For those who missed it, there was an interesting article in...

For those who missed it, there was an interesting article in last week's AFR on PPE (https://www.copyright link/street-talk/red-hot-rollup-people-infrastructure-to-unveil-new-deal-20190227-h1brio). This was posted ahead of some small transactions PPE announced earlier this week.

Key points from the article from my perspective are:

- PPE is run by a former private equity dealmaker, and they are using Ord Minnetts and Morgans to heavily market the stock (see https://www.morgans.com.au/Blog/2018/August/People-Infrastructure-nursing-business-acquisition). ASH takes a much more passive roll in marketing their stock, so it probably flies under the radar of a lot of small/micro cap managers - at least in the short term;
- After posting a pro-forma EBITDA of $10m in 2017, PPE are expected to hit $20m in FY2020, due to their aggressive acquisition program. Note: I am not advocating such an aggressive strategy for ASH as I like their disciplined acquisition strategy, however it does show the opportunities for growth.
- PPE remains cheap versus ASX small caps (at least on a P/E basis), despite being valued about ~2.5x more than ASH - as discussed in earlier posts;
- Perennial has a 10% stake in PPE.

Overall, I think PPE may be a bit of a 'hot stock' at the moment and I would be concerned about that if I held it, however it does highlight the interest in this sector, its strong growth prospects, and the significant value in ASH that is yet to show up in the share price. PPE also doesn't have a training business, which I think over time could become a meaningful source of diversification to the more cyclical parts of ASH's labour hire business.