Local and global investors alike are eager to tap into demand for nearshoring from U.S. and Canadian businesses, which remains high. Investors are also starting to back companies that serve local markets. 

In this episode of Deal Talk with 7MA, host Ben Bruggeworth talks with 7MA colleagues Horacio Yenaropulos and Daniel Siller, both managing directors at 7MA. 

Investors are “looking for nearshoring advantages and for good businesses with good capabilities inside the region,” says Horacio. Horacio and Daniel explain why investors are so excited about Latin America, the factors affecting supply and demand, and how they expect the growth of private equity in the region to play out. 

Investor interest has increased following the pandemic, and both Horacio and Daniel expect it to grow further as the region develops the language and technology skills that U.S. and Canadian companies desire. 

They warn, though, that founders and owners should expect lower valuations and increased scrutiny during due diligence as investors look more closely at business fundamentals than they did over the past couple of years. Daniel also notes that governments in the region need to clarify legal and legislative issues that impede investor confidence. 

Regardless, Horacio and Daniel are both confident that the future for the region is bright. “It’s a nascent region with nascent private equity,” Daniel says, “I think that over time, a lot of the larger and midsize players will start to look at the region as a great place to invest.” 

💡 Featured on the Episode 💡

Name: Daniel Siller

What he does: Daniel is a Managing Director with 7 Mile Advisors based in Boston, Massachusetts. Across more than 25 years of experience in investment banking, he has closed over $35 billion in equity raises and $50 billion in M&A transactions. Daniel, who is fluent in English, Spanish, and French, previously worked at several banks including Credit Suisse, Lazard, Morgan Stanley, and Goldman Sachs.

Organization: 7 Mile Advisors

Words of wisdom: “There are many years, if not decades, of potential growth in Latin America.”

Connect: LinkedIn 

Name: Horacio Yenaropulos

What he does: Based in Mendoza, Argentina, Horacio is a Managing Director with 7 Mile Advisors and leads the Latin America sector coverage team. He has 25 years of financial experience and previously worked with Globant’s corporate development group, where his responsibilities ranged from due diligence to SPA closing. He’s also held financial leadership positions with several key Latin American companies, including PricewaterhouseCoopers, Hidronor Chile, Viña San Pedro Wine Group, and Belatrix Software. 

Organization: 7 Mile Advisors

Words of wisdom: “A lot of good things are going to continue happening in this market.” 

Connect: LinkedIn 

Name: Ben Bruggeworth

What he does: Ben is a Vice President at 7 Mile Advisors based in Atlanta, Georgia. He previously served as an associate on the M&A team at Harris Computer and spearheaded business development at Caymus Equity Partners. Ben, who has five years of financial experience, was a scholarship athlete in soccer and football at Wofford College. 

Organization: 7 Mile Advisors

Connect: LinkedIn 

Connect with 7 Mile Advisors

☑️ For a custom valuation assessment using 7 Mile’s five pillars of strategic value, contact Nic Anderko at [email protected]

☑️ Follow us on LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Spotify, Google Podcasts, or anywhere you get your podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at [email protected] 

Deal Talk with 7MA, a podcast by 7 Mile Advisors that aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.

“We at 7 Mile Advisors are serving companies who are helping businesses procure and use technology in an effort to develop, capture, connect, move, store, compute, and secure data,” explains Founding Partner Tripp Davis, of his work at 7MA. 

On this episode of Deal Talk with 7MA, host Ben Bruggeworth talks with 7MA colleagues Tripp Davis, a Founding Partner, and Tim Frye, a Managing Director, about the Managed Services Providers (MSPs) space and what they ultimately foresee happening in the market. 

Since 2008, 7 Mile Advisors has been an investment bank solely focused on technology services as a sector-centric bank. They drill into the marketplace in specific sub sectors to map landscapes and identify key businesses that they can serve via M&A, private capital raising, and strategic growth advice.

The MSP sector is an area in which 7MA spends a lot of time. Due to the velocity and complexity of technology environments, it’s a fast-growing market. Tripp and Tim share their own experiences and what they see as this market continues to evolve and businesses continue to get more specialized help from MSPs. 

Tune in to hear Tripp and Tim talk about their experiences in MSPs, the future of M&As in this sector, and their dedication to vertical growth in the market.

💡 Featured on the Episode 💡

Name: Tripp Davis

What he does: In addition to being one of the Founding Partners of 7 Mile Advisors, Tripp Davis has more than 20 years of investment banking and advisory experience. 

Organization: 7 Mile Advisors

Words of wisdom: “As investment bankers, we are looking to help sellers, boards of directors, and private equity groups grow value and, ultimately, unlock that through a successful M&A transaction.”

Connect: LinkedIn  

Name: Tim Frye

What he does: Tim is a Managing Director at 7 Mile Advisors with a background in tech-enabled business services. He brings a wealth of industry experience and perspective to M&A transactions.

Organization: 7 Mile Advisors

Words of wisdom: “The core driver of value in all the processes that 7 Mile runs with MSPs has been recurring revenue. We have a saying, internally, that recurring revenue is king.”

Connect: LinkedIn  

Name: Ben Bruggeworth

What he does: Ben is a Vice President in Business Development at 7 Mile Advisors. 

Organization: 7 Mile Advisors

Words of wisdom: “As we think about the buyer universe, we've seen a number of private equity groups across the country make investments within the MSP space.”

Connect: LinkedIn

Connect with 7 Mile Advisors

☑️ For a custom valuation assessment using 7 Mile’s five pillars of strategic value, contact Lexi Papa at [email protected].

☑️ Follow us on LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Spotify, Google Podcasts, or anywhere you get your podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at [email protected].

Deal Talk with 7MA, a podcast by 7 Mile Advisors that aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.

7MA’s Sydney Scadden, Nic Anderle, and Tyler Ratterree all have one significant thing in common - they sought internships to propel their careers. 

While in college, Nic had two internships  - one at RSM, which gave him great hands-on accounting experience, and another at Copper Run, which ultimately swayed him to pursue an investment banking career path. 

With a plethora of internship experiences under his belt -  in everything from commercial banks and their loan servicing departments to working in his college’s admissions department - it took Tyler more time to discover his interest in investment banking. In fact, it wasn’t until his internship at PwC during graduate school that he found his calling in deal processes. 

For many, like Sydney, the ultimate goal of an internship is to have the role transition into or lead to a full-time job, which is exactly what she achieved. Sydney was a summer intern analyst at 7MA before being hired as an employee. She went from setting up phone calls and meetings as an intern to leading the deals she had once watched unfold.

On this episode of Deal Talk with 7MA, host Steve Sypek talks with three of 7MA’s finest about their personal internship experiences, the benefits of internships in general, and how 7MA’s own internship program can help young professionals hoping to break into the world of investment banking.

💡 Featured on the Episode 💡

Name: Sydney Scadden

What she does: Once an intern at 7 Mile Advisors, Sydney is now a Vice President. Sydney offers project execution, data analysis, and business development expertise and has contributed to the success of more than 25 deals within the IT Services and Tech-enabled sectors since she joined 7MA in 2018. 

Connect: LinkedIn  

Name: Nic Anderle 

What he does: Nic is an Internship Program Coordinator and Associate at 7 Mile Advisors with M&A and accounting experience. Before joining the team at 7MA, Nic was an Investment Banking Analyst Intern at Copper Run Capital, which is an M&A advisory firm focused on the lower-middle market.

Connect: LinkedIn 

Name: Tyler Ratterree

What he does: Tyler is an Internship Program Coordinator and Associate at 7 Mile Advisors with finance, accounting, and macroeconomics experience. Prior to working at 7MA, Tyler served as a deals consultant for PwC, which focuses on capital markets and accounting advisory services.

Connect: LinkedIn 

Name: Steve Sypek 

What he does: Based in Nashville, Tennessee, Steve is the Senior Vice President at 7 Mile Advisors. He has 9 years of international relationship management and business development experience. 

Connect: LinkedIn

Connect with 7 Mile Advisors

☑️ For a custom valuation assessment using 7 Mile’s five pillars of strategic value, contact Lexi Papa at [email protected].

☑️ Follow us on LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Spotify, Google Podcasts, or anywhere you get your podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at [email protected].

Deal Talk with 7MA, a podcast by 7 Mile Advisors that aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.

Happy New Year and thank you for joining us in our first 2023 episode of Deal Talk with 7MA. 

In today’s episode, 7 Mile’s co-founders Leroy Davis, Andy Johnston, and Tripp Davis join Steve Sypek to reflect on the eventful period in the M&A world over the past couple years.

They recount coming off a historic year in 2021, where M&A activity in the technology services space and the broader market was at all time highs. They discuss some challenges that 2022 introduced that they may not have expected heading into the year. They analyze the impact of geo-political events such as Russia’s attacks on Ukraine and the Fed sparking further caution as they aggressively drove interest rates higher following a prolonged period of near zero rates. 

Throughout the episode, they provide insight into how 7 Mile Advisors responded to these events and what they see on the horizon for the IT Services Industry in the M&A world.

💡 Featured on the Episode 💡

Name: Andy Johnston

What he does: Andy is a Partner and Co-founder of 7 Mile Advisors. He has advised on more than 50 business services and digital transformation transactions, including deals with Deloitte, Accenture, Valtech, and multiple private equity funds. He received his bachelor’s degree from Duke University and is a Certified CFA with the Chartered Financial Analyst Institute. Outside of work, Andy enjoys sailing, traveling, and spending time with his family.  

Organization: 7 Mile Advisors

Connect: LinkedIn

Name: Leroy Davis

What he does: Leroy is a Partner and Co-founder of 7 Mile Advisors with 25 years of investment banking experience. He has managed transactions in the Technology, Consumer, Insurance, Healthcare & Infrastructure sectors. He began his career with Coopers & Lybrand and is a member of the AICPA. He received his bachelor’s degree from Hampden-Sydney College and his MBA from Wake Forest University.  

Organization: 7 Mile Advisors

Connect: LinkedIn

Name: Tripp Davis 

What he does: Tripp is a Partner at 7 Mile Advisors with 20 years of investment banking and advisory experience. He joined 7 Mile Advisors from Hyde Park Capital Partners, where he served as head of the Business Services, Technology and Communications group while advising companies in a variety of industries on M&A and capital raising assignments. He received his bachelor’s degree from Hampden-Sydney College and Post-graduate studies at Florida State University.

Organization: 7 Mile Advisors

Connect: LinkedIn

Name: Steve Sypek 

What he does: Steve is a Senior Vice President at 7 Mile Advisors with 9 years of international relationship management and business development experience. He previously worked for Wellington Management in Boston before moving to London to help grow their Global Wealth Management business, which included several successful Private Equity raises. He received his bachelor’s degree from Boston College. He is a CFA Charterholder with his CPA license in Massachusetts. Outside of work, Steve is an avid Boston Bruins fan who enjoys spending his time playing hockey and golf. 

Organization: 7 Mile Advisors

Connect: LinkedIn 

Connect with 7 Mile Advisors

☑️ For a custom valuation assessment using 7 Mile’s five pillars of strategic value, contact Lexi Papa at [email protected].

☑️ Follow us on LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Spotify, Google Podcasts, or anywhere you get your podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at [email protected].

Deal Talk with 7MA, a podcast by 7 Mile Advisors that aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.

After attending the HIMSS Global Health Conference & Exhibition, Andy Johnston and Ben Garber have insight into the top industry trends as they relate to digital transformation. According to Andy and Ben, healthcare providers and digital service companies are increasingly coming together to shape a more interconnected data environment.

The focus on cybersecurity initiatives was an emerging topic of particular interest. As companies embrace digital and move their data to the cloud, the danger of cyber threats increases dramatically. While cybersecurity solutions are developing rapidly, it’s difficult to keep pace with data exposure risks. That’s why it’s vital to not only focus on your digital transformation solutions, but also on diverse security protocols to protect your information.

Individual companies aren’t the only ones focused on cybersecurity. The government is playing an increasing role in regulation to create specific standards of compliance. Through cybersecurity executive orders, the Biden administration aims to create more transparency and safety within the fast-paced digital world. So, while companies need to remain vigilant to protect themselves, a system to ensure compliance with federal regulations and statutes is important as well.

Andy and Ben further discuss changes in revenue cycle management and how it plays into the digital world, how healthcare providers are refocusing their projects on non-pandemic related issues, and how private equity groups are enhancing their shareholder value.

On this episode of Deal Talk with 7MA, Andy and Ben explore specific ways in which the healthcare industry is moving through digital transformation. From case studies to 7 Mile Advisors’ services, they break down the current trends and share how healthcare providers and technology service companies are coming together to develop better customer care. 

Read the Full Show Notes on our website

💡 Featured on the Episode 💡

Name: Andy Johnston  

Organization: 7 Mile Advisors 

Connect: LinkedIn

Name: Ben Garber

Organization: 7 Mile Advisors

Connect: LinkedIn

Name: Ariail Barker

Organization: 7 Mile Advisors

Connect: LinkedIn

Connect with 7 Mile Advisors

☑️ For a custom valuation assessment using 7 Mile’s five pillars of strategic value, contact Ariail Barker at [email protected].

☑️ Follow us on Twitter & LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Stitcher, TuneIn, Spotify, or Google Podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at [email protected].

Deal Talk with 7MA, a bi-weekly podcast by 7 Mile Advisors that aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.

Pablo Hernández became an entrepreneur at just 14 years old when he founded Ingenia Agency, the company he still runs today. As the oldest of seven boys, he had an early start to entrepreneurship through his father, who owned a successful chain of language schools in Mexico. Pablo would accompany his father to work over the summer months, where he first discovered the possibilities available through the internet.

"I was one of the few guys in Mexico who knew how to program websites. Anybody I would find: my dad's lawyer, my dad's architect, the school psychiatrist, the psychologist, I would say, You need to have a website," Pablo recalls. "I always had the vision of building amazing websites. I wanted to build the website for the Mexican Stock Exchange, for Coca-Cola, and Grupo Bimbo. All three happened."

Pablo shares insights into the international growth his company has experienced over the past few years, including expanding into a U.S. office based in Houston. Pablo also shares how the potentially controversial decision to pursue personal coaching over completing his MBA became a growth catalyst for his business.

On this episode of Deal Talk with 7MA, Horacio and Pablo discuss trends in digital transformation and what they're focused on to further their personal development, including developing a business mindset, pursuing continual growth both personally and at work, and embracing lifelong learning.

One way Pablo challenges himself is with triathlons. "Becoming an Ironman means that you become very disciplined in your life and very focused. You try to become the best version of yourself," he says. "You find the time to become hyper-productive … This kind of discipline gives you the ability to think more and to take perspective. I think that [training for] the Ironman and running a business is a great combination."

Listen on the Website.

💡 Featured on the Episode 💡

Name: Pablo Hernández

What he does: Pablo founded Ingenia Agency, a full-service agency for creative and technology projects including advertising, web development, and digital marketing, when he was just 14 years old. The company has now been in operation for over 26 years and serves clients such as Coca-Cola, Visa, Diageo, Grupo Bimbo, Kimberly-Clark, Mondelez International, The Mexican Stock Exchange, La Costeña, Nacional Monte de Piedad, Kuspit, and many more.

Organization: Ingenia Agency

Words of wisdom: “I am obsessed with bringing out the best version of myself.”

Connect: LinkedIn

Name: Horacio Yenaropulos

What he does: Based in Mendoza, Argentina, Horacio is a Managing Director with 7 Mile Advisors and leads the Latin America sector coverage team. He has 25 years of financial experience and previously worked with Globant’s corporate development group, where his responsibilities ranged from due diligence to SPA closing. He’s also held financial leadership positions with several key Latin American companies, including PricewaterhouseCoopers, Hidronor Chile, Viña San Pedro Wine Group, and Belatrix Software.

Organization: 7 Mile Advisors

Words of wisdom: “​​At the end, there is a reward. And the reward is how successful we are.”

Connect: LinkedIn 

🗝️ Key Points 🗝️

Top takeaways from this episode

★    Money is pouring into software development. While talent shortages are visible in many industries, the push to retain software developers is apparent. Pablo sees the money companies are putting into digital transformation and the emphasis on data, the metaverse, and cryptocurrency.

★    Don’t get stuck in the operations of your business. Pablo shares how a coaching program helped him realize he wasn’t delegating enough as an entrepreneur and the importance of focusing on where he can add the most value — vision and high-level execution.

★    Starting a business in Latin America is challenging. Business owners can have difficulty accessing capital, the capital they can access is very expensive, and the cost of dismissing poor-performing employees can be shockingly high to those used to doing business in the U.S.

★    Embrace remote work if it makes your team more productive. Pablo recognizes that COVID gave him the courage to move his company to remote work. While the team misses the interactions, they are more productive and less stressed as a remote team. It also gave him the opportunity to go to Houston and expand his business internationally.

⚡ Episode Insights ⚡

[8:18] Being a business owner is not for everyone: Pablo is a self-described growth junkie and lifelong learner. Some of his favorite programs and resources include: Tony Robbins’ Business Mastery, Ketih Cunningham’s 4-Day MBA, and Napoleon Hill’s “Grow Rich! With Peace of Mind”.

[12:06] Strive every day for balance: When he first started his business, Pablo explains that his life was completely out of balance. Over the years he has moved from working long hours, smoking, and not exercising to developing a healthy routine that is sustainable.

[16:33] Being an entrepreneur in Latin America is heroic: Pablo says that being an entrepreneur in Latin America is filled with challenges and is a very hectic experience, including having limited access to capital.

[20:08] Every place has its challenges: Pablo reflects that no matter where you decide to start your business, you’re going to face challenges. However, sometimes the bigger the risk, the bigger the reward.

[23:33] Trust is crucial in growing a business: After one failed attempt to bring his business from Mexico to the U.S., Pablo realized he needed to be the one to move to the U.S. and build the trust needed to find success in the region.

[24:14] COVID presented the opportunity to go fully remote: The pandemic gave Pablo the courage to take his company fully remote. While they had beautiful offices and people missed the interactions, his team is more productive working remotely.

[27:34] Attract amazing talent and scale: Pablo shared that the five pillars of strategic value from 7 Mile Advisors helped him create a business plan and vision that will attract the best talent from around the world.

[29:00] Digital transformation is here: Pablo discusses how to make intelligent decisions that allow companies to survive the next five years by harnessing technological advancements. He’s excited about merging the marketing side of sales with the power of technology.

Connect with 7 Mile Advisors

☑️ For a custom valuation assessment using 7 Mile’s five pillars of strategic value, contact Ariail Barker at [email protected].

☑️ Follow us on Twitter & LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Stitcher, TuneIn, Spotify, or Google Podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at [email protected].

Deal Talk with 7MA, a bi-weekly podcast by 7 Mile Advisors that aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.

Tom Delbrook grew up loading trucks at UPS. What was originally just a part-time job to get through college led him to discover deals and acquisitions.

“UPS was a great business to learn from. They're willing to constantly challenge you and give you jobs you're not prepared for to see if you can pull it off,” Tom says.

Tom recently joined the 7 Mile Advisors Atlanta team. Just as he experienced at UPS, he believes that people need to be willing to constantly try new things, look at new models, and consider new ways of doing things — it’s one of the many reasons he’s eager to support businesses in technological advancement.

On this episode of Deal Talk with 7MA, Tom discusses how digital transformation has moved forward since COVID started and the incredible technological advancements that have occurred in such a short period of time. He also touches on why private equity has been more interested in IT services lately and shares a few tips for choosing an advisor if you’re looking to sell.

“People that had five or six-year roadmaps of what they needed found they were accelerated into three or four quarters. And people realized there are resources out there that can do this work,” he says. “From a business perspective, [COVID] has changed how all businesses have to think about their operations and position themselves for the future.”

💡 Featured Guest 💡

Name: Thomas Delbrook

What he does: As a new partner with the 7 Mile Advisor team in Atlanta, Tom brings a wealth of knowledge to the table from his former role as SVP of M&A Strategy and Integration at Cognizant. Tom has explored a variety of roles but has always gravitated towards the deal side of business ever since his first role at UPS in college.

Organization: 7 Mile Advisors

Words of wisdom: “At any job I’ve ever done, I end up falling in love with deals.”

Connect: LinkedIn

🗝️ Key Points 🗝️

Top takeaways from this episode

★    Digital transformation isn’t happening. It’s here. Tom shares that he saw the need for digital transformation and mobile development long before COVID impacted the ecommerce market. When COVID forced the shut down of brick and mortars, companies were pushed to build enterprise-quality apps, causing a new wave of digital transformation.

★    Private equity has a renewed interest in IT Services. Private equity firms have seen the recurring revenue potential for IT services. It is clear that tech companies with large enterprise clients will always be in demand for more projects.

★ The demand for talent can increase costs. With a limit to the availability of technical talent, for example, full-stack developers, there is a premium that companies need to pay to access top talent in the market.

★    If you’re thinking of selling, don’t sell to the first person who shows up. Tom has some advice for owners who might be considering a sale in the next year. He recommends finding an advisor who will bring you the most logical strategic buyer and encourage you to consider all options by asking the tough questions upfront.

⚡ Episode Insights ⚡

[06:00] Mobile has been gaining momentum: Tom saw the demand for ecommerce years ago when he was working with major retailers and Amazon overtook his clients as the largest apparel retailer in the U.S.

[09:18] Ecommerce has turned ROI into a revenue game: Instead of looking for hard and fast returns on projects, the focus on ecommerce has given way to more flexibility. It’s no longer just about a fast return. If the value is there, the project’s worth taking. 

[11:00] Ecommerce is not a cost center: Tom explains that there has been a shift in how C-suite executives view development and product engineering work. As long as the project drives revenue it’s a justifiable expense.

[13:06] Sticky is good for businesses with large enterprise clients: According to Tom, having recurring revenue in the form of recurring projects with enterprise clients helps IT services firms attract interest from private equity groups.

[15:49] High demand for developers is causing a talent squeeze: Looking at large multinational organizations, there’s a challenge in getting enough developers and skilled talent to complete the available work.

[20:10] Hire an advisor with a broad perspective: Tom says if you’re looking to make a sale in the next year, be sure you bring on an advisor who thinks outside the box to bring you the best possible buyer.

Connect with 7 Mile Advisors

☑️ Follow us on Twitter & LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Stitcher, TuneIn, Spotify, or Google Podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at [email protected].

Deal Talk with 7MA, a bi-weekly podcast by 7 Mile Advisors, aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.

In this special episode, recorded during 7 Mile Advisors’ 2021’s ACCESS Conference, 7MA Managing Director Horacio Yenaropulos hosts a panel discussion on exploring international M&A trends, focused on Latin America.

Joining Horacio are experienced international investor Mario Masrieh, Principal at Trivest Partners, which recently invested in Argentinian FinTech company Veritran; and Daniel Lopatin, Co-founder and CFO of tech consultancy ArganoUV. Daniel’s company United Virtualities was acquired by Argano in February 2021, in a deal that was facilitated by 7MA.

Latin America has a need and market for new digital solutions. Mario says that this was one reason Trivest invested in Veritran. “When you look at the unbanked and underbanked populations ... there's a huge white space,” he says. “Both the governments and the private sector need to bring the populations into the financial institutions, to create more wealth for the population and to support commerce.”

The panel reviews the complexities and challenges that investors may encounter when moving into LATAM, including the diversity of the region, regulatory tax differences, and how to select strategic markets for your business goals. They also discuss best practices for working with the lawyers and accountants on your team.

Daniel believes that understanding the culture of a country or region can be the difference between the success and failure of an acquisition in LATAM. “At the end of the day, your monetary success is attached to your ability to get together with them, and work together for the foreseeable future,” he says. “You shouldn’t undermine the importance of cultural differences when you come into a deal.” 

💡 Featured Guest 💡

Name: Horacio Yenaropulos

What he does: Based in Mendoza, Argentina, Horacio is a Managing Director with 7 Mile Advisors, and leads the Latin America sector coverage team. He has 25 years of financial experience, and previously worked with Globant’s corporate development group, where his responsibilities ranged from due diligence to SPA closing. He’s also held financial leadership positions with several key Latin American companies, including PricewaterhouseCoopers, Hidronor Chile, Viña San Pedro Wine Group, and Belatrix Software.

Organization: 7 Mile Advisors

Words of wisdom: “An M&A transaction process is normally intense and time-consuming for founders and managers.”

Connect: LinkedIn

💡 Featured Guest 💡

Name: Mario Masrieh

What he does: Mario is a Principal at Trivest Partners – a leading private equity firm focused on partnering with founder and family owned businesses. He is responsible for analyzing investment opportunities, identifying strategic acquisition targets, and monitoring existing portfolio companies in the firm’s non-control investment strategy. Prior to joining Trivest, he was a private equity Vice President at Gridiron Capital, and also previously worked as an analyst at Morgan Stanley, in the global consumer and retail team.

Organization: Trivest

Words of wisdom: “We don't re-trade our deals.”

Connect: LinkedIn

💡 Featured Guest 💡

Name: Daniel Lopatin

What he does: Daniel is the co-founder and CFO of United Virtualities, now ArganoUV, a technology consultancy that merges art and software to solve digital problems for brands. United Virtualities was one of the largest e-commerce suppliers out of Latin America when it was acquired by Argano, a deal that was facilitated by 7MA.

Organization: ArganoUV

Words of wisdom: “You need to find the right partner that will work alongside you.”

Connect: LinkedIn

🗝️ Key Points 🗝️

Top takeaways from this episode

★    LATAM needs digital transformation. The reason the LATAM region is so appealing to investors right now is because there is a clear need for digital innovation, particularly in the Financial space. For example, there’s still a need for digital banking apps and web-based banking, as well as e-commerce.

★    There’s not a single “Latin America.” As Daniel points out, LATAM is not a homogenous region: It’s made up of 33 countries, each of which has many different languages. Understanding the history and culture of the place where you’re looking for investment opportunities will give you a much better chance of success.

★ Elevate your evaluation criteria. Given the regulatory challenges and the risks associated with operating across different countries, it’s wise to elevate your standard investment criteria when looking at possible M&As in LATAM, including around customer concentrations, growth rates, and margins.

★    Overcoming talent challenges. Before evaluating your talent, decide where your focus is going to be. Does the company have customers in the U.S.? Or is it targeting other countries within LATAM? This will affect your talent strategy, including when it comes to assessing key skills such as English proficiency.

⚡ Episode Insights ⚡

[6:30] Don’t over complicate your deals: With 33 different regulatory and tax structures in LATAM, it’s easy to create complex deals if you’re not focused on specific countries or regions.

[17:47] Language is important, but not a deal-killer: Daniel explains that while language barriers can be a challenge, they are not an insurmountable problem.

[19:08] Argentina has an undeniable talent pool: Mario notes that despite reservations from investors, Argentina has an impressive and relatively untapped talent pool that foreign businesses are only just starting to recognize.

[24:03] Don’t be swayed by the highest offer: Daniel says that although high offers might seem like the best bet, you need to stay focused and pick the offer that is right for you. That’s what he did, and it worked for him.

[26:12] Exit strategies focus on IPOs: Mario says that in LATAM, the most common strategies are VC investment followed by a strategic exit or an IPO. Unlike in the U.S., he doesn’t see many deals focused on standard private equity.

[32:57] The LATAM digital industry is growing: Daniel sees growth across the digital industry in LATAM, including in e-commerce but also other segments.

Connect with 7 Mile Advisors

☑️ Follow us on Twitter & LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Stitcher, TuneIn, Spotify, or Google Podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at [email protected].

Deal Talk with 7MA, a bi-weekly podcast by 7 Mile Advisors that aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.

In this special episode of Deal Talk with 7MA, Partner Tripp Davis leads a discussion on navigating M&A as a business owner or operator.

For the panel discussion, which was part of 7MA’s ACCESS Conference 2021, Tripp is joined by David Lewis, Founder and CEO of DemandGen (acquired by BDO) and Partner at BDO Digital; Andy Fay, Chief Revenue Officer of Innovasource (acquired by Energizer); and George Young, Founder, CEO, and now Managing Director of Kalypso (acquired by Rockwell Automation).

This panel of sellers have all navigated successful exits — some in the midst of the COVID-19 pandemic. In this episode they’re sharing first-hand lessons from their own experience in M&A and first-hand insights from the process.

The panel touches on all aspects of the M&A deal process — finding the right partners, working with a trusted advisor, navigating the emotions, and preparing your team once an acquisition goes through.

“I didn't go into the process expecting whether we would go down the private equity route or the strategic route. I really was open to both,” David says of getting acquired. “At least I thought I was; you really do some soul searching when you have people at the table.”

He continues: “When we had 22 offers, the majority of them were private equity, and there were about five strategic offers. And what made sense was it was very clear that I wanted a platform for the business that would catapult our growth.”

When discussing the sale of his consulting firm to Rockwell Automation, George admits being a little “naive” and “narrowly focused” early in the process. He shares how working with 7MA paved the way for a different kind of exit: “I think one of the things that you (7MA) helped us do was not go exclusive. Let's keep this thing open. Let's create the market.”

Tune in to the episode to learn more about the acquisition process directly from business owners.

💡 Featured Guest 💡

Name: Tripp Davis

What he does: Tripp is a Partner with over 20 years of investment banking and advisory experience. He joined 7 Mile Advisors from Hyde Park Capital Partners, where he served as head of the Business Services, Technology, and Communications group while advising companies in a variety of industries on M&A and capital raising assignments. Previously, Tripp served as Vice President at DecisionPoint International and began his career with Livingston & Associates.

Organization: 7 Mile Advisors

Words of wisdom: “Strategic points, operational points, transactional points and emotional ones are all part of the transaction cycle.”

Connect: LinkedIn

💡 Featured Guest 💡

Name: David Lewis

What he does: For more than 20 years, David has been a pioneering innovator in digital marketing, and has overseen marketing for some of Silicon Valley’s leading technology firms. David and his team at DemandGen have been at the forefront of digital transformation. The company was acquired by BDO, one of the nation’s leading accounting and advisory firms.

Organization: DemandGen

Words of wisdom: “It has got to be all about your employees.”

Connect: LinkedIn

💡 Featured Guest 💡

Name: Andrew Fay

What he does: Andrew is the VP of Business Development at household and industrial cleaning products company Innovasource, which was acquired by Energizer. He is a dynamic, innovative, entrepreneurial strategist with a 22-year record of achievement and demonstrated success driving multimillion-dollar sales growth.

Organization: Innovasource

Words of wisdom: “One of the big things we really wanted to do was have a strategic partner.”

Connect: LinkedIn

💡 Featured Guest 💡

Name: George Young

What he does: George is the Global Managing Director at Kalypso. He has over 30 years of experience in business management and consulting, serving Fortune 500 brands across industries. Kalypso, founded in 2004, is a professional services firm that helps its clients discover, create, make, and sell new products digitally. Kalypso was acquired by Rockwell Automation in February 2020.

Organization: Kalypso

Words of wisdom: “There was no option other than to be successful. You couldn't fail twice.”

Connect: LinkedIn

🗝️ Key Points 🗝️

Top takeaways from this episode

★    Strategic buyers vs. private equity. Andy was careful to ensure a strategic buyer wouldn’t have a negative impact on his existing customer base when he was weighing his options between the two.

★ Take care of your employees. David kept his team top of mind while working on his deal, and once he was confident in the agreement he began to bring people into the fold.

★    Keep your options open. George recognizes that during the first deal attempt his team was too narrowly focused, which limited their options and got him to commit to a partner too early in the process. He recommends considering all the possibilities, even things that might seem a bit silly at first glance.

⚡ Episode Insights ⚡

[0:56] Navigating M&A: 7MA’s Tripp Davis introduced the discussion and the panelists.

[11:40] Selling a company is like getting ready to sell your house: Andy compares preparing for a deal to how you would get ready to sell your house. He advises, “Make sure that when potential buyers come in to look and open up the books, that everything makes sense and everything is in its right place, so that the transaction can happen without an 11th hour Hey, what is this?”

[14:09] A huge change for employees: Take a brief moment to celebrate, but after that point David recommends focusing on your employees and how this change is impacting them. People react to changes differently and you need to be prepared to generate excitement throughout the organization.

[20:03] Radical transparency: George says, “The second time we went to market, we adopted a policy with our people of being radically transparent. They knew about as much as me... Everybody knew what was happening. And so when it (the deal) got pushed, I told people. And there were a lot of people who thought it's not gonna happen.”

[22:23] The value of a coach: A coach can help answer questions along the way, including questions about expectation setting for you and your team.

[25:15] Building value in your firm: When looking to build value in his firm Andy explains that he did a number of things: “We did a lot of work to protect our technology, and to build intellectual property, so it was protected that way. We did a lot of work with licensing and exclusivity with certain brands, or retailers, and certain channels of trade, to really have some guaranteed growth.”

[35:15] When in doubt: Andy says if you end up in the situation where you have multiple offers to trust your gut. You need to think about what it means for you personally, for your executive team, for your company, your employees, and your clients at the end of the process.

[35:59] Change is inevitable: People adjust to change in different ways, and often it’s easier to start with small changes to ease your team into the transition. Begin with little operational adjustments like the phone system or data backup, then make bigger changes as time goes on. Another tip would be to start with positive changes, like introducing an improved 401k offering.

Connect with 7 Mile Advisors

☑️ Follow us on Twitter & LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Stitcher, TuneIn, Spotify, or Google Podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at [email protected].

Deal Talk with 7MA, a bi-weekly podcast by 7 Mile Advisors that aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.

Join 7MA Partner Leroy Davis as he sits down for a fireside chat with the Assistant Director for Science and Exploration Science Directorate at NASA Headquarters, Richard (Rick) Davis. On this special episode of Deal Talk, as part of the 2021 ACCESS Conference, they discuss Richard’s background and the fascinating work his team is doing on the Mission to Mars program.

Leroy takes the opportunity to ask Rick how he first became interested in space, his involvement in the Mars Mission, and the technology behind the project. Private equity investors will be interested to hear Rick’s take on private equity, commercial involvement in space exploration, and how NASA and the government partner with private entities to advance space travel.

Rick grew up on a farm outside of Charlottesville, Virginia, in a rural town called Happy Creek. There, the lack of light pollution means “the night skies are dark as anything and you could just see star fields like you wouldn't believe," he explains. "I remember walking outside and seeing them and I was just totally drawn to that.”

Leroy and Rick discuss William Shatner's recent space flight on Jeff Bezos' Blue Origin, as well as commercial developments in space travel. As a child, Rick was an obsessive Star Trek fan, which further inspired his future in space exploration. 

“As we look at going to Mars, there's actually two parts of the equation," he says. "Because when you see the Blue Origin … and the SpaceX launches, the cost of getting to space is dropping dramatically. So that increases our ability to push stuff up and to make these missions more affordable.”

💡 Featured Guest 💡

Name: Richard (Rick) Davis 

What he does: As the Assistant Director for Science and Exploration, Science Directorate at NASA Headquarters, Richard Davis is an accomplished aerospace engineer with extensive experience working in space exploration. His current role entails significant integration across all mission directorates and offices involved in Mars exploration. He is fluent in three languages, including English, Spanish, and Russian, and has earned numerous accomplishments and awards. Richard is also an instrument-rated pilot with 600 hours plus of flight experience. 

Organization: NASA 

Words of wisdom: “I think that if we do it right, you use the federal government to allow the private sector to establish a toehold and to get the sea legs — or space legs, if you will — to actually get up there. And then they will just go a lot further than any of us would imagine.”

Connect: Twitter

🗝️ Key Points 🗝️

Top takeaways from this episode 

★    The cost of getting to space is dropping dramatically. The Blue Origin and SpaceX launches are examples of what is possible when space travel becomes less expensive. It increases our ability to expedite plans for other missions and make future missions more affordable.

★    Let’s learn from Lewis and Clark. Rick believes we can learn from the Lewis and Clark expeditions. The explorers set out with a limited supply of materials and lived off them to extend their journey. This is what astronauts must do to make a Mars mission successful.

★    Space assembly is the new frontier. The International Space Station has provided the ability for humans to become skilled at assembling equipment and materials in space. Rick thinks it might be the next frontier of space exploration: businesses or international entities could launch materials from Earth and assemble or aggregate them in orbit.

★    Commercial players are driving costs down. Rick believes that the United States is a leading example of the opportunity that arises when commercial players bid on space projects and help drive costs down. While NASA was originally criticized for doing this, allowing commercial interests to get involved has already paid dividends.

⚡ Episode Insights ⚡

[10:48] Challenges of getting to Mars: SpaceX and Blue Origin are driving down the cost of getting to space, but we still need to figure out how to live off resources we can find up there for longer missions — starting with finding a way to create propellant for a return trip back to Earth.

[13:02] Finding water on Mars: About 14 years ago ice sheets were discovered on Mars. Today, the goal is to send a new radar to Mars to gather more precise data on their location and learn more about the opportunities they might present.

[16:45] Preparing for a three-year mission: Rick says a mission to Mars is about three years. Astronauts spend six to eight months traveling. Then they'll live in the Martian system for roughly 500 days. Time in space can either be in orbit, on the surface, or some combination of both. The return trip is also six to eight months. A key component of these missions will be having a comfortable and well-prepared mothership to live on.

[26:59] Private space travel is coming: Rick predicts that as private space exploration companies continue to grow, we'll see the launch of hotels and support staff in space. Personnel might stay for long periods of time, run experiments, and/or a wide range of activities we can't even imagine today.

[29:05] Nuclear propulsion will be used in space: Using nuclear propulsion technology in space has two main benefits – avoiding the inherent dangers present on Earth and reducing the travel time to Mars by up to a year.

[36:42] Is there other life out there?: On the topic of aliens, Rick says, “I've never seen any evidence there's intelligent life out there or visiting this planet. But anyone who's been thinking about space, and they look at this cosmos, realizes there is essentially almost an infinite number of stars. And we can actually see planets around these stars.” He thinks the probability of intelligent life is high.

Connect with 7 Mile Advisors

☑️ Follow us on Twitter & LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Stitcher, TuneIn, Spotify, or Google Podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at [email protected].

Deal Talk with 7MA, a bi-weekly podcast by 7 Mile Advisors, aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based in Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.

How has the IT Services sector fared in M&A activity over the last 18 months?

On this episode of Deal Talk with 7MA — part of a series recorded during the ACCESS 2021 Conference Hosted by 7 Mile Advisors — Partner John Cooper provides an update on the M&A landscape. He walks us through how 7MA sees the M&A landscape including general market trends, commentary from the firm, target markets, and Q&A from the audience. View the accompanying presentation here.

7MA has closed 29 deals since October of 2020 with another 10 deals under LOI. Alongside positive deal stats, they are also hiring aggressively in response to the strong market. 

Over the last number of years, key international players have made aggressive M&A moves around the Technology sector. Those in the private equity market are also looking to make strategic moves to deploy capital in the Tech sector, as it's viewed as an attractive and growing space.

In regards to market trends, the IT sector (including software, digital technology, global SI’s, management consultancies, and digital marketing) has been trading at all-time highs.

Enterprise software is reporting double-digit revenue multiples and digital technology companies are trading at multiple historically found by software companies. These technology gains have since cooled off a bit as people’s perspectives have changed causing a bit of back and forth volatility, but overall strong gains for the sector as a whole.

While private equity investors may approach deals with more caution and heightened standards, they’re not avoiding IT. We’re seeing some companies in the Enterprise Software and Digital Tech Services categories trading at all-time highs. Deal activity with IT companies have accelerated — comprising 22% of all deals done in 2021.

The support and interest in the IT sector reflect the role tech is playing in the workplace including businesses trying to be more creative in terms of remote employees, a push to stay connected with the brand’s consumer journey, optimizing marketing channels, and the need to utilize CRM data to remain competitive in the marketplace.

North America as a whole has seen strong M&A activity. The expectation is that we will see a very strong Q4 to close out a strong year of M&A activity in terms of deal count and deal value. Deal values have been on a downward trend since 2018, this trend was reflected in 2019 and 2020, however, 2021 shows a strong rebound. Megadeals and SPAC activity have helped drive the 2021 rebound by driving additional M&A funding through these channels.

As we close out 2021, John explains that he doesn’t predict an immediate slowdown in the market. There is a continued need for data, IT, SaaS, and technology services that will continue to power M&A. There is already some pent-up demand that will carry into 2022 from deals that are ready to go to market and he predicts that the current momentum will continue.

John also responded to questions from attendees, including:

• How do you think about the impact of sustained inflation on margin pricing? (28:44)
• Are we, or why are we seeing a significant increase in employee wages? (31:23)
• How do you calculate time horizons to evaluations received? (32:17
• What are your top three criteria for investing in LATAM (Latin America) (34:56)

💡 Featured Guest 💡

Name: John Cooper

What he does: John is a Partner at 7 Mile Advisors with more than 15 years of financial experience. He joined the firm from NewMarket Corporation where he worked in the corporate finance team and BB&T Capital Markets as an equity research analyst.

Organization: 7 Mile Advisors

Words of wisdom:  “We're expecting a really strong Q4 to round out what will be a very strong year of M&A activity both from a deal count perspective, as well as a deal value [perspective].”

Connect: LinkedIn

🗝️ Key Points 🗝️

Top takeaways from this episode

★    2021 has been a busy year for M&A. 2021 is ending on a strong note for M&A after limited deal activity over the last three years. Investors and private equity groups have been eager to spend after a hesitant 2020. IT has comprised 22% of all deals so far this year — a rise from an average of about 16% in previous years.

★    Revenue multiples for IT services have increased. Buzzwords like “digital transformation” started picking up around 2015, which has pushed M&A activity in the IT Services sector on an upward trajectory. IT services firms have also diversified revenue streams and focused more on recurring revenue, which has driven up the value.

★ Driving up valuation in a crowded market. For sellers looking to take advantage of the active M&A climate, positioning a business as one that can drive assets at scale is something that will appeal to buyers along with strong revenue growth.

⚡ Episode Insights ⚡

[4:28] Recent deal environment: 7MA has closed 29 deals since October 2020 and has another 10 under LOI. “We've been hiring aggressively too [and] it's been a great market,” John says of the current deal climate.

[5:02] Acquisition activity: John notes some recent acquisitions like digital engineering company Real Sourcing’s acquisition of Centare, a digital business and technology consultancy.

[8:32] A bumper year: 2021 is ending on a strong note for M&A after limited deal activity over the last three years. Investors and private equity groups have been eager to spend after a hesitant 2020. IT has comprised 22% of all deals so far this year — a rise from around 16%, John notes.

[11:31] Revenue multiples: While EBITDA can fluctuate depending on the data publicly available, multiples offer a more consistent metric. The data show revenue multiples are up and it’s driven by creative revenue streams, including recurring revenue.

[14:54] SaaS limitations: SaaS deals are still getting done, but companies often require custom developed solutions to sustainably solve business problems.

[17:36] Target markets and multiples: John highlights historical trends with gross margins, noting that pure service companies are typically around 35% from a gross margin perspective.

[20:32] What to shop for: John discusses why growth is so attractive in M&A. “That is gold star number one, like what to shop for — we want revenue growth,” he says.

[23:28] Outlook for the next 12 months: M&A activity will continue at an accelerated pace and John expects a lot of deals to be announced between Thanksgiving and the beginning of 2022.

[24:58] Thinking about valuation: John outlines how potential sellers can think about positioning their company for acquisition in a competitive market.

Connect with 7 Mile Advisors

☑️ Follow us on Twitter & LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Stitcher, TuneIn, Spotify, or Google Podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at [email protected].

Deal Talk with 7MA, a bi-weekly podcast by 7 Mile Advisors that aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.