TIP833: PERIMETER SOLUTIONS (PRM): A NICHE MONOPOLY, ONE ACQUISITION AT A TIME

W/ KYLE GRIEVE & SHAWN O’MALLEY

TIP833: PERIMETER SOLUTIONS (PRM): A NICHE MONOPOLY, ONE ACQUISITION AT A TIME W/ KYLE GRIEVE & SHAWN O’MALLEY

23 July 2026

In today’s episode, Kyle Grieve and Shawn O’Malley analyze Perimeter Solutions, a niche industrial conglomerate built by Transdigm’s legendary founder Nick Howley using the same playbook that turned Transdigm into a multi-decade compounder. They break down how the company operates two very different segments, from wildfire retardants and airbase logistics to specialty chemicals and precision medical manufacturing equipment, each built around sticky, mission-critical customer relationships. They’ll also cover the company’s acquisition strategy, its unusual founder’s advisory fee, and the debt and litigation risks that complicate an otherwise compelling capital allocation story.

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IN THIS EPISODE, YOU’LL LEARN:

  • Why the Transdigm playbook is worth cloning
  • How this management team built a public compounding machine
  • Why one segment profits directly from worsening wildfires
  • The chemical monopoly hiding inside a boring business
  • What makes these niche products nearly impossible to replace
  • How disciplined acquisitions have created so much shareholder value
  • The controversial fee structure investors aren’t big fans of
  • And so much more!

Disclosure: This episode and the resources on this page are for informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. For full disclosures, see link.

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:03] Shawn O’Malley: Before we get started on this business today, I think I need an explanation.

[00:00:07] Kyle Grieve: Uh oh, that’s never a good way to start an episode.

[00:00:10] Shawn O’Malley: So you know exactly how I feel about dilution. And this business pays fees to its founders, similar to what you’d find in a two and twenty hedge fund structure just for the privilege of owning the stock. So what gives?

[00:00:21] Kyle Grieve: Yeah, I mean, probably because the guy collecting that fee is the same guy who turned Transdigm into a compounder that outperformed the market for a couple of decades.

[00:00:33] Intro: Since 2014, with more than 200 million downloads, we have interviewed the world’s best investors, studied deeply the principles of value investing, and uncovered many compelling investment opportunities. We focus on understanding businesses and intrinsic value, investing accordingly, and sharing everything we learn with you. This show is not investment advice. It’s intended for informational and entertainment purposes only. All opinions expressed by hosts and guests are solely their own, and they may have investments in the securities discussed. Now, for your hosts, Shawn O’Malley and Kyle Grieve.

[00:01:19] Shawn O’Malley: We have discussed many holding companies on this show, and we own a few of them in our intrinsic value portfolio businesses like Exor, and LIFCO. But, you know, you can make the argument that Amazon, Berkshire and Google are holding companies as well, just with massive, massive business units and trillion dollar market caps. And any way you look at it, we clearly think holding companies can be good businesses as long as they’re anchored by high quality assets that generate cash consistently with top notch management teams allocating capital. And so when it comes to Exor the main reason we own that holding company in the portfolio is because of its Ferrari stake.

[00:01:58] Shawn O’Malley: And so even though the other assets are just okay, the Ferrari position is again the real reason we own it. We get to own Ferrari shares at really a very steep discount relative to what it would cost to own the shares directly with the ticker RACE. But Kyle, I know you’re a big fan of serial acquirers, which is why we also now own Lifco and one business we don’t own. However, that is probably one of the best examples of what we’ve been talking about because its founder, Nicholas Howley, was wildly successful with Transdigm and also with a company known as Perimeter Solutions.

[00:02:35] Kyle Grieve: And Nick Howley is really only the start of Perimeter Solutions superstar board and executive team. This team also includes the likes of William Thorndike, who wrote the exceptional book that. I know that you’re a big fan of The Outsiders, and he’s actually also a really good investor himself, with a net worth of a few hundred million dollars, much of that invested specifically into the business that we’ll be covering today. Perimeter solutions.

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