Vivendi (XPAR:VIV) is a French media conglomerate whose crown jewel is Universal Music Group (UMG), the world’s leading record label. UMG is a major beneficiary of the global trend toward consumption of music via internet streaming services such as Spotify and Apple Music, and as this trend gathers pace, we believe UMG’s growth will make Vivendi an increasingly attractive business. Vivendi is controlled by Vincent Bollore, a renowned investor who we expect to support UMG’s growth while also maximizing the value of Vivendi’s other assets. We believe we paid less than 19 times Vivendi’s profits, and we expect the growth rate of those profits to accelerate from the high single digits into the double digits over the next several years as UMG becomes a larger contributor to Vivendi’s overall earnings.
From Ruane Cunniff (Trades, Portfolio)'s first quarter 2018 shareholder commentary.
