Victor Basta has been described as ‘a maestro of M&A’. The former MD of investment bank DAI Magister has certainly been at the heart of a huge number of significant deals. A notable deal early in his career, for example was selling LoveFilm to Amazon.
In all, he has advised on over 130 transactions in a 30-year career.
And now Basta is launching a new investment bank, together with Steve Bachmann and Dorian Maillard. Basta will operate as a Managing Partner of Artis Partners. Bachmann is a former senior banker at Atlas Technology Partners and Broadview as well as previously a tech CEO himself. Meantime, Maillard, has over 12 years’ experience advising and investing in technology-driven companies.
The aim is easy to summarise, harder to execute. Artis Partners will prioritise key tech sectors including AI, helping organisations at the cutting edge of this burgeoning industry scale at speed and maximise valuations. Basta predicts the sector will continue to soar in value due to the revolutionary potential of AI magnifying the value of existing investments in software and digital business models.
Basta tells RBI: “I’ve been involved almost 30 years in working with technology companies. The kinds of companies we work with always have international interest, an international dimension, and we only work on the sell side.”
Another career hit for Basta was founding Arma Partners, which he led for six years. Starting with four employees in London focused on software M&A, the firm rapidly evolved its corporate finance advisory practice across the communications, media and technology sector with a transatlantic team. It however acts on either the sell-side or the buy-side, advising on majority buyouts, minority recapitalisation transactions and has specialised in doing private equity deals.
“If we’re working for boards, investors and founders of growth companies looking at exits, then what they do and don’t do in the year or two before they exit, matters enormously. It’s the sports analogy. If you show up to the Olympic starting line having done the training right, you are in great position. If you’ve under trained, good luck. So, it’s the training before the race effectively, and that is exceptionally important when you are doing strategic deals.
“Large buyers, wherever they may be, have got lots of options to do acquisitions in a particular space. They might have four or five options. They need to be guided towards a particular target and appreciate that target when it’s a growth stage company. And this is fundamentally different from doing private equity deals. We’re selling opportunity rather than an asset, and that’s really where the difference.
An obvious competitor boutique firm will be FT Partners. Basta says that he has competed with them in the past and will do so again. Fintech firms currently make up around 40% to 50% of the work Artis Partners is working on. As for the obvious question, why hire Artis? Basta says that it is always relationships and quality of execution.
“The key USP is this point about exit preparation. Almost everything we do we will begin working with a company a year or two ahead of time. We help them prepare for potential exit, help them navigate towards potential buyers, cultivate buyer interests, broadcast their story, all of that over a period of time, which you can never do in a sale process. We have not found another investment bank that does this. I used to teach this for six years at INSEAD, so we have the whole framework, the playbook. Without the playbook, it would be incredibly inefficient to be able to do that. If you are working with a company for 12 or 18 months, you need a coaching mindset, a consultative mindset, even though we’re not consultants. And then you need to be able to shift on a dime and run a deal at high speed. So having both of those mindsets is something that’s very difficult to find in the M&A banking business.
“You also need senior people who really are minded to do that work, and all of the senior people at the firm, that’s how they think. You can’t do exit prep in the way we do it within a large bank. The reason is because, you know, a large bank needs to charge a certain amount for a certain speed and get a deal done. So, you know, patience over a year or two cultivating interest – a large bank can’t afford to do it. Weirdly, their cost space is too high. You can only do it in a boutique investment bank.”
Basta says that fundraising, large funding round of €50m-€100m plus, remains fairly subdued. The only place where there’s that kind of activity, really is native AI companies.
“But for the vast majority of technology companies, financing is very subdued. Also, you’ve had a number of funds invested in these businesses for four, five, six or seven years. And so, there’s a natural maturity of those assets when M and A becomes topical, timely and makes sense. And then you have a whole raft of buyers looking to do deals. So, I would be very surprised if we didn’t see a 20%, 30% increase in M and A activity this year for all those reasons, very surprised.
“Interview: Artis Partners co-founder, Victor Basta” was originally created and published by Retail Banker International, a GlobalData owned brand.
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