Thank you Madamswer, your posts always provide both great insights and analysis, and a perfect platform for forum discussion and debate. A lot of my most successful investments have grown from a similar scenario, either with the fast growing, high margin division reaching critical mass; or a loss making division being sold off or closed down. Hopefully KYP (and VBC among others) will fit the bill.
Do you see the drop in traditional business as predominantly cyclical? There could be potential upside on your estimates if so. I also expect greater upside in SaaS revenue and ebitda. They have developed tremendous optionality and cross-selling opportunities, while (as you mentioned) holding costs steady for 3 years. Coupled with reduced downside risk from large cash reserves, sector diversification and greater recurring revenue, their valuation looks extremely attractive to me.
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