at we're small modest so. our would Austerlitz I, pipe; pipes won't pipe, be smaller with in pipe. have a will And or announced And that on be the in with -- next really -- billion XX transaction. or goal pipe more be look pipe. $X.X far concluding be days million be that perhaps the In II, next there a to and

cover size. of investing pipe the investments So, want to everything, we have out our in missed want by stuff. I to I make John smaller bunch a pipe stressed get or we don't and Did

John Campbell

what very was helpful. was for. that No, exactly That’s looking I

Rick Massey

John. Hey,

John Campbell

go Rick. Yes, ahead

Rick Massey

I largest the to $X to equity ever. sorry, was modest. he going was pipe just just That pipe I say Paysafe billion going Bill's off was pulled in -- that

it So, slog for a -- dozens he was how I know don't -- it and many right, was calls. was of him. dozens

on done amazing. Zoom. So, it's And pretty all

John Campbell

not kind in sure. queue. quite Yes, order, guys, your other like going longer it there's yet, will, in the to is maybe on you Though I for you it works got back there the sounds it. like you've if of things mean in doubt and I'm quenched it game one you've SPAC, the appetite, No feels I changed hop seems about it's five I'm -- short got some like the done that Last term? SPAC

Bill Foley

you've terms once a at down put know, down have to acquisition, a signed till got John, kind Well, vehicle companies acquire in sheet the to a you you particular wait looking line another microphone of or Zoom business. as you've on you've and of the been term

January, looked and invest And So, to different really it's management, have in and want what it's we marketplace. our But confidence Bradstreet group Knight my in that Black many particular companies. that managers Paysafe, we're of industries their model always many really of December, Alight. different has own or utilities, Dun or management in in is well management many because we -- it's period but companies companies and in to now investigated the invest on engaged we has different in & or in talked whether pretty is teams invest November, their team, during now been from at uniqueness are focused

we that demonstrated at management So, that about can to with to have companies did makeover need have and worry the we & we Dun we management rely Bradstreet. buy -- that to upon don't have teams doing

in And looking fashion some want have management. to want industry moat, focused that -- with companies management So, not that terms another. we're that to has for. and we've a through -- of investor, generate synergies. a with and with we're working changed in we utilities existing the are value we're focus fortress our existing We -- transformation, can in companies on their a have confidence we've or push much also it -- But more we got we more do now their

John Campbell

guys. Makes sense. Thanks

Operator

Please next Oppenheimer. of comes from go Zaffino ahead. question The Ian

Ian Zaffino

very the proposition value about of more bit I secret color to What's their a are what Optimal getting? Hi, great. Maybe there? know give what's Thank any Can you increases. actually far And pricing? think you're a pricing lost push to you all. you type much. I don't able Optimal as Blue Blue's sauce sort bit customers talked us there? little just as you Bill you pricing little customers of at through

Bill Foley

pricing. increasing are they Well,

think I THL forma better did on had Optimal expanding a actually going ownership. by we Blue it Optimal a larger than specifics pro with to basically, is before in little was and Blue addressed percentage. can. first with Duke actually a I and Black and We overachieved the EBITDA XX% quarter revenue of be of invested the And Knight, much full a it drawer

that's Blue, the are LME start operators penetrated Black Knight So, more not they and I've Black goal this medium origination in to Knight loan an penetrated, necessarily small terms what the sized Optimal with the mortgage of we space called really where been with products, is believe playground. but penetrating business that it, of

and very Black penetrate the really the a providers to So, large do we access is -- with Knight, mortgage I'd business Optimal point -- -- smaller the for mortgage normally Black the system. lower as we've say space Knight just our empower that opposed Blue the through that to

successful is that being sold empower now though, Blue positive, and And other is the been The very into base. received. Optimal well it's

a products unique -- portions and Black it's that product of products the Optimal Blue not Knight but did So access set had products. the have not of PPE to,

that's to a a that's investment would Black with working believe in market have we four out Knight, you can years, years performing. deployed know, Xx is, Blue really as five call be that basis really called a as to arrangement of be as Blue. -- the Blue Optimal or -- put I value out fair Optimal do is to a So, our six three And a investment terrific as put invested of be I and years, three can the and know, are Knight of the same investment, Optimal -- investment and move Black owner actually the and we sole to would the course,

into are exit So company. its Knight, at we making Blue. Knight. Optimal It it little does well Blue. of about we're have more feel Blue all to mixed financials but set the It the Duke, great strategy. It's a And revenue run -- have that know specifics has an by you and about Optimal get that appropriate a like we all sure this of Black the own stays that doesn't EBITDA Optimal been Black specific

David Ducommun

would to I say, it most Yes. integrations. -- has of its to mousetrap or Its the slick, new easy better the it's value the and their use, customers, technology. number proposition

your of kind your into trader the different all locks, mortgage or rate integrates originator products that it So insurance, would an use.

use Blue your prices more to people. can to And immediately. calculators it's You get linked Optimal

doing better integrated customer And market a customers mortgages systems, really different opportune all middle the to snowball their time an So, produce Blue base in of And them. for the marketplace, especially profit on reliant it's is well, product only those to -- higher once to market. advantages the is piece really the share pie now a mortgages. kind their prices. of given get Optimal lower you're LOS the are right for leader, trade into how the which or It's small that's

that hope your answered So I that question.

Ian Zaffino

Does Bill, want it? the investments to we I see really that, more to of deploy the if were And that lack behind your Does as for second mean Yes. your Does whole or capital? with public made And mean existing that? appetite? That helpful. the question that was about SPAC not you to be process know, equities will do -- do you appetite to deal opportunities then, guess you know, that pie. out that very talked you pipe that last there, I in for all look don't given you is you Austerlitz or

Bill Foley

going they're private -- to in investments Well, private companies. be

it a those a are we a really For example, the was the was Optimal -- of the to I was Trasimene, Blue company, leverage examples in XX%, we and AmeriLife was able the be of to at well, it XX%, like businesses. pipe, terms were like investment. express SPAC both larger with and that. in where owner, we And pipe that -- it -- buy It a really billion were a to pressing didn't way Maybe the having the Trasimene push of envelope very we felt investment those concept, II or marketplace. -- initial I then raise having a $X $X bit little And, billion complicated. myself

offering. pipes I'd that -- the the investment the by Austerlitz stock less so on rather or buy And the initial form two, public made more one this people equal see in this to of buy or initial

a Austerlitz initial investors pipes set way allows larger of of or invested two. a is some it's to that like a the amount it I company So capital. to return to fixed public one the a reward And -- in company a buy way your you bigger with

The by investor. SPAC they dilution So a being suffer it drops. face really

than allows IPO like makes have about an in in us invest to pipe really what original kind first that sponsors of public. they're process, in drawn what way talk of -- to more them great invested smaller size they pushing is process, idea terms they go is don't come the think XX% I pipe in pipes to much thinking from an of about our That's to just and the And envelope. we assets of that from about Trebia. us key dilution they pipe it's the amount the to another we proposal, the the pipes out mean, they the equal Trebia an it being original want have to IPO, they IPO to twice we then reduce like to the SPAC definitely dropped to we competitive original that the long taking I traditional have transaction really found with the But to XX%. -- original alternative investors. in a two and basically financial As to the dilution And that the experience the the of that is and did. We on IPO

Ian Zaffino

and well could Got performed with the as that In as -- you. really the right. final guess, this missing, not you -- And has shouldn't is maybe there All gap information stock business? from helpful. has anything fix think in did, Got point sort had perspective, fact question. the you. of, of market like, you as ask I street at out Alight you That's something I look if maybe, is just actual a your the just kind opinion, price that you you one Paysafe should

Bill Foley

and Stephan customer XXX with takes working for happening very, The the from provider provider. management a of speak. Alight as to So, customers, year transformation thing moved services his of implement. a Alight half that it's that successful. is and very to conversion just -- been is undergoing I process on company, do, large being the And mean, and XX a is needs we that And is team really of Fortune terrific a itself does really Fortune And to the -- business XXX. being a

that be situation now So weeks. us year has about the got as a halved, to process And halved, down initially were was it implementation we and eight saw then we're to to taking six same customer. Ceridian at a again, implement to

that come have revenue that don't is to all because in on, you deferred you're you waiting process. So, implementation recognize, that the can't

in think we Other different one ways. the Alight team on. -- it's I area see been some that ready have XX really once with implementation And have we're filing, is -- transactions that's do many, been already that you'll comment interesting top once get to working already has gotten rich Alight through developed. period. So which at M&A conclude our environment for that, targets our with that has Alight our actually and get And we that's many that than period, de-SPAC. working shorten our then looking FX Alight we're And we target through management and filed

that things a public and ratio, have much lower -- confident with and once to interesting debt in see about company. that Alight capital happens, So, security you'll we the some very we're that to debt

Ian Zaffino

Very much. helpful. you Thank very

Operator

a [Operator Instructions] And the Campbell ahead. Please of go next question from follow-up John Stephens. is

John Campbell

looking anything windows then on should just and thinking mainly the about? us Trebia hit BFT give the milestone what maybe major else of like could thanks. XX then guys, with it you've these. broad de-SPAC day a a you One be just should kind be Bill, SPAC, just of sweeping But WPF more sounds of we on on the couple update dates on and Hey, of maybe kind Austerlitz, at. And and, kind timing, we of

Bill Foley

Yes.

kind file sometime vote, the we've BFT, process which to who we then In sometimes be hit one, shareholder March. with to now effective And we've is gone hard we're BFT, gets completed, FX and to and the shareholder shareholders that on up SEC, through, of process. you things, again, to days have if we'll date, the those to -- in then BFT vote XX the the same knows, should two the and WPF de-SPAC. after working date probably marketing as be on transaction comment that the should go the then the before again. whole audits the particular on first respond Alight conclude of target or through get one as two the getting is our of we're our proxy file target Trebia for we we're be just get SPAC,. comments proxy, be transaction period through SEC, traded go it's and Austerlitz do to a hopeful XX The announced So round -- that we be our transaction, days hung got and the Paysafe through is our thing or then companies -- is going just sometime traded, audits so. Trebia but going -- Alight XXst on whole early next you now the through third on to SEC, they're Alight. the because de-SPAC haven't we're of finished because the And our about our various get June, starting our the XX milestones, and we and -- our the then it's we

lot a We excited not to to wait are until We already would have we've we just can't been to and that I of -- you're to have we're very target potential conclude companies because had allowed very available buying; you we've SPAC you've be three IPO. our different lot -- to And can't finished. a of we industries. really as the kind obviously, utility talking SPACs your of that had speak different excited we potential because the until to in companies mentioned, anything about when process, us. talk available, we But a got IPOs are

John Campbell

history. of obviously of you setting The awesome. longest but you the taco the tradition till but up sun you got Okay. friend was the carry the Makes day, Knights, to did you on got, asking about know, that game stay wasn't was the in one, midnight then I your sense. And conclusion that NHL last I've Bill, to catch know, the pretty

Bill Foley

afternoon, the -- last really, two game were wasn't period and from on o'clock kayaks boats of the actually lot because -- with we sorry, had was And third -- VGK was friend's little really setting the periods. and it it and cold. unbelievable and couldn't proceed it fans It in watch a at the watched that I'm with house I really lake. flags. didn't from But at and setting the a was waving the cold. second go back though, X a I

So it really But a experience. fun. It liked They of boys I these, And And was thought was way like we it in setting, out this. the it. didn't the game the really turn more we great. wanted fun didn't really -- it was do out. they the to hope settings turn

John Campbell

Yes. Good experience for sure.

great. appreciate you. I the Thank Okay, all time, guys.

Operator

Bill concludes for I to turn back would like conference the session. to closing remarks. over This our any question-and-answer Foley

Bill Foley

after Yes. performance months. we've over after Thank days lot schedules great have thank last look quarter. our thanks, for to XX as during the taking second a gone story forward And to the And second information a your about that to we our XX I quarter for very again letter you you And over shareholder letter Thanks of And your to to And first past of everybody. phone. out over listen -- you the everybody, the the the and the quarter shareholder busy speaking time. much. again. time to opposed presentation

Operator

attending now for today's concluded. now has you Thank disconnect and you may conference presentation The

Cannae (CNNE) 23 Feb 212020 Q4 Earnings call transcript