Lind Research #7

Welcome to Lind Research. This week, we focused on Humble Group $HMBAF ( 0.0% ), and the flagging of a new shareholder, Briarwood Capital.

Did you miss our latest research report? We will make it public on Wednesday this week; for now, only Premium subscribers have access. The share is up only around 9% since we published the case report, so it’s still early days.

Briarwood enters Humble Group as a +5% owner.

On Friday last week, Briarwood Capital passed the flagging threshold in $HMBAF ( 0.0% ) as they increased their stake to 5.46% of the capital. They now own close to 24.4 million shares in the Nordic FMCG company, up from 19.2 million shares. The share rose sharply after the news broke.

Share decline, due to growth concerns

The share price of Humble has declined by approximately 35% since the start of the year. During this time, EBIT margins have continued to strengthen, but the growth rate has shown some weakness. Currently, on a LTM basis the company is trading at an EV/EBIT of 18x, down from about 27x at the beginning of the year. This indicates, in our view, that the market has concerns about the future growth rate of earnings.

Briarwood likely believes that the current decline in growth is only temporary, and it will stabilize at higher levels. Growth in Q1 accelerated, despite Easter being in Q2 compared to Q1 in 2024. When examining EBIT, the growth has been strong, which may be the angle Briarwood is pursuing.

In the Q1’25 report, the company stated the following:

So the management seems positive in improving cash flow and results in the coming quarters.

Who is Briarwood Capital?

Briarwood Capital is a New York-based investment firm that has established significant positions across global markets while maintaining a focused approach to value creation. The firm, managed by Briarwood Chase Management LLC, oversees +$800 million in total assets under management. Founded in 2013 by Aalap Mahadevia.

Core Investment Philosophy

Briarwood’s investment approach focuses on micro-, small-, and mid-cap equities globally, targeting areas where many asset management firms choose not to participate due to size and liquidity constraints. The firm seeks to invest in businesses with strong growth prospects available at prices substantially below their intrinsic value, effectively combining growth and value investment characteristics.

Exited Positions

Divestment of Karnov Group AB - Sweden

In May 2024, Briarwood sold 2,984,313 shares (≈7.5% stake) in Karnov Group AB (KAR), a Swedish legal and regulatory information provider, to Greenoaks Capital at SEK 84 per share (≈$8.10), totaling SEK 250.7 million ($24.2 million).

Investment Timeline and Returns

Return profile: While entry price remains undisclosed, Karnov’s share price appreciated 65% between 2021–2024, suggesting strong IRR.

Basware Corporation - Finland

Briarwood participated in a consortium with Accel-KKR and Long Path Partners to acquire 96.2% of Basware Corporation (HEL: BAS1V), a Helsinki-based provider of cloud-based procure-to-pay solutions, through a €1.2 billion tender offer in August 2022.

Investment Thesis and Exit Dynamics

• Entry (2019): Briarwood initially acquired a 4.71% stake in Basware, drawn to its SaaS transition and Nordic market dominance.

• Value creation: The consortium cited Basware’s 20% annual recurring revenue growth and 35% EBITDA margins as key drivers.

• Exit multiple: While exact returns remain undisclosed, the 28% premium to Basware’s 30-day VWAP pre-offer suggests substantial upside.

Post-Exit Trajectory

Basware was delisted from Nasdaq Helsinki, with the consortium planning to accelerate R&D investment in AI-driven invoice automation tools.

Current Public Positions and Strategic Holdings

Hightech Payment Systems - Morocco

Briarwood Capital Partners LP crossed the 5% ownership threshold in Hightech Payment Systems (HPS), a leading Moroccan payment technology firm. The acquisition on December 11, 2024. The firm has declared its intention to continue purchasing HPS shares within the next six months, signaling strong conviction in the company’s growth trajectory.

The share price of HPS initially increased quickly after Briarwood disclosed the position, but has since fallen back close to around their purchase price.

Sidetrade S.A. - France

Briarwood surpassed the 5% ownership threshold in Sidetrade, the global leader in AI-powered Order-to-Cash applications, by the end of 2024. Robert Blatt, Managing Director at Briarwood, emphasized the firm’s commitment to exceptional businesses and management teams in his public statement regarding the Sidetrade investment. The investment thesis centers on Sidetrade’s strategic focus on North American growth, exceptional margin potential, and its status as a robust SaaS player offering built-in growth and revenue predictability.

What does this mean for Humble?

Lind finds Humble to be a quality company in an interesting and growing niche. Some slight growth headwinds, but they could likely be only temporary. We do not have a clear view on the share, but we think the decline in the share price, combined with margin uptake and Briarwood’s entry, warrants further research, as this might be a great timing for a long-term holding.

Nordic fund letters

This section reviews the monthly letters and investor disclosures from prominent funds to identify interesting companies for further research.

Elementa: Provided comments on core holdings:

• RaySearch rebounded sharply in April, gaining 16% after a major order from Odense University Hospital helped offset earlier declines following the founder/CEO’s share sale. Eyes now turn to the Q1 report in May.

• Surgical Science, which develops VR training systems for surgeons, continues to benefit from strong structural trends. Insider buying by the CEO ahead of the Q1 report is seen as a vote of confidence.

• BHG reported solid progress with improving sales growth, rising EBITDA margins, and stronger cash flow, suggesting key operational metrics are trending in the right direction.

Insider activity

Here, we look for standout transactions from company insiders that might indicate a need for a closer look at the company.

Richard Carter, CEO of iGaming provider GiG Software, has increased his shareholding by 27% after Q1 2025, buying 385,000 shares. He now owns nearly 1.83 million shares.

Rikard Fröberg, CEO of fiber tech company Hexatronic, purchased 45,000 shares on May 27 at $2.80 per share, totaling $126,000 (SEK 1.2 million). His total holding is now 200,000 shares.

Claes Lindahl, CEO of Intellego, acquired approximately 48,000 shares at SEK 83.73 each, a transaction worth around SEK 4 million. He previously held about 3.6 million shares.

Carl Bennet bought 2.01 million shares in medtech company Arjo on May 28 at SEK 30 per share, totaling SEK 60.3 million. He now owns 25.01% of the capital and 53.19% of the voting rights.

Research, Cases & Tweets

In this section, we take a look at some recent research reports, tweets, or other cases we have found in the regular screening feed.

Lindex, special situation

Over at InvesterMera, they highlight an interesting case in Lindex.

Lindex’s core fashion business is profitable, but dragged down by its loss-making Stockmann department stores. A strategic review, set to conclude by Q2 2025, could lead to a divestment. If Stockmann is sold or shut down, Lindex would trade at ~7x EV/FCF, implying 50% upside.

Even without a sale, valuation at ~11–12x EV/FCF looks reasonable. A new warehouse investment is nearly complete and will boost annual cash flow by €40m, supporting the case regardless of Stockmann’s outcome. With limited downside (~10%) and near-term catalysts, the risk/reward looks attractive.