YB new stock pitches (Mon, Mar 10)

WM Technology, Inc. (MAPS), a cannabis-focused online marketplace, is trading at $1.30 with a $1.70 indicative bid from founders who own 32%. The stock offers significant upside potential of 42%+ to a likely deal price of $1.85+, considering the need for majority minority approval and the conversion of contingent shares. Pre-bid, MAPS traded at $1.50 following strong Q3 earnings, with a cheap valuation of 5.5x EV/EBITDA at the bid price. Downside risk is limited to 10-15% if the deal breaks. The transaction is expected to conclude in the near term, potentially in 1H, with minimal due diligence required. Financing concerns appear overblown, as the bidders need to secure about $194 million, or 4.5x EBITDA, which seems manageable given the business fundamentals. The current implied deal probability of 20% seems too low, making MAPS an attractive event-driven opportunity with a favorable risk-reward profile.

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PHINIA Inc. (PHIN), a spin-off from BorgWarner, manufactures internal combustion engine components with 62% of revenue from fuel systems and 38% from aftermarket parts. The company's shares have risen 40% since the spin-off, currently trading at $46. Recent out-of-cycle executive contract changes, including increased severance and guaranteed full stock vesting in a change-of-control scenario, suggest a potential sale after July 3, 2025, when the two-year tax-free period for BorgWarner ends. PHIN is trading at a 50% discount to peers, with its current enterprise value at $2.49 billion. The market may be overlooking the higher-valued aftermarket business, as fuel system companies trade at 6x EV/EBITDA while aftermarket peers trade at 14x EV/EBITDA. A private buyer could potentially pay a 40-60% premium over the current stock price, recognizing the value of the aftermarket business and hybrid technology.

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SBM Offshore (SBFFY), the world's largest FPSO fleet operator, has a $34 billion backlog against a $3.1 billion market cap. The company is transitioning to a build-operate-transfer model, accelerating cash flow and reducing debt. 2024 revenue guidance is $6 billion+, with EBITDA at $1.9 billion. SBFFY dominates the Guyana deepwater market and offers a 10% yield through dividends and buybacks. The company's turnkey business could add $3 billion in value. With 17 FPSOs in operation and 4 under construction, SBFFY is undervalued at a 17% discount rate compared to its 6% WACC. The company's Fast4Ward strategy standardizes FPSO designs, reducing construction time and costs. Recent FPSO sales to ExxonMobil will reduce net debt by $2 billion. SBFFY secured a major contract with TotalEnergies for the GranMorgu FPSO in Suriname. HAL Trust, controlled by the Van der Vorm family, owns 23% of SBFFY. Catalysts include FY earnings release on February 20th, new FPSO awards, continued buybacks, significant debt decline in 2024, and potential softening of market attitudes towards oil and energy investments.

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