This is Zack Fuss. Today we are breaking down Chemed. Chemed represents the union of two seemingly distinct businesses: end-of-life healthcare and plumbing services. As our guest aptly puts it, old houses and old people. The two underlying businesses, VITAS and the widely recognized Roto-Rooter, both offer interesting stories in their own right.

The strength of this business has been its intentional and well-executed capital allocation strategy, which has resulted in a 21% EPS CAGR since 2003, a market cap of $8.5 billion, and a net cash balance sheet. 

On the one hand, you have Vitas Healthcare, a leading provider of end-of-life hospice care in the US founded in 1978. And on the other hand, there's Rotor-Rooter, the iconic plumbing drain cleaning and water cleanup service provider whose roots go all the way back to 1935. So, how did an end-of-life healthcare company and an emergency plumbing business end up under the same corporate umbrella?

I'm joined today by Chadd Garcia, a portfolio manager at the Ave Maria Focused Fund. We'll discuss their unique business models, the growth drivers of the businesses, and why Chemed and its management team believe that this unique combination ultimately works for maximizing shareholder value. 

Please enjoy this Breakdown on Chemed Corporation.

Subscribe to Colossus Review

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

—-

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:00:12) ChemED's Business Philosophy

(00:01:45) History and Evolution of ChemED

(00:05:13) Roto-Rooter: Business Breakdown

(00:08:19) Vitas: Business Breakdown

(00:09:15) Vitas: Business Breakdown

(00:13:27) Roto-Rooter: Competitive Landscape

(00:20:17) Comparing Roto-Rooter and Vitas

(00:21:20) Vitas: Market Dynamics and Growth

(00:34:41) Capital Allocation and Future Prospects

(00:36:48) Lessons From Creaking Down Chemed

Today we are breaking down Ecolab, a global sustainability leader offering water, hygiene, and infection prevention solutions that protect people & the resources vital to life. As of this recording, Ecolab has a $66 billion market cap and protects over 36% of the world's packaged food supply and over 44% of the global milk supply.

My guest is Todd Wenning, founder of KNA Capital Management, who has a knack for finding interesting businesses. We get into Ecolab's very on-brand origin story, how the business kept that core focus throughout its history, and how it became one of two vendors that any US McDonald's must work with. Please enjoy this Breakdown on Ecolab.

Subscribe to Colossus Review

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

—-

This episode is brought to you by Octus, formerly Reorg, is the essential credit intelligence and data provider for nearly 40,000 professionals across the world’s leading buy side firms, investment banks, law firms and advisory firms. By surrounding unparalleled human expertise with embedded AI technology, data and workflow tools, Octus unlocks powerful truths that fuel decisive action in financial markets. Visit octus.com to learn how rigorously verified intelligence is delivered at speed to create a complete picture across the entire credit lifecycle. 

—-

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:03:24) Founding Story and Early Innovations

(00:04:52) Ecolab's Modern Business Segments

(00:06:10) Chemical Foundations and Major Acquisitions

(00:07:05) Sustainability and Solid Chemical Solutions

(00:08:36) Market Opportunities and Challenges

(00:10:09) The Nalco Acquisition and Water Solutions

(00:15:40) Customer Relationships and Sales Strategy

(00:20:29) Economic Sensitivity and Resilience

(00:22:34) Financial Performance and Growth Projections

(00:24:34) Capital Allocation and M&A Strategy

(00:25:58) Competitive Landscape and Market Position

(00:28:20) Future Growth Drivers and Water Focus

(00:37:18) Valuation and Investor Considerations

(00:40:18) Lessons from Breaking Down Ecolab

Today, we explore the world of tools to break down Snap-on. Snap-on has been around for over 100 years and operates with over a $17 billion market cap. It has continuously evolved the straightforward model of selling tools to specialists, like mechanics, into a durable business model while carving out a leadership position in the professional tools market.

My guest is Matt Fleming, portfolio manager at William Blair. Matt gets into what makes Snap-on stand out, the early days of tool innovation, the relationship-focused sales team built around a franchise model, and a financing program that dates back to the very early days.

If you've only lived in the world of DeWalt tools, you'll have some fun learning about the professional world through Snap-On. Please enjoy this breakdown of Snap-on. 

Subscribe to Colossus Review

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

—-

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:02:22) Understanding Snap-on's Market and Customers

(00:06:19) Snap-on's Rich History and Evolution

(00:15:03) The Financial Dynamics of Snap-On's Franchise Model

(00:19:42) Snap-on's Competitive Edge and Innovation

(00:22:32) Snap-on's Financial Model and Growth Drivers

(00:24:28) Breakdown of Tool Industry Segments

(00:25:39) Challenges in the Evolving Auto Repair Market

(00:28:38) Historical Performance During Economic Downturns

(00:30:25) Margin and Cash Flow Analysis

(00:34:16) Capital Allocation and Risk Management

(00:41:41) Valuation and Market Comparisons

(00:44:58) Key Lessons from Snap-on

Today we are breaking down Goosehead Insurance. I always enjoy hearing about how a new entrant has effectively carved out a niche in a world of incumbents and Goosehead fits that billing perfectly. 

I'm joined by Geoff Collette, founder and PM of Aeon Capital Partners, and he walks us through the story of Goosehead identifying a bottleneck in the home-buying process. 

We also cover the evolving market, where captives like State Farm and Allstate are leaving opportunities for independent players like Goosehead to provide value. 

There's a lot to learn from Goosehead and its evolution, with notable themes like technology, the franchising model, and an emphasis on speed. Please enjoy this breakdown on Goosehead Insurance.

Subscribe to Colossus Review

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

Octus, formerly Reorg, is the essential credit intelligence and data provider for nearly 40,000 professionals across the world’s leading buy side firms, investment banks, law firms and advisory firms. By surrounding unparalleled human expertise with embedded AI technology, data and workflow tools, Octus unlocks powerful truths that fuel decisive action in financial markets. Visit octus.com to learn how rigorously verified intelligence is delivered at speed to create a complete picture across the entire credit lifecycle. 

—-

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:04:26) How Goosehead Attracts Customers

(00:05:15) Market Focus and Business Scale

(00:06:07) Goosehead's Growth and Key Players

(00:08:51) The Founding Story of Goosehead

(00:12:28) The Shift from Captive to Independent Agents

(00:15:29) Challenges in the Insurance Market

(00:19:37) Goosehead's Unique Business Model

(00:36:42) Franchising and Corporate Strategy

(00:41:00) Operational Challenges and Strategic Adjustments

(00:46:28) Financial Performance and Future Prospects

(01:00:29) Competitive Landscape and Risks

(01:07:40) Valuation and Lessons From Goosehead

Today, we are breaking down the food catering giant Compass Group. Whether it's your corporate cafeteria, the food stands at a sporting event, or the old hospital food tray, the food services industry is all around you. Compass is the giant in this space, with a history that dates back to the emergence of this outsourced trend.

My guest is Asif Jeevanjee, Chief Executive of Oakmount Capital. Asif talks through both the business and the sector. How does the ecosystem work? What do contracts typically look like? And why had I heard of Aramark but not Compass, when Compass is nearly double the size? Here is another example of carving out an effective business model around an essential need product. Please enjoy this breakdown of Compass Group.

Subscribe to Colossus Review

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

—-

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:01:22) Understanding the Food Service Market

(00:05:03) Contract Structures and Retention

(00:11:47) The Origin Story of Compass Group

(00:17:33) Expansion into the US Market

(00:21:34) Sectorization and Market Penetration

(00:27:45) Growth Strategies and Pricing

(00:29:07) Financial Dynamics and Margins

(00:30:41) Procurement and Food Buy

(00:35:24) Labor Management and Technology

(00:37:55) Impact of Economic Cycles and Covid

(00:43:27) Capital Allocation and Valuation

(00:51:44) Lessons From Breaking Down Compass

(00:54:02) Key Lessons from Compass

Today we are breaking down EssilorLuxottica, a global leader in the eyewear industry, formed by the merger of Essilor and Luxottica in 2018. Today the business sports a nearly $130 billion market cap. EssilorLuxottica represents a vertically integrated business, encompassing design, manufacturing, distribution, and retail operations across both vision care and eyewear fashion segments.

To break down EssilorLuxottica, I am joined by Swetha Ramachandran who manages the Artemis ‘leading consumer brand’ strategy and is co-manager of the ‘global select’ and ‘global focus’ strategies. 

Swetha analyzes the strategic rationale behind the merger, assessing how it shaped the company's competitive advantages. 

We discuss the economics of prescription lenses, high-fashion sunglasses, and iconic brands like Ray-Ban and Oakley. We also explore the impact of emerging technologies like Smart Glasses, the Ray-Ban Meta glasses, and evolving consumer preferences on the eyewear market, as well as the competitive impact of upstarts like Warby Parker. Please enjoy this breakdown of EssilorLuxottica.

Subscribe to Colossus Review

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

Octus, formerly Reorg, is the essential credit intelligence and data provider for nearly 40,000 professionals across the world’s leading buy side firms, investment banks, law firms and advisory firms. By surrounding unparalleled human expertise with embedded AI technology, data and workflow tools, Octus unlocks powerful truths that fuel decisive action in financial markets. Visit octus.com to learn how rigorously verified intelligence is delivered at speed to create a complete picture across the entire credit lifecycle. 

—-

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:04:24) Essilor Luxottica: A Unique Business Model

(00:05:08) Market Leadership and Revenue Breakdown

(00:08:13) The Merger: Essilor and Luxottica

(00:10:18) Financial Performance and Strategic Investments

(00:12:22) Challenges and Competitive Landscape

(00:18:37) Global Operations and Market Strategy

(00:21:04) Innovations and Future Prospects

(00:22:36) Financial Analysis and Capital Allocation

(00:26:11) Competitive Pressures and Market Position

(00:28:47) Geographic Footprint and Strategic Growth

(00:30:44) Acquisitions and Strategic Endeavors

(00:32:38) Partnerships and Technological Integration

(00:35:13) Summary and Key Takeaways

(00:41:36) Lessons from EssilorLuxottica

Today we are breaking down Watsco, the market leader in HVAC distribution with a unique value proposition. If you've ever had an air conditioning issue, there's a decent chance it was a Watsco distributor on the other side of that phone call.

My guests today are Lucy Adams, Investment Director at Caledonia Investments, and Alan Murran, Co-Head of Public Companies at Caledonia Investments. Lucy and Alan help track the history of Watsco like the initial pivot from manufacturer to distributor and how Watsco formed relationships with the major OEMs like Carrier. We also dissect their reputation for a strong culture, with what has to be one of the most unique employee compensation plans in effect. Please enjoy this breakdown of Watsco.

Subscribe to Colossus Review

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:03:34) Watsco's Role in HVAC Distribution

(00:04:40) Watsco's Business Model and Services

(00:06:42) Real-World Example of Watsco's Impact

(00:09:28) Market Position and Competition

(00:12:55) Historical Evolution of Watsco

(00:15:52) Exclusivity Agreements in HVAC Industry

(00:18:05) Residential vs. Commercial Operations

(00:21:04) Growth Strategies and M&A Philosophy

(00:26:45) Carrier Joint Venture and Future Opportunities

(00:29:40) Watsco's Multi-Brand Acquisition Strategy

(00:31:34) Gross and Operating Margin Expansion

(00:33:24) Pricing Strategies and Market Dynamics

(00:35:16) Recurring Revenue and Business Model

(00:37:36) Cash Flow Management and Capital Allocation

(00:40:52) Technology Adoption and Digital Transformation

(00:45:50) Incentive Programs and Ownership Culture

(00:50:45) Risks and Competitive Landscape

(00:55:02) Lessons from Watsco

 ​Today, we are breaking down the  global alternative asset manager, Apollo. I reflected on my personal experiences with Apollo for this episode, and there's a saying that hard work can beat talent when talent doesn't work hard. Well, Apollo has talent, and Apollo works really damn hard. They will do everything they can to protect their capital, so if you're on the other side of the table from them, you never feel fully comfortable.

I am joined by Hunter Hopcroft, a financial analyst and writer based in New York. We get into what makes Apollo, Apollo, and Hunter share the backstory of how it was born out of Drexel Burnham and Michael Milkin’s DNA. We get into some of the early deals, the theme of craving complexity, how they differ from the KKRs or Blackstones, and the future of the industry.

Please enjoy this Breakdown of Apollo.

Subscribe to Colossus Review

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

—--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:02:49) Apollo's Current Landscape

(00:07:45) Apollo's Founding and Early Days

(00:10:39) Key Deals and Strategies

(00:17:09) The 2000s and Financial Crisis

(00:22:10) IPO and Public Transition

(00:25:47) Leadership Transition to Mark Rowan

(00:31:20) Rowan's Vision and Athene Merger

(00:35:12) Investment Strategies of Alt Managers

(00:36:28) The Athene Merger and Its Implications

(00:38:30) Rowan's Breakthrough in Spread Generation

(00:39:49) Innovative Asset Origination Platforms

(00:44:42) Private Credit and Market Dynamics

(00:46:49) The Future of Apollo and Private Credit

(00:52:09) Evaluating Apollo's Business Model

(01:05:33) Reputation and Evolution of Apollo

(01:08:50) Lessons from Apollo

Today we are breaking down machine vision leader, Cognex. Cognex Corporation is an American manufacturer of machine vision systems, software and sensors used in automated manufacturing to inspect and identify parts, detect defects, verify product assembly, and guide assembly robots. It is not your typical reoccurring revenue story. They are a self proclaimed cyclical that has tended to focus on a specific customer segment over time, looking for S curves that might trigger their next growth era.  

Our guest today is Brett Larson from NZS Capital. Brett and I covered Trane Technologies last year, and today he gives us a different angle on the industrial economy with Cognex. We get into the history of machine vision and how Cognex is a factory player. Please enjoy this business breakdown on Cognex.

Subscribe to Colossus Review

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is sponsored by Finley - modern debt capital management software for borrowers and lenders. Ask around and you'll find that nearly every operator or investor has experienced the operational nightmare of managing debt capital. Finley works by translating unstructured credit agreements into code, which gets all parties on the same page and helps them streamline the credit management lifecycle--think covenant reporting, interest and fee tracking, and portfolio analysis. Join the forward-thinking finance leaders, investors, and bank executives already modernizing their debt capital operations with Finley. Learn more and request your demo at finleycms.com. 

—--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Learn About Finley

(00:04:28) Overview of Cognex and Its Products

(00:07:29) Market Size and Growth

(00:08:23) Competitors and Market Position

(00:12:35) Sales and Customer Base

(00:13:48) History and Evolution of Cognex

(00:17:36) Deep Learning and Edge Learning

(00:22:42) End Markets and Applications

(00:26:32) Financials and Market Cycles

(00:28:54) Culture and Leadership

(00:39:13) Valuation and Risks

(00:43:54) Key Lessons From Cognex

Today, we are breaking down Rolls-Royce. A fair warning to those expecting to hear about luxury automobiles, that division was split from this business in the 1970s. But as we discuss the history of Rolls-Royce on this episode, you will hear how the DNA of this company still ties together from its early 1900s origins.

Our guest is Graeme Forster from Orbis Investments. Graeme walks us through the core business of Rolls-Royce in the aerospace market, the evolving duopoly of the wide-body aircraft engine manufacturers, and the ups and downs of properly capturing the economic opportunity. I really appreciated Graeme's intellectual honesty in discussing Rolls, and I expect you will, too. Please enjoy this Breakdown on Rolls-Royce

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is sponsored by Finley - modern debt capital management software for borrowers and lenders. Ask around and you'll find that nearly every operator or investor has experienced the operational nightmare of managing debt capital. Finley works by translating unstructured credit agreements into code, which gets all parties on the same page and helps them streamline the credit management lifecycle--think covenant reporting, interest and fee tracking, and portfolio analysis. Join the forward-thinking finance leaders, investors, and bank executives already modernizing their debt capital operations with Finley. Learn more and request your demo at finleycms.com.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Follow us on Twitter: @JoinColossus | @ReustleMatt | @domcooke | @zbfuss 

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Learn About Finley

(00:04:54) Overview of Rolls-Royce

(00:08:35) History and Evolution of Rolls-Royce

(00:10:44) Rolls Royce's Aerospace and Defense Ventures

(00:11:57) Challenges and Nationalization

(00:14:43) Current Business Segments and Market Position

(00:20:57) Service Agreements and Profitability

(00:27:41) Engineering Excellence vs. Commercial Strategy

(00:31:26) The Aerospace Business Ecosystem

(00:33:11) Rolls-Royce's Margin Profile

(00:35:13) Challenges and Changes in Management

(00:37:28) Cost Structure and Revenue Optimization

(00:38:32) Engine Performance and Development

(00:40:04) Market Dynamics and Competition

(00:49:13) Future of Nuclear Reactors

(00:52:46) Capital Allocation and Management

(00:56:08) Lessons from breaking down Rolls-Royce