Thomas Bushey of Sunderland Capital Partners presented his in-depth investment thesis on eDreams Odigeo (Spain: EDR) at Best Ideas 2018.

eDreams Odigeo is a leading online travel agency based in Barcelona. The shares offer an attractive risk-reward in light of the strong business fundamentals and meaningful discount to peers and intrinsic value. The prospect of M&A, brought forth by a recently announced strategic review, provides a near-term upside option. As the online leader in flights in Europe, with ~27% market share, eDreams recently announced the rollout of a “dynamic packages” (hotel) business, which will provide margin accretion and diversify the revenue stream. eDreams is a leader in mobile, with 37% of flight bookings coming via its mobile platform, reducing customer acquisition costs. The fundamental improvements support guided EBITDA growth of ~10% annually over the next three years. In addition to operational improvements, the company’s debt can be refinanced in mid-2018, adding to cash flow growth potential. In light of the strong fundamentals and discount to peers at 6.2x EV/EBITDA for FY19 vs. 14.5x for peers, Tom sees substantial upside. A potential M&A transaction serves as an option that would close the valuation discount.

About the instructor:

Thomas Bushey has over fifteen years of experience managing and investing capital. Prior to founding Sunderland, he was a portfolio manager at Blackrock. Prior to Blackrock, Mr. Bushey was a Senior Analyst for Mayo Capital Partners from 2010 to 2012. Before that, he served a Senior Analyst at Millennium Partners from 2008 to 2009, where he was part of a global industrial investment team. Mr. Bushey began his career as an analyst for Credit Suisse First Boston (“CSFB”) and later moved to HCI Equity Partners (Thayer Capital). At CSFB, he executed and analyzed mergers, acquisitions, leveraged buyouts, divestitures, takeover defenses, restructurings and debt and equity financing for corporate clients and financial sponsors. At HCI, he was a member of the investment team responsible for private equity funds focused on industrial products and services. Mr. Bushey has a BS in Economics from the Wharton School of the University of Pennsylvania.

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