By John Honovich, Published Apr 08, 2020, 08:58am EDT
Convergint has $1+ billion in junk debt putting significant pressure on the company. While the rapid debt buildup enabled the company to go on an unprecedented acquisition spree, the company is now facing a coronavirus crisis.
Inside this note, we examine:
Why Convergint had named themselves 'gopher sub'
What Convergint's debt rating is
Why the debt is so poorly rated, i.e., 'junk'
What mistakes the bond rater made that make the debt even risker
How coronavirus has impacted the company
Why Convergint has far more coronavirus risk than other integrators
How Convergint 'fun and laughter' contrasts with Convergint massive junk debt
What role Convergint's private equity owner can play in this crisis
What the future holds for Convergint
No ******** **** **********
********** *** *** ******* to ****'* ********* ** this ******.
'Gopher ***' / ********** ******
*** ***** *** ** not ********** *** ****** imagery, ********** ***, ** until ********, ********* ***** itself *** '****** *** Inc', ** ********* ** this **** ******:
*** ****, ******* **, 2018 -- *****'* ********* Service ("*****'*") *** ******** ratings ** ****** *** Inc. (*** "**********")
*'* **** ****** **** the ***** ********** ***** doesn't **** **** **** are * ***** ** badly *** *******.
******* ***** **** *** about ****. **** ***** them ***** *** ** that **** **** ** a ******* ****** ** junk ****. *** **** to *** '***** ***' is **** *********** **** super **** ****. **** gambled **** **** ***** be **** ** **** with $*+ ******* ******* before * ***** *********. They ****.
**** * **** ** fascinating ***** *** ********** references ** *** *********** of **** *** *** massive **** *****. *** or *** ***** ************ is '********' ** **** level, *** *** ***** is ****. **** **** make *****?
******, * ********* *** idea ***** ********** ****** such **** **** ****** people ********* *** ********* it ** ** *** some ****. ** *** so ********* * *** idea **** * ******* they *** ** ** mistaken.
*'* ********** ** ***/**** end ***** **** **** ready ** ***** ***** again ** ********.
* ******* *** *** USA, ** ***'* ** in *** ***** (** in **** ** ** out *****) ***** ****. End ***** ***'* **** good ***** ******** ***** until ******* (***** ***** right?).
* **** **** ******* this ******. ***, **** might **** ************* ********** in ***** ** **** their ********* ********** ******, but **** ********** ******** would **** **** **** they **** ******* **** their *****, *** **** it. **** *** **** couple ** *****, **** snatched ** *** *** best ******* ** ** area, ****** ********* **** strong **********, ********* ********* and *********** *********, ****-*** service ***********, ***, **** importantly, ********** ******* ************* with ***** *** *****. I **** **** *** the ********* ** ** area, *** * *** always ********* ** **********'* business *********** *** ************- they ********** ******* **** hand-holding **** **** ** my ***** *********.
********* ********* **** **** was ***** ** ** a **** **** *** the ******** ********, *** then ** *** *** black **** ****** ***** almost **************. **** ***'* Convergint's *****.
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Comments (47)
Undisclosed Manufacturer #1
*** ****** ** ***** is *********** *** ********** under ***** *************. ** they **** *** **** “recurring,” *** ** *** substance ** **** ** up, *** ********* ***** not ** ** ****. “Recurring *******” *** “*********** revenue” *** ** *** apart ** ** ***** is **** ****** ******’* for ***** *******!
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Undisclosed Manufacturer #2
** ****. *'** ****** with ********** ** * manufacturer ** *** **** and **** ****** **** impressed ** ***** ********** and *******. ****** *** and ******** (*** *** whole ****** *****) ** only *** ** ***** values. *** ****** *** accountability, *******, *** **** are **** "********" ******** values. *'* ***** **** trying ** **** * bit ** *** ************ is **** ********* *** than ****. *'* **** saying **** *** ***** Caddyshack ***** *****'* **** that **** *** * goofy ** ***** *** company.
**** ** ********** (*** households) **** **** ******* very **** ****** ******* (BC) *** ******** ** fail ** **** ****** and *** *********. * personally ***** **** *** economic ******* ** **** starting *** **** ** going ** ** *******. Governments **** ** ****** massive ******* ** ***** the ****** ** ********** that ****. ******** ***** will ** *****-***. ***** factors *** **** **********; I ***'* ****.
******* ******** **** *** best *** ****** *'* wrong ***** *** ****** universal ******** *** * see ** **** ******* started.
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Undisclosed Integrator #4
*'* ********** ** ***/**** end ***** **** **** ready ** ***** ***** again ** ********.
* ******* *** *** USA, ** ***'* ** in *** ***** (** in **** ** ** out *****) ***** ****. End ***** ***'* **** good ***** ******** ***** until ******* (***** ***** right?).
**** **** *** *********** squeeze *** **** ** Convergint, *** *** ***** security ********.
******** ******** **** **** be *** ** ****. Only *** ****** *******.
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Undisclosed Manufacturer #5
* ***** **** ************ #2. ** **** **** worked **** ********** *** are ******* ********* ** their **********, ***** *** technical ***** *** ******* culture. ***********, **** ****** the **** **** **** decided ** ***** ** much **** ***, ** use ** ** ********** as **** **** ** the ************ *****. ****'* a ***** **** ****** a ******* *******, ** you **** ****** ** the ****** *** ***** as **** ***.
*** ********** ***** *******, can **** ******* ************ for ********* *** **** taken ********* ****. *** same ***** ******** *********** after *-** **** **** companies ***** *** ******* the ********* ******** ****-**** and ***** **** *** through ****** ***** ********. Confidence, ******** **** ****** and **** *** **** in *** ******** **** a *** **** ****'* survive.
*** **** *** **** stock ****** ***** **** had ****** ******* *** of ******* ** ***** death, **** ****** *****, run **... ****. ** shouldn't ** *** ******** will ****** ** * great ********!
** ****** ********** **********. The ******** ******** ** having *** **** **** a *********** ****** ***, how *********** *** *** how ****..., ** *** knows *** ****. ********, historically, **% ** *** things ** ***** ***** never *******!
** *** ****** ****, we **** **** ********** partners **** *** **** now ***** ******* **'* and ***** ********, ****** the ********. ** **** others **** ***** ***-***** customers (******* ****** **********) that *** ********** ****** planning ******** *** ******** they **** ** **** quoted *** ********* ****** their ***. ****** *** preparing ***'* ** ***** to ****** ***** ******* for *** **** ** 2021. **** ******* ***** will ** **** ***** this ********* *** **** on ********** **** *** security ********, ****-***** ******** and ****...
** **** ***** ** the *******, ********** ************ is **********! **** *** those ** *** *****! They ******* ** **** emerge, ****** ****** **** later!
***** ********* *** *** quitting. **** *** ******** out *** ** **** relevant *** ** **** for **** ** ***** to ** ******, ****** and ******** **** **** ahead!
* ****'* ****** ** run *** ***** *** we ******* ** *** old ******;"***** ***** ***** ****, Tough ****** **!"
** ********* **** **** Convergint *** *** ****** in *** ******** *** face **********, ****** **** this ****** *****, ******** than **** **** ******!
*** **** ******** ****** - **** ****.
*** **** ****** ****** - **** ********!
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John Williams
****,
* ***'* **** ***** we ***** *** **** through *** ********* ******* of *** ******** ** you **** ****. *** indepth ********* * ****** go ** ****** **.
******.
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Undisclosed Manufacturer #6
** ****** ************ *** the "***********" ** **** with *** *** *********. In *** ******** ********** is *** **** ********** culture ***'** *********. ******* the ****** ** **** offices ** ****, *** you **** *** **** as **** "********* ******** integrator *****, ** ***** people", *** *** ****** asking *** *** * job, ***********, ***. ********** is **** ******, *********, and ***** ***** ********** is ***** ** **** strategic ********. ** *** a ***** ******** ***** project **** ****** ****** internal **********, *** ***** leaders ******* ** *** righted *** ****. ********** has **** ****, **** charging *** **********. * think **** **** ******* this, ***** ** ***** financial *******.
****** *** ***** *** over
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Corbin Hambrick
* ****'* **** *** article ** ********* ***** culture. * **** ** as * ********** ** the ***** **** *** before ****.
** *'* *** **** I ********** ***** ********* about ***** *******.
** ***** ** **** they'll ** ****** *** by **** *********** ** ownership *** **********.
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Charles Baker
***. **** *********. **** me **. :)
********** **** *** ******** an **** ********* **** where *** **********'* ********* is ********** ** ****** 3x ******.
****** *** *** ********* and *********** ***********. * always **** ** *********** to **-******** *** ******* that "*** *********" **** the **** ********** ** smaller *********.....**** *** ****** bigger. * ****** ********* "small" ******* **** **** of **** **** **** even **** ******* **** Convergint, *******, ******* **** are ******** ** **** an ****** *****/***** ** rescue ****.
** *** **** **** a *********** ******** ** business, *** ** * smaller ******* **** **** debt *** **** **-******* monthly *******, ** *** well-prepared ** ******* *** storm *** **-****** ** tackle *** *************.
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Undisclosed Manufacturer #7
******* ******* **** ***** buying "****" ****** *****:****
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Undisclosed #8
******* **** **** **************** ***:
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John Honovich
* ********** ************ *********:
** ******** ** ******** was:
** *** ** ****** else ** ********** ******** on ****, * **** update ****.
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Jim Kauker
******** ** ***** ** an ** ******, *** there ** * ***** in * **** ******... and *** ***** ** losing **** ********* ******* debt ****** ***** * front ****. ******* *********** will ****** ** ****** the **** ** *** laid *** ********** ********* as ** *** **** out ** **** ******. The *** ***** *** government ** ********* ********* to **** ****** ***** employees **** **** ******* integrators ** **** ****** chance ** **** *********, customers *** ************* **** Convergent *** **** ** “fun” **** ***** ** cheap, *** *** ** fun *** *** ******* of ****.
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John Honovich
*** *** ********* **** Convergint *********,***:
** ********:
**** *** ********, ***, and ********* *** ******** their ***** ** ***** signalling *** * ***** tactic *** ****** ********* when ********** ** *** context ** *** *******-****** company ********** ******.
******* ********** ******** **** me **** ********** ********* will ********** ** *** this ******. * ***'* doubt ****. * ** doubt **** ***** ********** employees ********** *** ************* of ******* ** ** so **** ****. **** should **** *** ********** executives *** **** *** not '***********, ***********, ***********' about *** *** **** they **** ******* **. Will **** ***? **** they ****** ******* *** risks ** ****** **** much **** **** ** a ******?
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Undisclosed Distributor #9
* **** **** ******* this ******. ***, **** might **** ************* ********** in ***** ** **** their ********* ********** ******, but **** ********** ******** would **** **** **** they **** ******* **** their *****, *** **** it. **** *** **** couple ** *****, **** snatched ** *** *** best ******* ** ** area, ****** ********* **** strong **********, ********* ********* and *********** *********, ****-*** service ***********, ***, **** importantly, ********** ******* ************* with ***** *** *****. I **** **** *** the ********* ** ** area, *** * *** always ********* ** **********'* business *********** *** ************- they ********** ******* **** hand-holding **** **** ** my ***** *********.
********* ********* **** **** was ***** ** ** a **** **** *** the ******** ********, *** then ** *** *** black **** ****** ***** almost **************. **** ***'* Convergint's *****.
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John Honovich
* ********** ********* **** now ********* ** ****************** ** **** ******. None *** ******* *** coherent ******* ** *** evidence *** ******** ******** here.
*** ******** **** ** the *********** *** ********* with *** *********:
** ** ********* **** neither ********** ********** *** their ********* **** ****** capable ** ******* *** facts ** *** ******.
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John Honovich
******: ***** ** ********* this ******,*****'* ******** * *** report *********** **********'******** **** ****** ** negative.
** **** ***** ********** for ******* *** **** be ********* * ****** up **** ******** ****.
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John Honovich
***** *** *** **** a***** ********** ******** ******** on ********. **** *** *** is ********* ****:
***** ***** *** * good ******* ** *** companies **** ****** ***** policies. ** ***** **** is * **** ********** of ********** *******? *** "we *** *** ****" and ****** *** ********** us **** **** * financial ****** ** **** jealous...
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Undisclosed Integrator #12
** * ****** *** Simplex, ****** **** *** for **** ***** ***** Tyco **** ****. **** worked *** **** ***** local ******* **** *** past ** *****. *** the **** ** ***** I **** ****** ** a **** **** *********** security *******, ***, ****, other ******* ********* ** our **** *** * can *** **** * have ****** **** *** the *** *********, **** small *********, ****** *** US, **, *** **, and ********** *** **** the **** ********** **** it ***** ** ********* service *** *******. ** are ******** ******* ** several ******** ***** ***, to *** * **** of ******* *** ****** installation, ***** *** **** force ** *** ******* from ****. ** ** end **** (*****-******) * sure **** **** **** can ****** ***** ****** and ***** ***** ************ back ** ***** ** should **. *** ***** leadership ** * *** of *** ****** **** JCI *** **** *********** Convergint *****. * **** hope *** ****** ** executive ********** **** **** downturn ** ** *********** to ********** ***** **** and *** **** **** the *** **** *** road.
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John Honovich
******: ** **** ********** *** *****, ** **** **** Convergint's ******* ** ** 2% *** *** ***** 5 ****** ** ****, year **** ****. ***** Convergint ********** **** ** was ******, **** ******* that **** * *****'* revenue *** ************* ******** (range ** ******** **-**%). However, **********'* *** **** the **** * ****** were *** ** *** as **** ******.
***, **** *** ****** for ** **** ** be **** **** **** year, ***** ******* ********* June ******* ** -**% yoy, ***** *** ***** 5 ****** **** *** +2%.
*** *** **** ** the ****, **********'* *** is *** ***** ******, with *** *** ******:
** ********** ** ***** doing ** ****, ** will ** *********** ** see **** **** ******* the **% *** **** for ***** *********.
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