## Cannae Holdings Charts a Deliberate Path to Value Creation Through Capital Returns and Portfolio Evolution

Cannae Holdings, Inc. (NYSE: CNNE) is executing a structured approach to drive shareholder returns and close its trading discount, the investment company confirmed this week while responding to activist pressure. The company's multi-pronged strategy centers on three core levers: systematically returning capital to shareholders, rebalancing its portfolio away from publicly-traded assets toward cash-generating private investments, and actively improving the operational performance of its portfolio companies.

Under the leadership of CEO William P. Foley II—who took the helm in February 2024—Cannae has moved aggressively on each front. Since March 2021, the company has returned $738 million to shareholders through repurchases of approximately 35% of its outstanding shares. This capital discipline reflects management's conviction about the company's intrinsic value relative to its trading price.

### Capital Return Accelerates Throughout 2024

The pace of shareholder distributions intensified during 2024. In April, Cannae executed a Dutch auction tender offer, repurchasing 9.67 million shares at $22.95 per share—representing 13.4% of shares outstanding and totaling $222 million in cash returned. Separately, the company initiated a quarterly dividend program with $0.12 per share distributions, generating approximately $7.6 million per quarter or $23 million annualized.

Cannae retains approximately 12.3 million shares under its current buyback authorization, signaling continued commitment to capital returns as opportunities arise. The company plans to accelerate these distributions by deploying proceeds from ongoing public equity realizations.

### Portfolio Repositioning Generates Substantial Liquidity

Over the past 12 months, Cannae has systematically harvested positions in public markets, raising roughly $470 million through selective share sales. These moves serve dual purposes: generating capital for shareholder returns while repositioning the portfolio toward private assets with more predictable cash flows.

Key realizations in 2024 included the final exit from Dayforce, where Cannae sold its remaining 4 million shares for $264 million. Since Dayforce's 2018 IPO, this investment has generated over $2.8 billion in cumulative proceeds—representing a return exceeding 5x invested capital. Additional liquidity came from $101 million generated by reducing its Dun & Bradstreet position by 10 million shares (with $21 million in tax benefits) and $89 million from December's sale of 12 million Alight shares ($7 million in tax savings).

### Shifting Into Private Assets With Embedded Value

The capital raised from public market exits has been strategically redeployed into private investments offering stronger cash generation profiles. In February 2024, Cannae invested $56 million to acquire a 20% stake in JANA Partners' management company and general partner interests, while committing additional capital to select JANA funds. Over JANA's 24-year track record as an engaged investor, the partnership has already begun generating cash distributions to Cannae.

More recently, Cannae acquired a 53% controlling stake in the Watkins Company for $80 million—a 157-year-old flavoring and specialty ingredients business with expanding margins and solid cash generation. The company structured the investment alongside investment partner KDSA and the prior majority owner, who retained a 40% equity stake, aligning incentives toward long-term value creation.

### Operational Improvements Driving Enterprise Value

Beyond capital allocation decisions, Cannae works directly with portfolio company management teams to unlock operational performance. At Dun & Bradstreet, collaborative efforts on strategic initiatives have pushed EBITDA from $569 million in 2018 to $927 million in 2024—a 63% expansion reflecting margin improvement and revenue acceleration. The current focus involves reaching 5-7% organic growth targets and enhanced cash conversion, factors critical to multiple expansion in private equity valuations.

Alight Solutions provides another case study in operational partnership. Cannae's collaboration with management culminated in the $1.2 billion sale of the Professional Services segment and Payroll & HCM Outsourcing businesses in July 2024. The proceeds enabled Alight to retire $740 million of debt, return $75 million via buybacks, and launch quarterly dividends—meaningfully improving the company's financial flexibility and stakeholder returns.

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Computer Services Inc. continues generating strong returns, having already returned $37 million (43% of initial investment) within approximately one year. The remaining equity stake trades at valuations approximating 103% of the aggregate capital deployed, signaling the underlying business momentum.

### Strategic Rationale and Shareholder Alignment

Management's strategy directly addresses Cannae's persistent share price discount to net asset value (NAV). By distributing capital, rebalancing toward private assets, and driving operational improvements, the company aims to narrow this discount while delivering substantive long-term returns. Foley emphasized: "Our Board of Directors and management team remain dedicated to driving long-term value creation. We remain optimistic on the outlook for our portfolio companies and their significant embedded value."

Notably, Cannae's board and management collectively hold 11% of outstanding shares, creating meaningful personal alignment with shareholder interests—a factor often absent in activist disputes.

### Looking Ahead

Cannae expects to return material capital upon realization of remaining public company investments, including through one or more additional tender offers. The company wound down its external management agreement with Trasimene Capital Management, internalizing all investment functions and aligning executive compensation primarily toward Cannae stock ownership—reducing conflicts of interest and operational costs simultaneously.

The company indicated it would present its board recommendations in a definitive proxy statement filed with the SEC ahead of the 2025 Annual Meeting. Shareholders are not required to take action at this time, though the company encourages careful review of proxy materials when available.

Cannae's playbook—combining disciplined capital returns, strategic rebalancing, and hands-on operational involvement—reflects a deliberate philosophy: long-term ownership with governance control enables sustained value creation far exceeding activist timelines or external management approaches.