The GDP print shaped up better than expected, gaining 0.2% M/M versus estimates of 0.1%…

… led by goods-producing industries, which added 0.6% and carried more muted 0.1% growth in services.

At the industry level, gains were broad-based with the exception of retail trade - which we saw evidence of with the weak retail sales print last week.

Of particular note is the continued recovery in real estate, with home resale activity driving the fourth straight sequential gain after a tough start to the year…

… and in manufacturing, which rebounded in July but remains volatile…

… with preliminary estimates for August pointing to a down month in the category, which should offset gains in wholesale and retail trade to drive flat GDP.

dentalcorp (DNTL) ran over 30% on its announced $2.2B take-private transaction led by private equity group GTCR. At $11 per share, the deal prices DNTL at over 10x NTM EBITDA - well above recent trading…

… but materially lower than its $14 IPO price in 2021 and secondary offering at ~$16 the following year.

It’s not all that surprising to see Canada’s largest dental network go here, given recent management commentary…

… and its shift from M&A fueled growth…

… to leverage reduction.

In private hands, DNTL will trim fat to capture the benefits of scale public markets helped build - but it may not be the last time we see these assets. Returns look skinny in the pure-play dental roll-up model…

… but they could be improved as part of a broader health platform. Given GTCR took a minority stake in Telus Health recently, it could try to facilitate a deal ahead of an IPO. Unlikely, but possible.

Lots has been said about the gutting of Canadian markets, but the shrinking pool of public companies isn’t without reason…

There’s a long list of quality companies not getting “fair value”, and private market investors willing to play the long game are more than happy to pay up.

Pollard (PBL) ran 10% on the back of a contract win with The California Lottery, which saw its role upgraded from secondary to primary contractor for scratch tickets. At ~1B tickets printed per year, PBL’s ~70% share should add $5-10M annually…

… but more importantly, it continues the momentum after its $290M win in Belgium - as the company looks to win back investors.

Spin Master (TOY) fell 7% after management caution at a CIBC conference, with the new CFO highlighting tariffs are pushing revenue out due to changes in shipping…

… prompting downward estimates revisions from analysts. It’s been a challenging year for the company, with the disruption in trade pressuring margins and returns…

… but the delay in revenue recognition is logistics-related, not demand. Should sales catch up as anticipated, the market could warm up to TOY again - with lots of upside if they can deliver.

Flagging the buying at Constellation Software (CSU), which follows a relatively uneventful breakdown of AI’s impact on the business and Mark Leonard’s health-related resignation - two events that have fueled CSU’s largest drawdown ever.

Between these transactions and a conference call to discuss the leadership transition this week, CSU is likely to find a near-term floor here.

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