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spk03: through the first nine months of the year. So they're already about to hit their guidance, and they've got, what, two months left of the year. So they're doing really well, and you're going to see some really nice, surprisingly large new logos added over the next, call it 60 days. They've signed them. They were not able to announce them just yet, but it just shows that they're just continuing to sop up all the Fortune 100 companies and make them customers. We're very excited about it. Did you want to talk about Sightline?
spk06: Sure. Sightline continues to make progress in their core segment, which is cashless gaming. They're currently working with Resorts World in Las Vegas to kind of put their flagship end-to-end cashless gaming system in place, and hopefully by the end of the year they'll be in a position to start to retest that. Another good news, J.P. Morgan Payments made a strategic investment in the business that came in at a premium to the value we invested in. So it's more liquidity for the company, a great stamp of approval from an A-tier strategic partner. So we hope more good things are to come.
spk03: Thanks. Thanks, Duke. So the only other thing, we had a couple of new investments that we've announced. One of them is computer services of Glorious Paducah, Kentucky, a company that I've known since I was a young man, which has been some time. And they do core processing for small banks and credit unions, and I'm talking like sub-billion dollar asset banks. It's an unbelievably durable customer segment. And these guys pretty much, you know, I wouldn't say they own it, but they've got a great big market share. And Frank Martieri, who, as you both know, as you all know probably, you know, has an incredible track record both at Medivante and then after Medivante was acquired by FIS, he became the CEO – executive chairman, chairman of FIS for decades. And he's bringing his team to bear to grow that business. He's got great plans. And we have all kinds of optimism about multiples of our money. It's kind of a three, you know, looking at their numbers, you know, with an exit at the same multiple that you're buying it, you're looking at kind of a three times your money and You know, five years, you might get lucky. There might be a buyer that comes earlier, but we really like the business. It generates cash. It's right up our alley. We all know this area very well, bank technology. And then we, as you probably know, we committed $125.7 billion for a 50.1% ownership in an English Premier League football club called AFC Bournemouth, and Many of you have asked us, you're technology guys, why did you do a team? And the short answer is, this is a Bill Foley company. Bill started a hockey team from scratch five years ago, and he's been offered valuations of about four times more the original equity investment. I'm lucky to have been one of those. And we believe Bill and his team can work the same magic with Bournemouth. It is way under investment in facilities and sponsorships and gear sales, media rights, all the stuff that Bill and his team at the VGKs, at the Vegas Golden Knights, have have really knocked it out of the park. I mean, they're at the top of the NHL in virtually every revenue category. So we think that they're going to apply the – Bill's already got plans for how he's going to grow the business side of this. So we think – I mean, I asked to invest in this deal. I asked on behalf of Kenai because I think we're going to make three or four times our money at a minimum over the next five to seven years. So with that, I think that covered, unless you all have something, I think that covered all the major stuff for the quarter, and we'll turn it over to Q&A if you're ready for that, Ms. Operator.
spk04: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Chris Sakai with Singular Research. Please go ahead.
spk05: Hi, Chris.
spk02: Hi, good afternoon. Just wanted to know, so you've got a bunch of cash from the Amerilife sale plus $249 million on the balance sheet. So what are you guys planning on doing with that? Just buying back more shares?
spk03: Yes. You know, I'd say there are three options for us. And they're going to be sort of real-time decisions. as we are going to be relatively aggressively buying back our shares as we have with the cash that we have, as long as the discount is in the 40-plus percent range, probably the 30-plus percent range. It's just really cheap, and it's probably the best return that we can get with our capital right now is just to buy back our own shares at this huge discount to NAV. But we're also supposed to be in the business of finding new investments, and we have a pretty robust pipeline of things. There's nothing that's going to happen today, but we could use some of that capital for new investments. And one of the things that Bill has us doing is finding ways to bring in third-party capital to get a deal done, so as to preserve more of Kaniyia's capital on a deal-by-deal basis. So we've got some help, and we're looking through that prospect. And then third, there is a chance that our existing, I'd say the two portfolio companies that may need some future money, Computer Services, the Paducah, Kentucky core processor company, They're fairly levered, but they have a pretty robust shopping list, and I expect that we'll get an opportunity. And we have right of first refusal on new capital raises out of that partnership. I expect we'll get a chance to throw a little bit of capital into that. I don't know if it would be a lot, you know, 20s and 30s is probably what we're we're talking about, but we'd like to increase our exposure. It's only 84 million today in the core business. And then the other would be Sightline sometime down the road. Dukes would know more about that than I do. So those would be the three, and maybe we've got some other needs for other portfolio companies, but I'd say top of the list is buying back our shares. and continuing to look for opportunities to do better than buying back our shares, but we hadn't found one yet.
spk02: Okay. All right. Thanks for that. And then where are you guys seeing better valuations now in private or public equity?
spk05: Public, without a doubt. Okay. Without a doubt.
spk02: And then last for me, how long was this – The soccer team investment in the works, how long had that been going on discussions before?
spk03: Oh, you know, Bill and a couple of our guys, Ryan Caswell and Alex Cianello, we were approached a year and a half ago by a fellow who wanted to pull a multi-club team together And it was exciting to Bill, and he did a lot of his own homework on it. And I think in the process, one of the, you know, I think Bill's interest was known, and Bournemouth became available because the current owner, shall we say, you know, had potential sanctions issues and wanted to go to cash in pretty much everything that he has and go somewhere else, too. We got a bargain on that, and that's how it happened. So I'd say the past 15 months. It's not spontaneous, if that's the question. It was not a – this is something that Bill put a lot of thought into. And the most important part was the recognition that most of the business lines operate – they operate very much like the business lines in an NHL team. Concessions, tickets, you know, alcohol sales, sponsorships, jerseys and other gear, stuff like that. And he felt like he could master that. And then, you know, he'll learn. He's got management over there, very skilled management that know the player part. The player and how do you win games and how do you stay in the Premier League. And I think he's, in fact, had the team over here lately just to talk about how to fill the holes in management on that part of the operations. But he's going to bring his people to bear on helping build the business side, the business revenue. I call it business. It's just like the non-player revenues.
spk02: Right. Okay, sounds good.
spk05: Thanks for the answer. Sure, thanks.
spk04: As a reminder, if you would like to ask a question, please press star then 1 to be joined into the question queue. The next question comes from Kenneth Lee with RBC Capital Markets. Please go ahead.
spk01: Hey, good afternoon. Thanks for taking my question. Just one on the – the AFC Bournemouth, and pardon me if I've been jumping around on the calls, but I wonder if you could just talk a little bit more about how the mechanics and the economics could flow to Kenai. And then in terms of the $126 million commitment, Is there any kind of obligation in terms of future player transfers, any kind of investments in infrastructure within Bournemouth in terms of the stadium and things of that nature? I just want to get a better sense of the financial commitment there. Got it.
spk03: Good question. So we have a hard commitment for $125.7 whatever it is, million dollars. It's 120 million pounds. I don't know what it is, 110 million pounds. Mm-hmm. And that's it. We have no future obligations. In fact, we overfunded it. So the maximum of our investment is 125. It could very much be lower because there's about 33 million of, and I know I'm probably getting my dollars and pounds mixed up, but there's about 33 million of extra capital after you build a facility. After you pay, there's an earn-out in the deal where if they stay in the Premier League, we owe them 20 million pounds. That's the seller, 20 million pounds if they stay in next year. There is a stadium. Bill wants to own and develop the stadium. They have a very, very poor, small stadium, and he wants to improve it and sell more tickets, of course, and all that stuff. And there is a pretty healthy, very, very adequate player transfer budget for the next year or two in that. And the fact is this business cash flows. So this isn't like a lot of the ones that you'll look at that have just deep, deep holes and, you know, that just dig deep cash holes. So I believe that $125 is the most we're going to do, and it could be less. Now, our investment is as a limited partner. Bill is the general partner. We do not pay him any fees. He does not earn any fees as a managing general partner. He's kind enough to do that. He does not get... any kind of promote from the money that we raised, that we committed to the team. And we'll make a return when, you know, we'll make the same return that he makes. So we are totally aligned with Bill in that transaction. I hope that answers your question.
spk01: Absolutely, absolutely. Very helpful there. And then switching gears, just one follow-up, if I may. You talked about potentially bringing in third-party capital when you're looking around for potential new investments. Just wanted to get a little bit more color around, you know, what kind of form that could take.
spk03: Oh, you know, of course it's somewhat – nebulous now because we don't have a hard it's abstract because we don't have a hard a hard deal to talk to you about but just say you know we're talking about a a deal where the total equity and it's probably an lbo the total equity would be um uh we know we could be buying a private company but we could also go do an lbo the total uh check with enterprise value could be you know, a billion, billion two, billion four. We don't want to put too much leverage on a business, so call it three times. So, you know, we'd need to raise seven or eight million, seven or eight hundred million, sorry, maybe more than that, maybe up to nine hundred. And Kenai would do, call it a hundred, and then we would raise the other eight hundred. The form is called a special purpose vehicle. They're not uncommon out there in the world today. We just haven't pursued it as an alternative. But we're going to miss some deals because we don't have enough capital. And what we want to do is to go raise the capital third party so we get some good deals.
spk05: Gotcha. Gotcha. Very helpful there.
spk01: Thanks again.
spk05: Sure. Thanks, Ken.
spk04: The next question comes from John Campbell with Steven.
spk03: Please go ahead. Hey, John.
spk00: Hey, this is AJ Hay stepping in for John today.
spk03: Oh, yeah, we thought, you know, yeah, well, you bait and switched us.
spk00: Apologies about that.
spk03: Hey, AJ. No, we're just messing with you. We'd rather talk to you anyway.
spk00: Perfect. Good deal. Well, thank you for taking our questions. So you guys slightly touched on Sightline, but can you add some color on the benefits Sightline may realize as a result of the strategic relationship with J.P. Morgan Payments? And then can you maybe add some update on the Sightline's fundamentals and then maybe how you're thinking about monetization of Sightline long-term?
spk06: Sure. Let me answer these in order. So the strategic partnership with J.P. Morgan is incredible. They put a representative on the board. They're both a huge partner with the payment network, so in helping us with our approval issues with Visa and MasterCard, we think they can give us some important strategic advice to help get approval rates up. I think they can help us more efficiently design our network. They obviously have access to an incredible customer base in their own right. So I think the opportunity for the partnership with J.P. Morgan affords a growing payments company like Sightline are virtually unlimited. It's really unlocking both their intellectual capital and just breadth of network access. I think it can do wonders for Sightline's business. When you talk about the fundamentals of the business, I'd say – Online gaming has been a little bit challenged this quarter. I think with the demise of the $2,000 free sign-up credits from the casinos, you've seen overall volumes kind of stagnate and in some cases even drop. So Sightline's not immune from those trends. That being said, their core business is really developing the cashless solution inside the casino, and that's what's going to differentiate them long-term from their competitors. From our perspective, I don't think a monetization of this business is – near-term in the next couple of quarters. I think we really want to see them execute in Resorts World. I think we want to see them get picked up in another large casino empire, whether it be Caesars or MGM, and really see the acceleration of that cashless solution. And I think once we have both confidence that they're on that S-curve of adoption and we have year-over-year comparables so we can make predictable earnings estimates to the street, I think that's the time to potentially explore what's next for this company, whether it be IPO or sale or whether an strategic alternative is. But my guess is we're probably at least a year away from an event like that.
spk00: Okay. And then you kind of touched on the near-term trends in the sports betting arena, but can you maybe provide an update on your bigger picture thesis for that space and why you continue to find it so attractive?
spk06: Continue to find it attractive? We believe that the liberalization of gaming markets is a matter of when, not if. The trends have all pointed to yes, that the timing has sometimes been in fits and starts, but we think that where this is headed is... It's kind of beyond a doubt. We know what the future holds, and we're just ready to ride that wave as it continues to unfold.
spk03: What are the big new states, Duke, out there that you think are going to be opening up?
spk06: Michigan's opening up. New York's opened up. New Jersey's obviously opened up. Nevada was always opened up.
spk03: Massachusetts has or not?
spk06: Massachusetts has. I think if you get some movement in California, Texas, Florida, that obviously will be game-changing for the industry. But even with the states that have legalized now, just continued growth and adoption and continued user sign-ups, it's still growing, even without the free money out there. But the pulling of the proverbial punch bowl away, I think, caused at least a pause for a quarter or two in the rapid acceleration of the growth in that industry. But it's still posed to be... a $50 billion industry by 2025.
spk03: When I go look at DraftKings, I'm sorry, I'm hijacking your call. When I go look at DraftKings, they're trading back down to their SPAC level, like $11, $10. Is that because people have pulled back all these incentives and they're just not growing?
spk06: It's a combination of slowdown in the top line, and I think for some of these names specifically, there may be a liquidity concern. I don't think that we don't have that issue at our business. Obviously, we're private and have great partners around the table, including one of the largest banks on the planet. But we do still live in the same macro environment as those guys.
spk03: Okay, thanks. Sorry about that.
spk06: We're a little bit better managing our P&L, though, we hope. Hope so.
spk00: Great. Really appreciate the color there. Last question, just at a high level, should we be viewing the wind-down of Austerlitz 1 and 2 as the last of the SPAC activity for Kenai?
spk03: You know, I would never say never, but we do not have any plans. But we believe that the SPAC could be – they're not properly structured now, but they could be. And it could be a great alternative to an IPO for some companies. And because of the size and the quality of the amount of secondary sales that you can get, you can't do those in traditional IPOs. And you can't do, you know, you might do 10% of the company in an IPO, and you could do a lot more of that. So there are vehicles that have a use and that are valuable. It got just terribly abused recently. And, you know, we – it's going to take a while before there's a market again for those. And I don't want to say we'll never pursue them again, but I'd say right now I don't see it on the horizon.
spk00: Okay, gotcha. Congrats on the quarter, and thank you.
spk05: Thank you.
spk04: This concludes our question and answer session. I would like to turn the conference back over to Rick Massey for any closing remarks.
spk03: Actually, this is David Ducamin is going to finish this up.
spk06: Thank you, operator, and thanks for everyone who joined our call today. We remain focused and excited that we exited the third quarter in a strong position, and we look forward to the continued opportunities that we see ahead. Along those lines, we want to invite you to three upcoming events. We're going to be at the Stevens Conference this month, November 15th and 16th. We're going to be at the Credit Suisse Conference in Phoenix, end of the month, November 29th and 30th. And we all hope you'll come join us for Kenai's annual portfolio conference on December 14th and 15th in the Wynn Las Vegas. Thank you again, and we look to see you at one of our future events.
spk05: Thanks, everybody. Have a good week.
spk04: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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