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May 19·edited May 19Liked by Sebastian

Excellent write up. Do you know why they added a new 8 mil debt this qtr? Also, how did you arrive at the EV?

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Thanks! The 8 mil new debt belongs to the Brazil JV, which will be sold in Q2. I arrived at the EV by taking the debt that will be left from the US & Canadian Operations and subtracted the 22m in cash they will receive from the sale.

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I am only familiar with the private label operations they had overseas in Asia and for them being focused on doing private label e.g. a supermarket chain outsources private label to them... The problem is that eventually the chain can figure out how to do it themselves and cut them out as the pricey middlemen + private label people have told me SPAR charges too much aka its cheaper to source products (this is for Asian supermarket chains who are closer to the suppliers & have Chinese speaking staff) and do everything in-house - assuming you can find experienced private label people to work for you directly and do it... In fact, I know some SPAR people who ended up working for their supermarket client when they decided to cut out SPAR the middlemen or when SPAR scaled back their ops in Asia (after loosing a key client from Japan...)... I guess you can say they are like CBRE or JLL - there will always be a need for middlemen in some industries BUT I am not familiar with SPAR's other middlemen type activities you mentioned or what the market is like for those... Not sure if they even still have sourcing or buying offices in Asia - big American retailers would...

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Thanks for your comment and insights. With store openings/ remodeling, the stores usually don’t have any staff beforehand, so they rely on a third party to do the remodeling for the opening. And for the merchandising business in the US, if unemployment is low they compete for labor and this drives prices, so SPAR is in that case oftentimes a cheaper solution than in house.

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