Knowland Technology Holdings (as per Advantage Data but named Knowland Group by its only BDC lender – Saratoga Investment or SAR ) “is a web-based software company that provides business development products and services to the hospitality industry”. The company has its own Wikipedia page. The company, which bills itself as “the world’s leading provider of data-as-a-service insights on meetings and events for hospitality” waxes optimistically about a rebound in corporate gatherings, as this article from hospitality.net suggests.
Judging, though by SAR’s recent valuations of its second lien debt to this privately held company with nearly 200 employees, the investment made seems to be underperforming. According to Advantage Data’s records, the company has been underperforming – not surprisingly – since the IIQ 2020. As of November 2021, the debt – which matures in 2024 and yields 11.0% including a 1% PIK element – has a cost of $15.8mn and a FMV of $10.4mn. That’s a (34%) discount, and given both the nature of the business in these pandemic affected times and the amount of the discount, worrying. By the way, the August 2021 valuation was $10.8mn, so the valuation trend is down as the little red arrow accompanying this article indicates.
We rate the company CCR 4, with the possibility that $1.7mn of annual investment income might be interrupted. Much more info we cannot offer as SAR has not said anything about the company and the public record is not eye opening either. We have no reason at this time to expect any great change coming in SAR’s next valuation, except that the onset of omicron might be a depressant. We’ll circle back when we get any news or at the next SAR earnings release in April 2022.