Pitch: Provider of learning management systems to private schools in Brazil. Now trades significantly below historical multiples due to temporary headwinds. Set to grow by high double digits for multiple years driven by secular tailwinds of student shift from public to private education as well as textbooks’ shift to online. CEO owns almost 50% of the stock and the original venture backer recently re-bought into the story.
Valuation: ARCE trades at 9x fwd EBITDA vs historical multiple of 21x. Comparable US LMS companies all trade at 7x+ sales and 20x+EBITDA with slower growth and lower margins.
Exp. gain: Multi-year 20%+ IRR
Full ARCE write-up (free guest account required):