This is one of the most comprehensive write-ups I've seen on MIDD - the depth of analysis on the go-to-market restructuring and replacement cycle timing is particularly valuable. What really resonates is the argument that Ed Garden's involvement marks a genuine inflection point in capital allocation philosphy. The shift from serial acquirer chasing growth for growth's sake to disciplined operator focused on FCF return is exactly what this business needs. Your point about the Taylor acquisition being inconsistent with Selim's stated strategy is spot-on - buying a market at 15.4x EV/EBITDA when you've historically done tuck-ins at 1.2-1.4x sales multiples was a clear departure. The replacement cycle thesis for CFS equipment feels underappreciated by the market - if core equipment from the 2010-2016 period is already overdue and the industry dynamics suggest operators have delayed capex as long as possible, the mean reversion to historical 6.5% organic growth could happen faster than consensus expects. The SOTP math is compelling too - if FP spins at peer multiples and RK eventually gets monetized, you're essentially getting a cleaned-up CFS business trading at a significant discount to intrinsic value.
This is one of the most comprehensive write-ups I've seen on MIDD - the depth of analysis on the go-to-market restructuring and replacement cycle timing is particularly valuable. What really resonates is the argument that Ed Garden's involvement marks a genuine inflection point in capital allocation philosphy. The shift from serial acquirer chasing growth for growth's sake to disciplined operator focused on FCF return is exactly what this business needs. Your point about the Taylor acquisition being inconsistent with Selim's stated strategy is spot-on - buying a market at 15.4x EV/EBITDA when you've historically done tuck-ins at 1.2-1.4x sales multiples was a clear departure. The replacement cycle thesis for CFS equipment feels underappreciated by the market - if core equipment from the 2010-2016 period is already overdue and the industry dynamics suggest operators have delayed capex as long as possible, the mean reversion to historical 6.5% organic growth could happen faster than consensus expects. The SOTP math is compelling too - if FP spins at peer multiples and RK eventually gets monetized, you're essentially getting a cleaned-up CFS business trading at a significant discount to intrinsic value.
Thanks Robots and Chips